- The Washington Times - Thursday, June 30, 2011

It’s lights out for Minnesota.

A Democratic governor who sought to raise taxes on the wealthiest residents bumped heads with a Republican-controlled legislature, and their protracted budget impasse shut down state government just after midnight on Friday.

Both sides spent weeks negotiating over how to deal with a projected $5 billion deficit. The talks, which continued in secret Thursday, included marathon sessions over the past seven days between Democrat-Farmer-Labor Party Gov. Mark Dayton and key lawmakers, trying to work through differences and create a compromise two-year state budget. But no such luck.

While Republican lawmakers put on a confident front Thursday afternoon and staged a symbolic sit-in in the legislative chambers, Mr. Dayton emerged from the statehouse Thursday evening telling reporters that a budget agreement was unlikely.

The governor, in a news conference late Thursday night, said he was committed to making it right, even as he defended his position, calling suggested Republican budget cuts Draconian. He described Thursday as “a night of deep sorrow.”

“I will continue tonight, tomorrow and however long it takes to find a fair and balanced compromise,” Mr. Dayton said, noting real progress had been made in the past few days but a fundamental divide over the revenue gap kept them from resolution.

“One basic difference remains. They don’t want to raise revenues on anyone and I believe the wealthiest Minnesotans can afford to pay more taxes.

“I really believe I’ve done everything I possibly could,” he added. “It takes two sides to work out a budget, a compromise. … We share the same goals of making government as cost-effective as possible.”

As the clock ticked down toward the Cinderella hour Thursday, state residents and groups impacted had braced for the crisis. Barriers were erected around the Capitol on Wednesday in anticipation of decreased security.

Union groups had protested in numbers at the capital Thursday to urge legislators to fix the budget — now. The governor has refused Republican calls for a special legislative session that would have

allowed them to work on line-budget items and avert a shutdown.

Preparing for the worst, a Ramsey County judge stepped in to rule Wednesday on saving a few essential public services for cities and counties. Schools will remain open, nursing homes that service poor patients will continue to operate, and police officers will continue to patrol.

But the state zoo, a popular horse racetrack, state parks and jobs for about 40,000 state workers will end after a monthlong stalemate that sent tempers flaring among divided residents.

Supreme Court Justice Kathleen Blatz, an appointed special master, will hear funding petitioners in court starting at 8 a.m. Friday as groups plead their cases for money during the shutdown period.

The Minnesota legislature adjourned in May with no budget in place, forcing a debate that has since yielded no agreement. Republicans sought a $34 billion budget with deep cuts while the governor argued for a $35.8 billion budget that included a tax on the top 2 percent of the state’s wealthiest residents — a sticking point for Republicans.

“This really is a power fight — not a fiscal fight — over the fundamental principles of how much power government should have over us,” says Steve Stanek, a tax policy research expert at the Heartland Institute in Chicago. “I think that’s why there is so much division. I think some lawmakers see this and that is why they are standing firm.”

A similar budget stalemate occurred in Iowa, just as presidential hopefuls traversed the cornfields and farm halls to attract future caucus support.

Lawmakers there, in a legislature divided between a Republican House and a Democratic Senate, continued an 11th-hour negotiation over budget items including education, human services, infrastructure and property-tax relief, which has been an ongoing sticking point to an Iowa deal. They finalized a budget plan Thursday afternoon, giving approval to a $5.9 billion spending deal.

In the wake of a Minnesota shutdown, all courts will remain open, funding for K-12 education will continue along with welfare assistance and unemployment benefits, Judge Kathleen Gearin ruled. But state construction projects will cease, highway rest stops will close and services like driver’s license testing will be suspended along with new claims for veterans services, including tuition reimbursement.

Mr. Stanek said there is no telling how long a shutdown might last, noting “a real impasse” that has exposed fundamental divisions in policy and political philosophy.

“The governor and lawmakers are far apart on spending and tax issues,” Mr. Stanek said. “Sometimes you get these backroom deals where leaders meet in private and come out with a proposal and they twist arms of allies and it doesn’t last real long. I hope a lot of lawmakers do stand up for good principles here, for trying to keep taxes low and trying to set good spending priorities. Don’t cut a deal just to make a deal.

“We have a lousy economy, we have very slow growth and many people who are unemployed or underemployed,” he said. “They have had to make tough decisions on how to manage their money. The state ought to do the same.”