He used the provision -- known as "unallotment" -- to trim spending in key state programs in 2010, including one that provided healthcare to working-class and impoverished adults.
Pawlenty speaks with pride of his unilateral actions -- but they were criticized as an overreach even by the chief justice of the Minnesota Supreme Court, a Pawlenty appointee, who wrote the majority opinion ruling them illegal.
Minnesota continues to rank well above average in many indices of public welfare and economic performance. But other data show the state has lost its economic edge relative to other states.
"The last nine years reversed a roughly 40-year trend of Minnesota getting better and better," said Louis Johnston, an economist at the College of St. Benedict and St. John's University in Minnesota who is working on a book about the evolution of Minnesota's economy since 1850. He found a continuous economic expansion for Minnesota relative to other states until the year after Pawlenty was elected. "Starting in 2003, the rest of the country grows faster than Minnesota," he said.
Arthur J. Rolnick, a former senior vice president for the Minneapolis Federal Reserve Bank and now a senior fellow at the University of Minnesota, applauded the former governor's effort to trim the size of government but criticized "his failure to invest in human capital" -- education, early childhood development and job training -- which he credits for Minnesota's economic growth in the past.
"We got sidetracked in a number of ways," he said. "It's a disturbing sign from an economic and moral point of view."
Pawlenty energetically disputed such criticism, saying the remarks sprang from the entrenched political culture in his home state. He kicked back at those who called for a return to the time in the 1970s when the state's educational investment and economic performance were referred to as the "Minnesota miracle."
"People say, 'We need to get back to those days.' No we don't!" Pawlenty said, his voice rising.
"... I say no, we are not going back. We can't go back there. It's what got us in trouble."