Shutdown tab: $4.68 million a day

06/28/2005

Mark Brunswick,
Star Tribune
June 29, 2005

Shutting down state government wouldn’t save money, it would cost money—$4.68 million per day, to be exact.

The meter would continue to run on the costs of shuttering doors and turning off lights if legislative leaders and Gov. Tim Pawlenty fail to reach an agreement on a budget logjam and a partial shutdown occurs in two days.

A little more than half of the daily tab would be employee compensation and benefits to the 14,700 workers who were deemed unessential and who would not be working. About $1.8 million would be lost revenue from license charges and other fees not processed, including $60,000 a day in lost revenues from state parks. For the parks, much of those losses never would be recouped.

State officials estimate it would take more than six months of an extended shutdown before the state would realize any savings, and even then, the loss of state services would not be worth it.

“That’s kind of like the laundry business down the street saving money by shutting their door and laying everybody off. Yeah, you save money, but you can’t get your laundry done, either,” said Cal Ludeman, commissioner of the Department of Employee Relations, which is coordinating the shutdown proceedings.

Workers’ costs

Affected state workers have agreed to a 14-day period after any shutdown in which they would use accrued vacation and sick time. After that, they would be laid off.

Also, the state would be required to pay affected workers for any unused vacation after that. The average state worker is carrying 151 hours of unused vacation time. All vacation time alone is worth about $60 million, Ludeman said.

About 1,000 workers have no time accrued and would start losing money with a shutdown on Friday. About 3,000 of the workers have been employed by the state for less than three years of continuous service and are not eligible for a contractually agreed upon six-month payment for health insurance coverage.

“If we had any other employer in this state talking about laying off 15,700 people, there would be a special session called and they would work 24 hours a day to get something done,” Jim Monroe, executive director of the Minnesota Association of Professional Employees, said at a news conference at Fort Snelling State Park, which would be closed in a shutdown.

The average pay for state workers represented by the American Federation of State, County, and Municipal Employees is about $35,000 a year. The state’s largest unions have worked at making low-interest hardship loans available through several credit unions, but union leaders say the efforts are not likely to be enough.

For affected workers, the numbers may not calculate into the millions, but the impact will be dramatic—and immediate.

The effect is already there for Deepa De Alwis, a $20-an-hour chemical adviser for the Department of Agriculture and a seven-year state employee. Her husband is an Army Reservist who just returned home from Iraq after becoming sick. For the first time since their children, ages 4 and 21/2 were born, they had planned on taking a family vacation.

But with just 31/2 days of vacation left after taking time to tend to sick family members this year, she is remaining at work while her husband and son fish at Detroit Lakes and her daughter remains in day care.

The shutdown would come at a time when the family has refinanced its home on the East Side of St. Paul, adding in the extra cost of financing a car. The first payment comes due Friday.

“When I heard the state might shut down and I may not be able to take my vacation, I cried,” she said.

Kevin Tucker, an $18.47-an-hour highway helper and a 15-year state employee, has talked to his creditors about going into arrears and paying interest penalties. He said his savings have been eaten up by state contracts that have included no pay increases in the past three years.

“I live from paycheck to paycheck,” said Tucker. “This week you get put in my jar, and I’ll pull your name in my jar and I’ll pay you. But next week I can’t put you in my jar, I’ll have to put somebody else in,” Tucker said.

Restart costs

The state estimates that, by midnight Thursday, when the shutdown is scheduled to begin, it will have spent $2 million on preparations, including staff time, shutting down computer systems and such things as the cost of putting up barriers at its 88 rest stops. The barriers were starting to go up Tuesday.

It would also cost money to reopen once a shutdown is over. At the Department of Public Safety, for instance, it is estimated that it would cost $300,000 to restart its computer systems.

In 2001, when Minnesota faced its last potential shutdown, the administration of then-Gov. Jesse Ventura prepared a report on the potential impact. It estimated that the daily lost productivity of workers would be $3.8 million a day. Preparation for a shutdown’s cost $2 million in “lost time” of workers who could have been doing something more productive.

The 2001 report also made this prediction: “The effects of a government shutdown would likely linger far into the future,” it warned, “affecting citizen’s confidence in state government.”