Minnesota governor signs bills ending shutdown

MINNEAPOLIS Wed Jul 20, 2011 1:17pm EDT

1 of 3. Grass grows in front of the state capitol building after Minnesota Gov. Mark Dayton signs a dozen bills that eliminate the state's $5 billion budget deficit and reopen state government and services that have been shut down for three weeks, in St. Paul, July 20, 2011.

Credit: Reuters/Eric Miller

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MINNEAPOLIS (Reuters) - Minnesota Governor Mark Dayton on Wednesday signed several budget bills approved by the legislature in a marathon special session to end a state government shutdown that has lasted nearly three weeks.

Called to a special session on Tuesday afternoon, the state House and Senate approved all 12 bills put to it, including mammoth health and human services and education bills that were approved in the early hours of Wednesday morning.

"It is not what I wanted, but it was the best option that is available and would be for any time," Dayton told reporters after signing the budget bills.

State operations will take some time to return to normal. Officially, dollars won't begin to flow until Thursday morning, but state officials were already starting to get operations up and running on Wednesday.

Minnesota leaders failed to reach a deal to close a $5 billion budget deficit before the new fiscal year started July 1, leading to the longest government shutdown in state history.

The new budget delays school payments and uses bonding based on revenue from a settlement with tobacco companies, leaving long-term fiscal issues unresolved, economists have said.

The debates leading up to the shutdown included Democratic calls for additional revenue and Republican vows to halt spending increases that have mirrored those in the nation's capital over the debt ceiling.

Like many states, Minnesota has divided executive and legislative branches. In November voters elected a Democratic governor and Republican majorities in the House and Senate. Still, Minnesota is the only state thus far this year to shut down.

Nearly two weeks into the shutdown, Dayton brokered a deal with Republican House Speaker Kurt Zellers and Republican Senate Majority Leader Amy Koch. They worked out the details over the next several days, then Dayton called lawmakers back.

The state's political leaders agreed to put strict limits on the session, limiting it to a dozen bills over two days, with no amendments.

The House and Senate approved the bills and adjourned less than 13 hours after the sessions opened.

The governor estimated the two-year budget at about $35.7 billion and said it preserved essential services. What was not in the budget was as important as what it contained, he said.

The budget did not contain restrictions on stem cell research, abortions or collective bargaining rights for state workers among other changes Republicans had sought.

Dayton said he was relieved the shutdown was ending, but still believed a tax increase was the best solution for the state's budget. Cuts at the state level also will push local governments to raise property taxes, he said.

AN UNHAPPY COMPROMISE

The bills approved Wednesday provide for a variety of spending programs and include about $500 million of bonding for capital projects. The legislature normally passes bonding bills in even-numbered years.

More than 22,000 state workers were furloughed when the state shut down. They have up to three days to return to work and will not receive retroactive pay because they were allowed to file for unemployment during the shutdown.

State parks, historic sites, rest stops, the state lottery and two horse tracks were closed in the shutdown, and about 100 road construction projects were suspended.

Some state parks could reopen shortly, but others may take longer to reopen if they sustained damage during the shutdown.

The budget gives some relief to about 300 bars, restaurants and liquor stores that were unable to buy alcohol because state permits had expired and could not be renewed during the shutdown. They may resume liquor purchases Thursday.

The Legislature approved big budget items along party lines including the education, health and human services and omnibus tax bills. The capital spending bill drew broad support and Dayton said it could account for up to 14,000 jobs.

Democratic House Minority Leader Representative Paul Thissen called the framework a "beg, borrow and steal budget" and had urged a "no" vote on the proposed tax bill.

Dayton and Republican legislative leaders were unhappy about the details, but resolved to approve the agreement.

"While the budget agreement was not the most ideal to anyone, it was time to compromise, end the shutdown and put Minnesota back to work," Republican Senate Deputy Majority Leader Geoff Michel said afterward in a statement.

The negotiations over the budget details occurred behind closed doors at the Capitol over the last several days. Nonpartisan staff estimated spending at about $34.3 billion for the fiscal years 2012 and 2013.

The deal closed a gap between the Dayton and Republican spending plans by delaying more than $700 million of payments to schools and issuing $640 million of bonds using revenue from a tobacco industry settlement.

Economists have said those proposed budget fixes would push Minnesota's longer term fiscal problems into the next two-year state budget and also make them slightly worse. Fitch debt ratings agency stripped Minnesota of its AAA bond rating during the shutdown citing in part use of one-time budget fixes.

Dayton said the budget approved Wednesday would not change the state's outlook.

"This is not by itself a dramatic change, but it is a change for the worse not the better," Dayton said.

(Reporting by David Bailey; Editing by Cynthia Johnston)

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Comments (2)
ilaboo wrote:
nothing new–just gave the gov more money to spend needlessly–except this time they will be borrowing it ala California

Jul 20, 2011 7:39pm EDT  --  Report as abuse
ilaboo wrote:
nothing new–just gave the gov more money to spend needlessly–except this time they will be borrowing it ala California

Jul 20, 2011 7:41pm EDT  --  Report as abuse
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