Minnesota leaders report progress toward ending shutdown

MINNEAPOLIS Sun Jul 17, 2011 8:24pm EDT

Rest areas along I-35 in southern Minneosta are closed due to the state government shutting down on Friday going into the July 4 holiday after Democratic Governor Mark Dayton and Republican legislative leaders failed to reach a budget deal in St. Paul, Minnesota Friday July 1, 2011. REUTERS/Andy King

Rest areas along I-35 in southern Minneosta are closed due to the state government shutting down on Friday going into the July 4 holiday after Democratic Governor Mark Dayton and Republican legislative leaders failed to reach a budget deal in St. Paul, Minnesota Friday July 1, 2011.

Credit: Reuters/Andy King

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MINNEAPOLIS (Reuters) - Minnesota's political leaders on Sunday touted "considerable progress" in negotiating details of a state budget accord but did not say when a special legislative session might be held to end a 17-day government shutdown.

Democratic Governor Mark Dayton, Republican House Speaker Kurt Zellers and Republican Senate Majority Leader Amy Koch said talks on bills to implement their tentative budget deal were moving "in a positive direction."

"Considerable progress has been made," the three said in a joint statement. "A special session will be called as soon as our work is completed, and all bills have been reviewed and agreed upon."

Dayton, Zellers and Koch on Thursday said they reached agreement on the framework of a plan for ending the impasse that forced a government shutdown on July 1, when the fiscal year started without a new two-year spending plan in place.

State commissioners, legislative committee leaders and staff have engaged in three days of marathon talks to craft nine spending bills that will lay out precise terms of the broad agreement the governor reached with Zellers and Koch.

Dayton and the Republican leaders have all said they were unhappy with their proposed budget plan but believed it was a compromise they must support to end the government shutdown.

Dayton had hoped to work out the spending details and complete a review in time for a special session to open as early as Monday. The shutdown cannot end until the Legislature approves the spending bills and Dayton signs them into law.

With the talks running deep into the weekend, the special session could be pushed to the middle of the week.

More than 22,000 state workers were furloughed, state parks and historic sites shuttered and 100 road construction projects suspended when the shutdown began. The state lottery and two horse racing tracks also were forced to close.

The shutdown had its roots in part in the November election of Dayton, who called for income tax hikes to close a $5 billion budget gap, and Republican House and Senate majorities that sought a balanced budget without revenue increases.

The debate in Minnesota has mirrored those in the nation's capital over whether or how to raise the debt ceiling and in other states with politically divided executive and legislative branches. Still, Minnesota was the only state to shut down.

The roughly $35.4 billion two-year budget outlined Thursday included none of the income tax increases Dayton had sought and higher spending levels than Republicans wanted.

Republican leaders also agreed to give up on some social policy changes they had sought, such as restrictions on stem cell research and abortions, that were stumbling blocks, while some fiscal reforms opposed by Democrats were still under consideration.

The deal proposes to close a $1.4 billion difference between the Dayton and Republican spending plans by delaying $700 million in school payments and issuing $700 million in state debt with revenue from a tobacco industry settlement.

The use of those one-time measures to eliminate the budget deficit kicks the state's fiscal problems down the road two years and slightly increases them, economists have said.

The proposal may include $500 million in capital project bonding normally approved in even-numbered years as well.

(Reporting by David Bailey)

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Comments (1)
chiefbuffalo wrote:
There they go again, kicking the can down the road instead of standing firm and solving the problem once and for all. As for the tobacco settlement money, that well is about to dry up also. Smokers are smoking less and due to the restrictions on them, the tax revenue is drying up also. The tobacco company settlements are just that, the companies agreed to a settlement and once that money is gone what will you do. Does no one in government realize that the cow is going dry nationwide and there is no milk for the calf?

Jul 17, 2011 9:09pm EDT  --  Report as abuse
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