Shutdown of Minnesota's Government Shows Just How Enormous is Its Power and How Dependent We Are on It: It Regulates and Rules Over Many Aspects of Life, Especially Government at the Federal Level

Minn. Governor Signs Budget, Ends State Shutdown

July 20, 2011

AP - Minnesota Gov. Mark Dayton signed a new budget Wednesday, ending the nation's longest state government shutdown in the past decade.

Dayton's signature came just hours after lawmakers gave their own approval to the deal after meeting in special session that started Tuesday afternoon and lasted until early Wednesday morning. All sides formalized an agreement that Dayton struck with leading Republicans late last week.

The two sides argued bitterly over taxes and spending for months. When government shut down July 1, it closed state parks and rest stops, laid off 22,000 state employees, stopped road projects and much more.

The end to the shutdown began when Dayton moved last week to accept a borrowing plan offered by the GOP shortly before the stoppage began.

After signing the budget, Dayton said he was "not entirely happy" with it.

"It's not what I wanted, but it's the best option that was available and would be for any time," he said. Dayton said the budget "gets Minnesota back to work."

Details were still emerging Wednesday about how quickly state operations would restart. Dayton said he expected most state employees to be back on the job Thursday.

Jim Schowalter, the state's budget commissioner, said it will take longer to restart some state agencies than others since some have continued partial operations during the shutdown. He predicted it would take weeks for agencies to work through paperwork backlogs, clean up parks and other sites and return to normal operations.

The state lost millions of dollars in the shutdown, including lost revenue from lottery sales, tax audits and state park fees, money spent preparing to shut down and the cost of unemployment and health benefits for laid-off workers. The full cost wasn't expected to be known for some time because the workers who could calculate it weren't on the job.

The budget was widely panned for setting up a new problem down the road. It borrows money from schools and from future payments on a legal settlement with tobacco companies to erase a $5 billion deficit through mid-2013. Republicans and Democrats have been at odds for years over how to address persistent deficits, with GOP leaders pushing for deeper spending cuts and Democrats arguing for new taxes.

Minnesota became a national example of political dysfunction, mirroring in miniature the partisan standoff in Washington over raising the debt ceiling. State leaders are more accustomed to being recognized for efficiency and innovation.

The end of the shutdown was a relief to Kim Leonhardt, owner of High Banks Resort on Lake Winnibigoshish in northern Minnesota. When the state stopped issuing fishing licenses during the shutdown, she had to talk at least a dozen parties out of canceling. The resort wound up promising guests it would cover the costs of any tickets for fishing without a license.

Then Leonhardt found that the state-issued card that allows the resort to buy beer and liquor was about to expire, sending her into a panic and scrambling to stock up for a marathon shutdown. Despite all that, Leonardt said she didn't blame one side more than the other.

"I guess I'm staying neutral on that. I'm glad to see that things are coming back on track," she said.

Minnesota Shutdown Longest in Recent History, No New Talks

July 12, 2011

Reuters - The Minnesota state government shutdown, now the longest in recent memory in the United States, reached its eleventh day on Monday with no new talks planned between the political leaders.

The state's new fiscal year began on July 1 without a budget in place to close a projected $5 billion two-year deficit or a temporary spending plan, leading to the second Minnesota state government shutdown in six years.

The issues driving the impasse in Minnesota are similar to differences raised in Washington during negotiations over the debt ceiling and over budgets in other states. Still, Minnesota is the only state where the government has shut down.

Minnesota's Democratic Governor Mark Dayton, Republican House Speaker Kurt Zellers and Senate Majority Leader Amy Koch have not met face-to-face since Thursday. There was little change in their respective positions on Monday.

On Monday, Dayton said he would tour the state to meet with residents about the impasse and again offered to meet with Republican leaders over his proposals to eliminate a $1.4 billion gap between his budget proposals and theirs.

"I am willing to compromise," Dayton told reporters. "I am willing to consider other possibilities. I am willing to consider any reasonable proposal that would get this matter resolved as quickly as possible."

Koch said Dayton's offers, included in a letter offering to meet Republican leaders, were disappointing.

"The governor continues to believe that the discussion needs to be about where the revenue comes from and how much," Koch told reporters. "There is no compromise in the area that we are concerned about, and that's about reining in spending and reforming the way we are spending."

The toll on Minnesota's economy was unclear, but economists expect it the economic drag to increase as the shutdown goes along, starting with reduced spending by more than 22,000 furloughed state workers.

Thousands of other workers have lost business after 100 state funded construction projects were suspended and state workers overseeing gaming were laid off, forcing cancellation of racing at two horse tracks.

Sujit CanagaRetna, senior fiscal analyst for the nonpartisan Council of State Governments, said on Monday that the political impasse eventually would have an impact on the state's economy at a time when the recovery remains fragile.

"The fact that it has gone on for so long and that state government is paralyzed means that this recovery that is so essential is going to be stalled," he said.

Todd Haggerty, a fiscal affairs analyst for the bipartisan National Conference of State Legislatures, said the shutdown already is the longest since the group began to gather such data in 2002, but is also the longest in at least two decades.

Many states have gone months into the next fiscal year without budgets before, Haggerty said. New York and California last year took about four extra months to complete budgets.

A state court judge has ordered Minnesota to maintain only critical core state government functions during the shutdown, including state police patrols and staffing of prisons and nursing and veterans homes.

Other functions have been scaled back with many departments that issue permits or oversee programs cut to bare bones, leaving a steady stream of groups and companies heading to court for relief from the shutdown.