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Minnesota government shutdown likely at an end

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July 11, 2011

Minnesota

By David Godow

St. Paul, Minnesota:

Minnesota's two week-old government shutdown appeared headed for an uneasy conclusion today, with a final deal expected as soon as Monday. According to details publicized Thursday, both the Republican-controlled legislature and Democratic Governor Mark Dayton had to make substantial compromises. Dayton, who campaigned on tax increases for the state's highest earners, was forced to back down, while Republican legislators agreed to give up new restrictions on abortion, a requirement to show photo ID to vote, and their attempt to gradually cut the state's workforce by 15 percent.

Left-leaning commentators groused that the deal represented a profound defeat for Dayton, who, some argued, turned his back on his campaign promises to extract new revenues from the rich in exchange for... not much. "Nonprofit jim" at the liberal blog Daily Kos argued that it was "very hard to find much silver lining in this one."[1] By contrast, Dayton insisted on Minnesota Public Radio that he "got the budget level [he] wanted."[2] He also pointed to the survival of a $500 million construction bond proposal as a win that would create private sector jobs.

Conservative commentators, by contrast, were jubilant. In a reaction boldly titled "GOP Wins Minnesota Shutdown Fight," Daniel Foster of the conservative National Review suggested that Minnesota Dems' failure to raise taxes paralleled the taste for austerity liberals in New Jersey and New York showed in their own budgets.[3]

Even as the current budget battle draws to a close, commentators have already begun warning of flaws in the nascent compromise. According to the Minnesota Budget Project, a non-profit analysis group, the plan is, at best, a Band-Aid to keep the state in business in the current fiscal year.[4] The plan relies heavily on deferring $1.4 billion owed to the state's public schools and borrowing against future revenues expected from the 1998 settlement with tobacco manufacturers. Thus, the state's next biennial budget will need to account for $2.1 billion for the schools and interest payments on the $700 million borrowed against tobacco money.

Where that money will come from, given the failure of Minnesota's government to agree on long-term revenue or spending changes today, is anyone's guess.

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