A government shutdown was all but certain when a crowd of Republican lawmakers gathered outside Gov. Mark Dayton's office at about 10:30 Thursday night.

House Speaker Kurt Zellers and Senate Majority Leader Amy Koch unveiled offers they had made earlier in the day, including expanding the school shift and issuing tobacco bonds. They also revealed that Dayton had briefly taken his tax plan off the table.

But with two hours left before a midnight shutdown, Zellers said Dayton had "thrown in the towel."

"This is about shutting down government for a political purpose," Zellers said. He added: ""This is going to I think be one of those moments in our state's history that we'll look back on and be very disappointed [with]"

Dayton said in a letter that he could not agree to both the K-12 shift and tobacco bonds because they are not "permanent revenues." He instead offered a 3 percent income tax increase on people earning more than $1 million, or a 1.5 percent increase along with corporate tax reform, non-resident estate taxes and "sales tax reforms."

Republican leaders rejected his offer in a letter, noting that "any proposal that includes a tax increase does not have the support to pass either the House or Senate."

"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," Zellers said outside the governor's office. "This is debt that they can't afford. It's debt that we can't afford right now."

GOP Negotiation Handout