Tick … tick … tick talk … talk … talk

06/30/2005

Patricia Lopez and Dane Smith,
Star Tribune
July 1, 2005

As the final hours dwindled away in the state’s two-year fiscal period, Gov. Tim Pawlenty took his proposal for a racino off the negotiating table and differences have narrowed on spending plans, but it remained unclear whether Minnesota could avoid its first budget-induced government shutdown.

“The governor holds out a small sliver of hope that this deal could be struck today,” said Brian McClung, Pawlenty’s press secretary. The House and Senate could then craft a “continuing resolution” that would keep state services operating until a handshake deal was formally processed, he said.

As legislative leaders went into a late-night meeting with Pawlenty, Senate Majority Leader Dean Johnson said that “this could be a good night” and that a deal shortly before midnight, when the existing budget expires, “is possible.” Pawlenty also expressed optimism.

Jamay Geiger and her dogs head for a state park.Richard Tsong -taatariiStar TribuneJust before the latest round of talks, the DFL-led Senate passed a bill that would continue virtually all existing appropriations until a new budget deal was reached. Republicans have said they would oppose such a bill unless they had agreement on a 2006-07 budget.

Should talks fail and no continuation funding is passed, state parks would remain open.

Earlier in the day both houses of the Legislature overwhelmingly passed an agriculture, environment and economic development bill that includes the parks appropriation. Pawlenty said he would sign it.

McClung said the racino proposal, which would have put slot machines at Canterbury Park racetrack, was withdrawn during a 7:30 a.m. meeting among Pawlenty and the four caucus leaders produced some movement.

Senate Majority Leader Dean Johnson, DFL-Willmar, called the withdrawal of the racino “very significant.”

“I’m sure it will be around for another day,” Johnson said, “but not for the last days of a special session.”

DFLers have opposed the racino from the beginning, but without the $218 million it would have netted the state, Pawlenty also cut his health care offer down a bit, prompting a show of outrage by House Minority Leader Matt Entenza.

“Their new proposal cuts eligibility and benefits,” the St. Paul DFLer said. “They’re going in the wrong direction.”

Dysfunction, disgust

In an attempt to prevent temporary layoffs and disruption of services, the Senate’s “lights-on” bill would continue the still unfunded state programs at current levels indefinitely. But Republicans and Pawlenty argued that it would remove pressure to reach agreement. Minority Leader Dick Day, R-Owatonna, called the lights-on proposal a “weasel way” to fund government and Senate Republicans tried but failed to amend the bill with a 30-day lights-on period.

As the day wore on, legislators were expressing disappointment and even disgust over a legislative session that produced some early results but ended up missing its regular session deadline, and then failed to enact the necessary appropriations bill before the end of the budget period. It’s become a chronic problem in recent years. In 2004, an unprecedented deadlock prevented the Legislature from producing any budget adjustments at all and it generally was considered the least productive session in history.

“The Great Ugliness of 2005,” was how Sen. Julianne Ortman, R-Chanhassen, labeled the current production. “It’s devastating, it’s embarrassing and it will haunt us for many years to come,” Ortman said, referring to the fact that a “special master” appointed by a district court judge has set up office in a corner of the Capitol and is making funding decisions because of legislative failure.

Reforms, tighter belts

Pawlenty dropped his request of Wednesday that DFLers choose from among a long list of “reforms,” that included everything from a ban on school-year teacher strikes to a unicameral legislature.

Instead, he focused on a policy change that would give individuals a tax credit for donating up to $1,000 to scholarships that would allow low-income children to attend private schools.

“We think that’s reasonable,” McClung said. “The governor has said all along this should not just be about money and how much we can spend.”

On health care, he said, Pawlenty’s offer would increase annual outpatient benefits for MinnesotaCare to $7,500, from $5,000.

With racino profits, Pawlenty had offered to bump that ceiling up to $10,000 and keep eligibility for the state-subsidized health insurance program at current levels.

The latest offer would cut eligibility to 100 percent of federal poverty guidelines for childless adults and 200 percent of poverty for adults with children. That’s less than the current 175 percent and 225 percent, respectively, but still more generous than Pawlenty’s original proposal, which would have barred childless adults from the program altogether and limited adults with children to 190 percent of poverty.

McClung said administration officials were attempting to determine how many people would lose insurance at the newly proposed levels. Estimates for Pawlenty’s original budget ranged from 22,000 to 40,000.

Senate leaders countered by maintaining the need for 275 percent above poverty for parents and 175 percent above poverty for adults without children.

In addition, the Senate offer continues to want to lift the outpatient benefits cap for MinnesotaCare.

Senate leaders say they have come down $351 million on the human services budget and now have no dollar difference with the governor’s proposal. Overall, there remains about a $150 million difference in a $30 billion biennial budget, Johnson said.

Shutdown threat

Both sides said they would continue talking and remained hopeful that even a partial shutdown could be avoided.

Without an agreement, some parts of state government will close starting Friday and thousands of vendors who furnish government services will find their contracts suspended.

The spending bill that will keep state parks open also will keep Minnesota’s 50 workforce centers operating at full speed Friday. The jobs and economic development bill funds not just the workforce centers, but the training programs that had been jeopardized by a shutdown.

Passage of the bill means that training programs for dislocated workers, welfare recipients, injured workers and the blind will stay on track.

“This is great news,” said Manny Garcia, who oversees the north Minneapolis workforce center, which was scrambling to find non-state staff to operate it’s resource room and other services. “We’ve been working like dogs this week to try to keep the place open.”

But even with passage of the bill, an estimated 9,000 state employees could still find themselves temporarily out of work.

Casino conflict

The withdrawal of the racino proposal was the latest setback for Pawlenty in his effort to create a casino that would share revenue with the state and poor Indian tribes. Earlier this year, another of his casino proposals failed to advance in the legislature. Two of the tribes that participated in that deal declined to join in a partnership with Canterbury and the state, and a third band, the White Earth Chippewa, was noncommittal this week.

White Earth tribal leader Erma Vizenor said she hasn’t talked to the governor about his decision to pull the racino proposal, but cited strong opposition from wealthier tribes protecting their casinos from competition as a factor.

“The opposition we’ve been facing for years—money is the bottom line, to control the monopoly “ Vizenor said, referring to lobbying and campaign contributions by wealthier tribes. “There’s a lot of money that goes into controlling gaming, in terms of political influence. We have been the big underdog here.”

Legislators have been meeting in special session since May 23, when they ended a nearly six-month regular session without an agreement on a 2006-07 budget package.