22,000 State Workers Laid Off in Minnesota After State Government Shuts Down
Minnesota Government Shutdown Reflects Widespread Budget Paralysis
July 1, 2011Washington Post - There is a giant gap between what many of the world’s governments have promised and what they can afford. Now, the headlines from the across the United States and overseas show what happens when the clunky machinery of democracy goes about trying to close that gap.
The latest: The Minnesota government shut down Friday, locking families out of state parks on a normally busy holiday weekend after the Democratic governor and Republican-controlled legislature failed to reach agreement on whether to close a projected $5 billion budget deficit in part with tax increases.
It is just one skirmish in the great reckoning of our age. The United States can maintain the retiree health benefits, costly wars, public pensions and social welfare programs promised to a generation of citizens. Or it can maintain the low taxes to which Americans have become accustomed. But it will be nearly impossible to maintain both.
Something has to give, and figuring out what that something is will be the crux of many of the great political battles happening around the world.
This week, thousands took to the streets in Greece to protest a plan to slash government services and public pensions and to raise taxes. The plan was passed by Parliament as a condition for the latest round of bailout funds. The riots that followed sent dozens to hospitals as a fog of tear gas hung over parts of Athens.
In Britain, 75,000 teachers and civil servants went on strike last week, protesting changes that could require them to contribute more to their pensions.
And in Washington, the Treasury Department confirmed Friday that the United States will hit its legal debt limit. The Obama administration and congressional Republicans remain engaged in a high-stakes standoff over what conditions will be attached to raising it. If they fail to reach agreement, the nation could default on its debt.
In the best of times, lawmaking can be as ugly as sausagemaking, according to the cliche. It is, therefore, unsurprising that reaching a new agreement on how to revise the social contract would require all the theatrics, street protests and brinksmanship evident in capitals around the world.
The challenge for policymakers against that backdrop is to reach agreement on that core question of how taxes and spending will be changed without causing too much collateral damage in the process.
In the standoff over raising the U.S. debt ceiling, the risk is that delays could cause global investors to lose faith in the government’s ability to honor its debts, potentially causing interest rates to spike and sparking a new financial crisis.
The details of the Minnesota government’s shutdown show what can go wrong when no agreement can be reached. Last week, a judge ruled that only core government functions — public safety, welfare programs, care for residents in state facilities such as prisons, preservation of the government financial system and necessary administration functions — would continue if the government were shuttered.
When lawmakers failed to fend off the shutdown, about 20,000 state workers were officially laid off...
Minnesotans Starting to Feel Impact of State Shutdown
July 6, 2011St. Cloud (Minn.) Times - Bob Pogatchnik has spent 25 years in the workforce. Now, Minnesota's state government shutdown has put him in an unfamiliar place: the unemployment line. Pogatchnik, 45, of Albany, is a Minnesota Department of Transportation (MnDOT) mechanic. He applied for unemployment insurance Tuesday after he was laid off because of the shutdown.
The reality of the shutdown, which began Friday, started to set in this week for Pogatchnik and about 22,000 other state workers who have been laid off.
Democratic Gov. Mark Dayton and Republican legislative leaders met for a second day Wednesday to try to settle the dispute over taxes and spending that led to the shutdown. No progress was reported.
The shutdown resulted from an impasse over how to erase a $5 billion budget deficit. Dayton wants to raise income taxes on the state's wealthiest residents to provide more money for social services and public education. Republican lawmakers oppose any tax increase.
State officials say they won't be able to calculate the shutdown's full cost until it's over, but they have quantified some of the notable losses: $1.25 million a day on the lottery, $1 million a week on state parks, $52 million a month in uncollected tax revenue that idled state auditors would have brought in. The cost of other shutdown casualties — including 100 road construction projects — has yet to be calculated.
"Nobody believes the state is saving money," said John Pollard, spokesman for Minnesota Management and Budget, the state's finance agency.
State parks are losing $1 million a week in camping fees, park passes, concessions and gift shop sales, according to the Minnesota Department of Natural Resources.
Pogatchnik said he has had to take a hard look at his personal finances. He'll prioritize his house payments above all else, and put other spending on the back burner during the shutdown.
"I'll just have to cut back my spending at local establishments," he said. "I won't be going out to dinner. We'll probably cut out our shopping."
His personal finances aside, Pogatchnik said Minnesotans should worry about what's not getting done when he and his MnDOT colleagues are off the job. Road debris might not be removed. Potholes won't be filled, and guardrails might not be fixed, he said. .
"It's unfortunate that we're held as political pawns," Pogatchnik said, "in a battle that doesn't have to exist."
The shutdown also has closed state parks and highway rest areas during the busy tourism season and shuttered workforce centers that assist the unemployed in finding jobs.
In addition to state workers, some private-sector and non-profit employees also are out of work because of the shutdown. That includes businesses with state contracts and non-profits that rely on state funds.
Among those affected is state Rep. Larry Hosch of St. Joseph, who was laid off from a Central Minnesota non-profit that serves people with disabilities.
"It's personal, the shutdown," said Hosch, of the Democratic-Farm-Labor Party. "I definitely am seeing the effects of it, it seems, from every corner of my life."
Minnesota Government Goes into Shutdown in Partisan Dispute Over How to Fix $5 Billion Deficit
July 1, 2011
Associated Press — Minnesota state government has shut down for the second time in six years after political leaders couldn’t agree on how to solve a $5 billion budget deficit.
Talks between Democratic Gov. Mark Dayton and top Republicans fell apart well before a midnight deadline. Dayton demanded tax increases on top earners, but the GOP refused.
The effects of the shutdown were being felt even before the final failure, as the state padlocked parks and rest areas. The full impact will hit Friday, with thousands of state employees laid off and a wide array of services suspended.
Critical functions like state troopers, prison guards, the courts and disaster responses will continue.
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