Dayton outlines 'painful' shutdown

Gov. Mark Dayton on Wednesday proposed a broad government shutdown that would touch every corner of the state and reach deep into Minnesotans' homes.

The governor's proposal -- which must still be ruled on by a judge -- would maintain critical services but close all state parks, the Minnesota Zoo, the state lottery and most state road projects by July 1, when the current state budget runs out. K-12 schools, local governments and health providers would no longer receive state payments.

Despite what he said would be the vast and enormous impact of such a shutdown, Dayton said Wednesday that a short government closure "still pales in comparison" to the impact of a Republican "all cuts" budget.

"A temporary shutdown, painful as it may be, is not an equivalent to the kind of catastrophes that would be ongoing if I acceded to this budget," Dayton said. "That's just a fundamental principle."

Republicans said that instead of shutdown preparations, Dayton should be crafting a budget compromise.

"We do not believe a government shutdown is necessary and a tax increase is not necessary," said House Speaker Kurt Zellers, R-Maple Grove. Zellers and Senate Majority Leader Amy Koch, R-Buffalo, said they will release another "comprehensive" budget offer on Thursday.

Republicans have adamantly opposed Dayton's proposed tax increases and instead passed a budget last month that used cuts to eliminate the state's projected $5 billion deficit. Dayton vetoed that budget and the two sides have been at impasse ever since.

On June 30 the existing budget will expire, along with the state's authority to spend money.

If Dayton and GOP leaders fail to agree on a two-year state budget by then, a court could end up dictating which state services could continue and which would close.

Schools told to prepare

Even before final decisions are made, preparations took on fresh urgency Wednesday, with state Education Commissioner Brenda Cassellius telling superintendents to begin contingency planning. Districts would need to dip into their own reserves or borrow to keep summer school going. Only six staffers have been deemed critical in the education department -- fewer than the state Dentistry Board, which would remain open.

Management and Budget Commissioner Jim Schowalter said Dayton's list is much narrower than one advanced earlier this week by Attorney General Lori Swanson, and is limited to critical health and safety functions.

Ramsey District Judge Kathleen Gearin will hear Dayton's request on June 23 -- just one week before state funds start to run out.

In her petition, Swanson asked the court to fund a broad expanse of state services and appoint a "special master" -- essentially a shutdown referee, to sort the details.

Dayton offered a different solution in his petition.

"Order the parties to mediate," Dayton asked the court. He suggested former Supreme Court Chief Justice Kathleen Blatz or former Associate Justice James Gilbert to act as court-appointed mediators. Swanson had asked that Gilbert be appointed special master.

Only if mediation fails, Dayton's brief said, should the court infringe "on the constitutional powers of the legislative and executive departments."

Some Republican and Democratic lawmakers have also said that even as the state faces a shutdown, it is unconstitutional for a court to step in to fund some services and not others. On Thursday, a Minnesota Senate Rules committee will take up a "resolution authorizing Senate intervention in temporary funding litigation."

Under Dayton's plan, cities and schools would not get state aid payments, but prisons and the sex offenders would be guarded. The governor's residence would stay open and Central Corridor construction would continue. The state's bison herd and fisheries would get care, but Minnesota would not pay providers of health care to 600,000 citizens. The state education department would shrink to six staffers -- fewer than the state Dentistry Board, which would keep six and a half.

"Whose budget is more draconian?" demanded Sen. Julianne Ortman, R-Chanhassen, using the word Dayton has often employed to describe the GOP's spending cuts. She called his shutdown plan "complete hypocrisy."

A hard shutdown

To keep summer programs operational and fall preparations on track, school districts across the state would have to tap reserves or borrow funds. While some districts may have healthy reserves, others are still recovering from delayed and shifted funds in recent years.

"It's been one big IOU after another," said Minnesota School Boards Association spokesman Greg Abbott.

Already the state has sent out tens of thousands of layoff notices and alerted vendors that state contracts would be suspended and checks would stop.

Despite what looks like a hard shutdown, Dayton actually recommends keeping a third of the state's employees working, including most corrections officials and virtually all of the judicial branch.

The Department of Human Services would keep 4,300 workers mostly providing direct services in facilities for people with disabilities and the Minnesota Sex Offender Program. A small number of administrative staff would keep systems in place to provide benefits to current enrollees in public assistance programs, although they would not take on any new clients after this month. That would include Medicaid, General Assistance, MinnesotaCare, refugee cash assistance, group residential housing, food support, adoption assistance and other programs.

Schowalter said payments to individual Minnesotans would still go out, but "payments to providers would not be appropriated."

That could leave some providers a bit short.

Susan Wingert, whose company provides in-home medical services to children, said 65 of those children could have to live in hospitals if her funding stops.

"If I don't get funded, I run out of cash," said Wingert, owner of Pediatric Home Services. A suspension of state payments -- even reimbursed -- would leave her without money to pay her staff, suppliers or care for the children.

An extended shutdown could force some nursing homes out of business, said Patti Cullen, CEO of the trade group Care Providers of Minnesota.

"Minnesota's frail and poor residents should not be pawns in the political fight," said Gayle Kvenvold, CEO of Aging Services of Minnesota. Care Providers and Aging Services plan to file a joint brief with Ramsey County court next week, asking a judge to ensure their services get funded. City officials will file their own court request and may be joined by school districts and others.

House Majority Leader Matt Dean, R-Dellwood, underscored the providers' concern.

"I find it stunning that if your top priority is life [and] safety that we are not going to pay people who take care of folks in nursing homes or when they show up at our hospitals," he told Schowalter in a legislative hearing Wednesday.

Republican legislative leaders and the governor plan to meet again Thursday to continue their budget negotiations.

Staff writers Bob Von Sternberg, Baird Helgeson, Eric Roper, Mark Brunswick, Warren Wolfe, Pat Doyle and Katie Humphrey contributed to this report. Rachel E. Stassen-Berger • Twitter: @rachelsb