07/01/2011 02:14 pm ET | Updated Aug 31, 2011

Minnesota Government Shutdown 2011: Two-Thirds Of State Staff To Be Furloughed As Shutdown Begins

MINNEAPOLIS -- Minnesota's state government began a broad shut down on Friday going into the July 4 holiday after Democratic Governor Mark Dayton and Republican legislative leaders failed to reach a budget deal.

Parts of the government had already begun to shut down on Thursday ahead of the midnight budget deadline, including some websites and dozens of highway rest stops on one of the biggest travel days of the year.

The budget impasse means that some 23,000 of the roughly 36,000 Minnesota state employees will be furloughed and state parks and campgrounds closed ahead of what is usually their busiest stretch of the year for the July 4 holiday.

Dayton and Democratic legislative leaders Senator Tom Bakk and Representative Paul Thissen met for more than a week with Republican leaders including House Speaker Kurt Zellers and Senate Majority Leader Amy Koch.

The leaders met several times on Thursday in the governor's office.
Bridging the divide

Neither Dayton nor the Republican leaders gave any indication when they would meet next to discuss the budget.

"I deeply regret that the last week of intense negotiations between the Republican legislative leaders and Senator Bakk, Representative Thissen and myself have failed to bridge the divide between us," Dayton said in a speech.

He said his last proposed two-year general fund budget was $35.7 billion, but the differences between his approach and the Republican leaders had not changed since January. The gap between the two sides stood at $1.4 billion, he said.

Republican leaders had asked Dayton to call a special session to approve a temporary extension of funding for 10 days while the budget negotiations were completed, saying that they believed they were close to a budget deal.

Dayton dismissed the offer as "a publicity stunt."

"They have known for two months, I have said consistently, that I would not agree to anything until I agree to everything," Dayton said.

All but the most critical state functions will be suspended while the spending impasse continues into the new fiscal two-year period that starts on Friday, which would make the 2011 shutdown much broader in scope than one in 2005.

Dayton and the Republican-led legislature have been far apart in their public positions over a two-year budget plan to close a $5 billion deficit. Only the agricultural budget was approved during the legislative session that ended in May.

'Awful lot' of options

Dayton's first budget proposal included an income tax increase on the wealthiest state residents and an expansion in overall spending. Republican leaders first sought some tax cutbacks in aiming to halt spending increases.

In the latest negotiations, Republicans had offered to raise $1 billion of revenue by shifting schools payments and issuing bonds for tobacco settlement money and Dayton offered to limit his proposed income tax increase to residents earning more than $1 million per year. None of the offers stuck.

"Tax revenues are still in my view the fairest way to resolve this, but we have offered an awful lot of different possibilities and they have too," Dayton said.

Republican leaders had said they believed the sides were close to agreement, but Thursday afternoon Koch told reporters that after a temporary funding extension they could "work for the next week or so and get everything wrapped up."

Prison staffing, state police patrols and staffing at nursing and veterans homes were among services found critical and allowed to continue by a Ramsey County judge. Staffing at numerous other departments will be cut to the bare bones.

Other critical functions included the executive and legislative branches of state government and the courts.

Copyright 2011 Thomson Reuters. Click for Restrictions.

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