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State of uncertainty

Published (7/15/2011)
By Nick Busse
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House Speaker Kurt Zellers recognizes Rep. Kim Norton so she can ask a question of Rep. Dean Urdahl during the May 23 floor debate of the Legacy Funding Conference Committee report. (Photo by Tom Olmscheid)The Land of 10,000 Lakes has entered uncharted waters. Twenty-two thousand state workers are unemployed, millions of Minnesotans are unable to access a multitude of state services, and essential government functions like law enforcement are operating under court order.

Such is the fallout from one of the most difficult and controversial legislative sessions in recent memory — a session that ended May 23 with no budget deal.

The impact of Minnesota’s ongoing state government shutdown is varied and wide-reaching: state troopers are patrolling the highways, but no one can get new driver’s licenses. Nursing homes are open, but 26,000 families are no longer receiving child care assistance. The prisons are open, but state parks are not.

How did we get here?

For the first time in decades, Republicans took control of both houses of the Legislature in 2011, and brought with them a zeal for reining in government. DFL Gov. Mark Dayton wanted to “invest in the future” by raising new revenues for state programs, but pledged to work together with lawmakers to solve the state’s looming budget crisis in way that would be fair to everyone.

Initially, there were signs of cooperation. Dayton and the Republicans worked together to streamline environmental permitting for businesses, and enacted an alternative teacher licensure law that House Speaker Kurt Zellers (R-Maple Grove) called “a generational change in Minnesota.”

But the tone quickly changed when it came to the state’s more than $5 billion budget gap. Republicans said Minnesota is taxed enough already; that raising taxes would only weaken the state’s sluggish economic recovery. DFLers and Dayton argued new revenues are needed to avoid kicking thousands off of health care coverage and inviting higher property taxes and college tuition.

Fast forward to six months later. The legislative session has come and gone without a budget agreement. The two sides’ positions are fundamentally the same as they’ve been all along. They’ve narrowed the gap to $1.4 billion with their latest proposals, but the gulf between their two respective philosophies of government is as wide as ever.

Late in the evening on June 30, Dayton announced the bad news.

“I deeply regret that the last week of intense negotiations… have failed to bridge the divide between us,” he said.

No agreement

For much of June, Dayton and legislative leaders met off and on behind closed doors for budget talks. As negotiations intensified ahead of the June 30 deadline to prevent a shutdown, they agreed to a “cone of silence” that prevented either side from divulging details on the discussions.

For weeks, reporters camped outside the negotiating rooms waiting for word on whether progress was being made. But in the end, the cone of silence was lifted only to announce that a shutdown was imminent.

“This is going to be, I think, one of those moments in our state’s history we’ll look back on and be very disappointed,” Zellers said.

On specific budget areas such as K-12 education, Dayton and the leaders made significant progress toward compromise. But on the overall issue of taxation and spending, they remained worlds apart.

From the beginning, Dayton argued the state needed additional revenue, and he proposed raising taxes on high-income earners. He originally proposed $3.2 billion in new revenues, but later revised it down to $1.8 billion. He has now reduced it to $1.4 billion, and says he will go no further.

“I’m willing to compromise, I’m willing to meet halfway, but I’m not willing to give up what I believe and what I was elected by the people of Minnesota to do,” he said.

Republican leaders said their proposed budget was already the largest in the state’s history and that no new revenue would be needed. Zellers said the governor’s proposed spending levels are unsustainable.

“We’re talking about runaway spending that we can’t afford. And we will not saddle our children and grandchildren with mounds of debts, with promises for funding levels that will not be there in the future,” he said.

Republican leaders offered to scrap their original plans for $200 million in tax relief and put the money instead toward increased spending. Dayton accepted that plan, but rejected Republican proposals to increase the K-12 aid payment shift and bond for future tobacco settlement payments — sources of alternative revenue that Dayton said would only kick the can further down the road.

With the date and time when the House is scheduled to reconvene on the Vote Register above his head, Rep. Dean Urdahl packs up paperwork and personal items from his Chamber desk after the House adjourned the 2011 legislative session. (Photo by Tom Olmscheid)Endgame remains unclear

On July 1, the state began an unprecedented state government shutdown. A judge ordered that essential government services like law enforcement and payments to school districts continue at their previous funding levels, but other parts of the government remain closed indefinitely.

Republican lawmakers have proposed passing a “lights-on” bill that would fund government services temporarily, and called on Dayton to call a special session for that purpose. Dayton called it a “publicity stunt,” and insists that he will not call lawmakers back to St. Paul until there is a global budget agreement.

Republicans argue Dayton “threw in the towel,” to use Zellers’ words, on budget negotiations at a time when lawmakers were still ready and able to work. He and other Republican leaders laid the responsibility for the shutdown squarely at Dayton’s feet, and say his motivation is political.

“This governor has chosen maximum pain — maximum pain for political gain,” said Sen. Geoff Michel (R-Edina).

Dayton and lawmakers have met several times since the shutdown began, but have made no progress toward agreeing on a dollar amount for state spending. At their July 6 meeting, Zellers and Senate Majority Leader Amy Koch (R-Buffalo) heard Dayton’s latest proposal: a $1-per-pack tax increase on cigarettes. Zellers called the governor’s proposal “very disappointing and a step backwards.”

“We’ve made it very clear that we do not believe we need a tax increase to balance our budget,” Zellers said.

Dayton said the Republicans’ comments show they are unwilling to compromise. He said he’s trying to come up with alternative ways to raise enough revenue to bridge the $1.4 billion gap that remains between his budget plan and theirs, but that they refuse every plan he offers.

“Once again, it’s their proposal or nothing at all. And that’s just not responsible leadership,” Dayton said.

From the Republicans’ perspective, they’re only fulfilling their duty to their constituents, to whom they promised a new way of governing that includes no new taxes.

“If that’s what we were elected on, how do our members go back home and say we gave up on all of our principles to the governor?” he said.

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