Experts: shutdown could last weeks

Gov. Dayton and state legislators returned to negotiations Tuesday.
Speaker of the Minnesota House of Representatives, Kurt Zellers speaks to members of the press Thursday at the Capitol.
By
July 06, 2011

Days after plunging into the largest government shutdown in state history, DFL Gov. Mark Dayton and the Legislature’s Republican leaders returned to the negotiating table Tuesday afternoon, but showed no signs that an agreement to end the shutdown was near.

Local political experts say they expect the shutdown to last anywhere from a couple of weeks to more than a month.

Despite more than a week of budget negotiations behind closed doors and signs of progress as late as Thursday afternoon, both sides were unable to finalize a spending agreement before the deadline.

Larry Jacobs, a professor at the Humphrey School of Public Affairs, said if the two parties can’t reach a budget agreement within the week, the shutdown may stretch into August or further.

Passing the shutdown deadline may take some heat off the legislators — to the detriment of negotiations, said David Schultz, a professor of public policy at Hamline University.

“A lot of the fear is gone now that we’re actually in the shutdown,” he said. “[The shutdown] doesn’t, in and of itself, provide the political incentive to reach agreement.”

Schultz said he doesn’t see the two parties reaching an agreement any time soon, and guessed the shutdown will last at least a couple of weeks.

While politicians won’t immediately feel the pressure to reach an agreement and end the shutdown, Jacobs said, its economic impact will eventually create voter “outrage” and spur a deal. He estimated the shutdown will cost the state $20 million each week — excluding lost revenue from services like state parks that have been shuttered.

In the state’s last partial government shutdown in 2005, former Gov. Tim Pawlenty and the Legislature reached an agreement in eight days.

Budget talks break down

“This is a night of deep sorrow for me,” Dayton said Thursday around 10 p.m. at a press conference to announce that talks had broken down. “I don’t want to see this shutdown occur.”

During and after the governor’s speech, the blame game revved up again. GOP leaders reacted with barbed words to the governor’s pessimism for reaching a budget agreement before midnight.

“This isn’t about getting a budget, this is about shutting down government for political purposes,” House Speaker Kurt Zellers, R-Maple Grove, said. “Dayton threw in the towel.”

Dayton said the reason for the breakdown was the same as it had been all session: disagreement on spending and taxes. The two parties are still $1.4 billion apart, he said.

Dayton adjusted his original tax increase offer, narrowing those affected to just Minnesotans earning more than $1 million — his earlier proposal would have affected the top 2 percent. But Republicans didn’t budge from their commitment against new taxes.

“We’re talking about runaway spending that we cannot afford,” Zellers said.

According to the Minnesota Department of Revenue, 7,700 Minnesotans earn more than $1 million each year — less than 1 percent of the population.

Dayton’s latest tax proposal would net the state more than $746 million in tax revenue over the next two years, he said.

Signs of hope

Early Thursday afternoon, both GOP and DFL leaders seemed optimistic that a budget deal was near and that a government shutdown could be avoided. But none of the proposals pushed forward were accepted, leaving the two parties at an impasse with only hours before the midnight deadline.

“The agreement was in reach as early as the early afternoon today,” Senate Minority Leader Tom Bakk, DFL-Cook, said about an hour before Dayton announced negotiations had dithered. “It’s much more difficult now than it was four hours ago.”

Republicans offered to beef up the budget by delaying about $700 million in payments to K-12 schools and issuing “tobacco bonds.”

Both Dayton and Republicans proposed an additional $10 million be sent to the University of Minnesota. The Board of Regents finalized the University’s budget June 20, which includes a tuition increase, wage freezes and cuts to employee benefits.

Former University President Bob Bruininks said one-third of additional funding from the state would likely be used to soften tuition hikes in 2012.

Shortly after 8 p.m., Republican members of the House and Senate took up official seats in their chambers, waiting on the governor to call a special session that would allow them to pass a “lights on” bill to continue state government functions until July 11.

Deputy Senate Majority Leader Geoff Michel, R-Edina, said the two parties had agreed on seven of the nine remaining budget bills.

But Dayton has long opposed the idea of a “lights on” bill and kept his promise that he would not call a special session until the whole budget framework was ironed out.

The Health and Human Services budget has been “the big topic of discussion,” Senate Majority Leader Amy Koch, R-Buffalo, said before talks broke down Thursday.

Associated Content

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