Budget deal reached; state employees will return to work

07/09/2005

ST. PAUL — Minnesota’s partial government shutdown ended early today with the passage of a temporary spending plan and an agreement by state leaders on the outlines of a two-year budget.

Gov. Tim Pawlenty and legislative leaders emerged from a nearly 16-hour bargaining session to announce the deal, which included the “lights on’’ measure to send state employees back to work immediately. It will last through Thursday.

“I’m pleased to announce agreement has been reached by the legislative leadership to put Minnesota back to work,’’ Pawlenty said at a news conference that began around 2 a.m. CDT.

The temporary spending plan, which restores funding for shuttered agencies at the previous year’s levels, passed the House 106-9 and the Senate 53-1. Pawlenty signed it at 3:41 a.m.

The rest of the budget work will spill into next week, when lawmakers must pass two-year budget bills for education, transportation, health care and taxes by Wednesday night.

The long-term budget agreement calls for $800 million in new spending on public schools, primarily through yearly increases of 4 percent in the basic school aid allowance. Lawmakers will set aside $78 million of incentive funding for schools that base teacher pay raises more on performance than seniority.

On health care, no one who is currently eligible for the MinnesotaCare insurance program will lose those benefits, and a $5,000 annual cap on outpatient treatment will be repealed.

The main new revenue source is new tobacco charges, including 75 cents more on each pack of cigarettes.

Pawlenty compared the timing to a parent waiting for a teenager coming home after curfew.

“I’m glad that they’re here safe, but I’m mad it’s late,’’ he said.

“There is no doubt this was a frustrating, ugly and difficult process to watch,’’ said House Minority Leader Matt Entenza, DFL-St. Paul. “But winners have emerged. They are our schools, our children and health care for working Minnesotans.’’

The partial government shutdown started July 1, locking out 8,900 state workers and curtailing state-funded services ranging from new driver’s license applications to job counseling for refugees.

State employees had the option of taking vacation pay for the first two weeks of the shutdown, but about 3,150 employees would have burned up their vacation benefits by next Friday, according to state employee relations officials. After July 15, the idled employees faced formal layoffs, costing the state millions of dollars in unemployment and severance costs.

But in many ways, the shutdown’s effects were small. Essential services, such as the State Patrol and some health and welfare programs, continued operating. Partial budget bills passed piecemeal kept other services going, and a last-minute deal kept state parks open.

But the failure to finalize a new $30 billion budget provoked widespread anger and disgust among Minnesotans, raising pressure on all sides to reach a deal.

“If you’re an incumbent — I don’t know who the good guys are and the bad guys are — you gotta go,’’ said Tom Grant, a sales manager from New Brighton. “Failure is not an option when it comes to looking out for the people of Minnesota. Enough is enough. This is a joke.’’

Many states frequently miss deadlines for enacting new budgets. But Minnesota, unlike other states, has no law that would automatically extend spending past the end of its fiscal year if a new budget is not approved.

Lawmakers were supposed to finish the budget by May 23, but that deadline passed with only three major spending bills approved — for public safety, higher education and several smaller state agencies.

A special session started moments after the regular session ended. It was the state’s ninth special session in 11 years, but even that wasn’t enough to prompt a swift resolution of the conflicts over spending and taxation.

Budget negotiators worked into the early morning hours Thursday, Friday and today in search of a compromise that would end the shutdown.

Pawlenty and his Republican allies were holding out for the so-called racino at Canterbury Park, pushing for floor votes in the House and Senate on the issue. The Republicans control the house while Democrats are the majority in the Senate.

Democratic leaders said they weren’t interested in the Shakopee casino. But they clung to corporate tax measures opposed by Republicans until the last minute.

The casino plan was a key sticking point. The owners of Canterbury Park horse track and poker club were willing to pay the state $210 million over the next two years for permission to add slot machines and other casino games, breaking up an American Indian casino monopoly in the state.