Dayton signs budget, shutdown ends

Lawmakers worked through the night to pass budget bills and set the stage for ending the state shutdown.

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Sen. Amy Koch got a big hug from Speaker of the House Kurt Zellers after a special session at the Capitol in St. Paul , Minn., ended just before 3:45 a.m. Wednesday, July 20, 2011.

Photo: Kyndell Harkness, Star Tribune

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Minnesota's 20-day state government shutdown ended this morning, as lawmakers cast their final votes on the state’s budget and Gov. Mark Dayton signed the bills.

The special session concluded just before 3:45 a.m. Wednesday after a marathon of votes on nine budget bills and a $500 million bonding bill. There was little fanfare when the deal was done and lawmakers had erased a projected $5 billion deficit largely through one-time borrowing.

The dormant gears of Minnesota’s government will start moving again, after Dayton signed the bills at a 9 a.m. ceremony.

Republican leaders said after the final votes that they were satisfied with the final product.

“We were dealt a situation,” said House Speaker Kurt Zellers. “I think we dealt with it the best that we could.”

Asked whether her members would run on or against this budget in the next election, Senate Majority Leader Amy Koch said they would stand behind it.

“We’re going run on this budget,” Koch said. “We’re going to talk about closing a $5 billion forecast deficit without raising taxes. That’s a big thing. And we’re going to talk about the major reforms in these bills.”

Both leaders said they learned during negotiations that Dayton is open to reforms. “He is an agent for reform and change,” Zellers said.

One of the last bills to be approved was K-12 education, the largest slice of the state’s budget. The House signed off on the $13.6 billion bill just over an hour after it was made public.

The bill includes a provision to delay an additional $700 million in school payments, a key part the final budget deal struck by Dayton and Republican leaders. Democrats wasted no time assailing the tactic, which forces schools to borrow additional funds.

“More borrowing, more debt,” said Rep. Frank Hornstein, DFL-Minneapolis “This money is not going to the classroom. It’s going to some bond house on Wall Street.”

Rep. Carlos Mariani, DFL-St. Paul, said the shifting is “beneath us as a people.”

Republicans touted many reforms they were able to keep in the final bill. Those include teacher evaluations, literacy reward funding and the elimination of integration aid.

“This is not doom and gloom,” said Rep. Sondra Erickson. “This is a great day for the children of Minnesota, for the parents of Minnesota, and for our teachers and our principals, because we’re moving forward.”

Highlighting the rush to finish, legislative leaders gaveled in the special session even before some of the largest and most controversial bills had been finalized and released to the public and other lawmakers.

Legislators pushed toward finalizing a $35.7 billion budget that would end the longest state government shutdown in recent U.S. history.

Earlier, DFL Gov. Mark Dayton ordered a brief special session that legislative leaders were honor-bound to end no later than 7 a.m. Thursday.

Zellers, R-Maple Grove, called the budget deal the "essence of compromise," and said it included "some reforms ... that will change our state for a generation."

But House Minority Leader Paul Thissen, DFL-Minneapolis, called it "the most irresponsible budget in state history. Their budget forces the state to beg from seniors and the disabled with draconian budget cuts, borrow money to temporarily fill the deficit with one-time funds and steal from our children's future by expanding the K-12 school shift."

Few DFLers voted for the budget bills, and most Republicans voted for passage without comment -- a stark contrast from the congratulatory speeches typically offered by the winning side when its bills pass.

Details of the budget bills dribbled out through the evening Tuesday, along with the projects that made up a hastily composed, $500 million bonding bill. The capital investment plan sends nearly 40 percent of the money to colleges and universities, numbing some of the sting of higher education budget cuts.

The massive health and human services was one of the last bills to be released. At $11.3 billion, it protects those already insured and current eligibility levels but does cut payments to health care providers. The bill phases out by 2019 the 2 percent health care provider tax that funds MinnesotaCare. The K-12 bill requires local districts and state to develop teacher evaluation plans, boosts special education funding and accelerates payments to charter schools.

The budget agreement was the result of a series of private meetings among Dayton and GOP House and Senate leaders. It adds $1.3 billion in borrowing and cuts an additional $1.9 billion to other changes that eliminate a $5 billion projected deficit. Dayton and legislative leaders agreed on a dozen bills, including a new spending plan for Legacy Amendment funding and pension reform legislation.

A rocky start

From the time Dayton ordered the special session on Tuesday morning, the day evolved into a herky-jerky session of private caucuses and hurried bill-passing. Moments after the legislators convened, they immediately recessed for three hours to finish bills and wrangle votes.

Taken to the brink by a contentious legislative session that started in January and stretched well into summer, some members objected to even a few more hours of closed-door debate.

As the vote to recess was taken, Rep. Jeff Hayden, DFL-Minneapolis, yelled out a loud "N-o-o-o-o-o."

"Let's get it done now," he called out, reflecting a mood among several legislators to end the special session quickly.

Legislators returned just after 6 p.m. with a workmanlike resolve to slog through the bills. With little debate, the Senate breezed through the judiciary budget bill, approving it 57-7. A few minutes later, the House approved the transportation budget bill, 71-56.

Dayton and Republicans who control the Legislature had been at loggerheads for months over how to resolve the state's shortfall and the persistent gaps between its income and its obligations. Dayton had insisted on raising income taxes on the richest Minnesotans, a plan that Republicans refused to embrace. Republicans wanted to balance the books largely through cuts, but Dayton said that would hurt the poorest and most vulnerable Minnesotans.

Nearly two months after a legislative session that failed to broker a deal, Dayton and Republicans agreed to a plan both sides openly detested. It called for withholding $700 million in payments to K-12 schools, pushing the amount owed schools to a record $2.1 billion and selling nearly $700 million in bonds backed by revenue from the state's tobacco settlement for the rest.

Rep. Michael Beard, R-Shakopee, said both Republican and DFL legislators were feeling the anger from Minnesotans wanting to end the shutdown.

Minnesotans, he said, are saying, "Yes, there might be too much government in our lives. But, darn it, we got to get it back to work because we can't even cut hair or file teeth or get a driver's license right now."

A gradual restart

Getting a government that's been closed for 19 days back online won't be simple. Even after legislators pass bills and Dayton signs them, 22,000 laid-off state workers must be called back.

Department of Natural Resources Commissioner Tom Landwehr said late Tuesday that the parks reservation system will be back online the first day workers get back. Some parks, he said, could be open in as little as 24 hours, while others will remain closed to repair vandalism or storm damage. "We are all eagerly awaiting the chance to get back at it," Landwehr said.

Other parts of government will also start to kick in. Racing Commission members can go back to Canterbury Park to oversee races. License bureaus will have to catch up on weeks of backlog. The Minnesota State Lottery can start printing tickets again. Road projects could take weeks to get back on track.

"Just because a bill is passed, it doesn't mean that agencies are up and running," Minnesota Management and Budget Commissioner Jim Schowalter said. "We're just going to play this by ear and work as fast as we can."

baird.helgeson@startribune.com • 651-222-1288 mkaszuba@startribune.com • 651-222-1673 vonste@startribune.com • 612-673-7184

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