UPDATED 10:50 a.m.
EDT U.S. District Court Judge Steven Rhodes said Gov.
Mark Dayton can block the diversion of Medicaid money in a plan approved by Dayton’s administration to save $1 billion a year.
Dayton, a Republican, has said he is open to compromise and is open for bipartisan agreement.
The governor has argued that the plan is necessary to prevent an economic downturn.
But Rhodes said he cannot force Dayton to cut funding for the program, which is used to cover low-income people in rural areas.
The ruling comes as Dayton tries to avert a potential budget collapse.
Dayton said the plan will save $800 million over 10 years.
It would divert $200 million in Medicaid money from state agencies to pay for the new state system.
He said the state could save up to $2 billion a month by paying for the costs of the new system.
Dayton’s office said the governor will have the opportunity to present the plan to the legislature next week.
In its brief, the state argued that eliminating the diversion would create an artificial and unsustainable budget deficit, and that Dayton has a responsibility to make cuts that balance the budget.
The court’s decision is pending.
A federal court ruled last year that Dayton had the authority to stop the diversion.
The state appealed, and the appeals court said it did not.
The Dayton administration argued that Dayton can stop the plan by using a legislative budget veto power, which would not apply to the diversion proposal.
The U. S. Supreme Court last month declined to review that ruling.
The case is A&C Inc v.
It’s also being closely watched because the federal government has ordered the state to cut spending.
A&s;C is an Ohio-based company that provides online shopping, home insurance, and health-care services to low-wage workers.