It looks like the Commissioner and Governor did exactly what they were supposed to do in the event of a budget overage.
But that is not what happened here.
On the other hand (as happened here), if the budget shortfall occurs prior to the setting of the budget, is known to everyone involved, and the legislature passes a budget which is signed into law, the governor cannot then immediately turn around and declare insufficient funds and trigger the allotment. If he believed there was not enough funds prior to signing the budget, he needs to use his veto power (which Pawlenty did for some of the requested programs the DFL wanted funded). This is exactly what happened here.
If this is somehow constitutional, then a governor could do this any year. Obviously, this cannot be allowed, unless we want to do away with the legislative process.
Happy New Year!