Both Sides Throw in the Towel As Clock Winds Down

The state of Minnesota has officially shut down.

After weeks of intense negotiations, capped by closed-door sessions through Thursday’s waning minutes, Gov. Mark Dayton and Republican lawmakers failed to agree on an operating budget for the coming biennium.

“I deeply regret that after two days of intense negotiations we have failed to reach an agreement,” Dayton said during a 10:30 p.m. press conference in his office.

Dayton continued: “I offered a plan to raise the taxes of only those Minnesotans who make more than $1 million per year. That is less than 0.3% of the state population. Despite many hours of negotiations, the Republican caucus remains adamantly opposed to new taxes.”

Earlier in the week, Gov. Dayton said a deal would have to be done by Wednesday in order to draft and pass the necessary legislation. But Thursday, the governor continued meeting with GOP leaders on-and-off trying to put an agreement in place.

At around 10 p.m. Thursday, Dayton rejected a 2-page temporary funding deal from the GOP leadership that would keep the Minnesota government operational for an additional 10 days.

"There are a lot of people on the steps of the Capitol right now asking us to not shut down the government. This document is their answer,” said Sen. Amy Koch (R-Buffalo), referring to the lights-on bill.

When asked his response to the 10-day temporary funding bill, Gov. Dayton’s answer was frank and clear: “I think it’s a publicity stunt,” he replied.

The day’s events smacked of the political posturing that has become characteristic of these budget negotiations.

There appeared a glimmer of hope early Thursday evening. But around 8:30 p.m., Rep. Tony Cornish (R-District 24B) reported to his seat in the Minnesota House saying he had received a message from the GOP leadership to do so. “There is always time for a deal,” Cornish told reporters as he walked into the House.

The gesture was called “grandstanding,” “theatrics” and “mock legislature” by Democratic minority leaders Sen. Tom Bakk and Rep. Paul Thissen.

Bakk took the podium at 9 p.m. and pleaded with his GOP counterparts to return to the negotiating table instead of sitting in the Legislature. “We are running out of time,” he said plainly.

Bakk’s statement proved prophetic. Fiscal year 2012-13 began at 12:01 a.m. today and, without a budget in place, the State of Minnesota was unable to fund its myriad services or pay salaries to its almost 33,000 state employees—22,000 of which left their offices today without a job to return to.

Owing to a June 29 ruling by Ramsey County District Court Judge Kathleen Gearin, state correctional facilities, nursing homes, public safety, and payment of medical services are all considered “core functions” of government and will continue operating. Everything else is no longer functional until a budget deal is reached.

The heart of the impasse has always been the $1.8 billion difference between Gov. Dayton’s operating budget and the budget proposed by the GOP. Central to the issue is the method for closing Minnesota’s $5 billion budget gap.

While both Dayton and the GOP leadership have committed themselves to working further toward an agreement, no date has been set for the next round of negotiations.

Wright County and the cities of St. Michael and Albertville have all said they are "ready" and had already faced the prospect of an impasse. 

Neither St. Michael nor Albertville receive much in terms of mutual aid, but Albertville will feel the bite of a shutdown when it comes to the all-important interchange project. 

Road construction on that major change to the city's central corridor will be delayed indefinitely. 

In St. Michael, business expansion will take a hit. The new Kwik Trip may see construction cease since inspectors are contracted through the state. Electrical work can't be done without a complete inspection. 

"It's tough, because you'd like to see the project move ahead, but it simply can't," said Marc Weigle, Community Development Director. Many remodeling and refurbishing projects might also be brought to a halt. 

"The city will be fine," Bob Derus, City Administrator, said of St. Michael. "But the people who feel the pinch will be those that lose jobs."

There aren't a host of people employed by the state in St. Michael or Albertville, according to DEED (the state's bureau for all things labor-related). Those that are, but aren't "essential," will stay home until the two sides come back to the table and reach an agreement.