Friday, July 1, 2011

Government Shutdown

Minnesota State Government shutdown today, July 1, as a result of no state budget being in place before the beginning of the new biennial budget cycle.  Legislative leaders have been meeting with the Governor and his staff under a “cone of silence” since the regular legislative session adjourned at the end of May.  Until an agreement can be reached between the Executive and Legislative branches, the focus has now shifted to the Courts to determine what the actual impact of the shutdown will be.

Just prior to the shutdown, Ramsey County Judge Gearin issued her ruling on what government services will continue, and has appointed former Supreme Court Justice Kathleen Blatz as the Special Master to hear petitions and make recommendations to the Court to clarify any remaining questions as to what should, or should not be funded.  The hearings will continue through Tuesday, July 5, until all petitioners are heard.  If necessary, emergency issues may be considered over the July 4th Holiday weekend.

In her ruling, Judge Gearin construed her power to order government spending narrowly and largely adopted Governor Mark Dayton’s proposed list of critical services.

The first major category of services covered in Judge Gearin’s order are those programs that are covered under agreements between Minnesota and the Federal Government. These programs are:

  • Medical Assistance; 
  • Supplemental Nutrition Assistance Program; and 
  • Temporary Assistance to Needy Families.

Judge Gearin ruled that the continuation of these programs is necessary to “ensure the health, safety and welfare of Minnesota citizens.” The second broad category of services covered includes programs considered core services under the Minnesota and United States Constitutions. These include:

  • Basic custodial care for residents of state correctional facilities, regional treatment centers, nursing homes, veterans’ homes, and residential academies and other similar state-operated services 
  • Maintenance of public safety and immediate public health concerns 
  • Provision of benefit payments and medical services to individuals 
  • Preservation of the essential elements of the financial systems of the government 
  • Necessary administration and supportive services, including but not limited to computer system maintenance, internet security, issuance of payments 
  • Payments of state aid to cities that have been lawfully appropriated 
  • Funding for education required by the Minnesota Constitution 
  • The care of animals at the Minnesota Zoo and preserving the safety and security of zoo property

How Did We Get Here

When the 2011 Minnesota legislative session began in January, it did so with 60 new freshmen members of the Legislature, 54 of them Republicans, and a new Democrat Governor Mark Dayton.  This is a complete reversal of the political landscape that existed prior to the November elections when the Democrats were in charge of both legislative bodies and the Governor’s office was held by Republican Tim Pawlenty.  For the first time in almost four decades, the Senate is now made up of a majority of Republicans, as is the Minnesota House of Representatives.  It is also the first time since 1991 that a Democrat has been in charge of the Executive Branch.

The first day of session was one of quiet chaos as new members tried to navigate the Capitol complex and new leadership was elected by all four caucuses.  It quickly became apparent that the Governor and the new legislative majorities have polar opposite philosophies on how to best deal with the State’s significant budget deficit.  Even though the February Budget forecast offered some positive news and the deficit shrunk by over a billion dollars, the projected budget shortfall for the next biennium still remained at just over $5 billion.

The session started at a slower pace than in sessions past with bill introductions noticeably lagging. The new majority not only changed the tempo of the session, but also the traditional timelines at the Capitol. The theory behind the change was that, instead of discussing policy matters first and pushing tough budget decisions until the very end of the session as in the past, fiscal matters should be discussed first and then time could be spent talking about policy matters.  Ultimately, the change made little difference.

The Governor said he would not accept a piecemeal budget and wanted an agreed upon global solution to the State’s financial woes.  Additionally, the Governor insisted that some type of new revenue would be necessary in order for him to sign a budget deal.  After completing “draft” conference committee reports, the Legislature posted their bills on the legislative website in an effort to receive feedback from the Governor.  This new spin on negotiating was interesting but ultimately unsuccessful as the Governor gave feedback only in the form of his own budget proposal and ultimately vetoed the omnibus appropriations bills passed by the Legislature. The only omnibus finance bill to get the Governor’s signature was the Omnibus Agriculture Bill.  Agriculture is a small piece of the overall budget and the initial proposals from the Governor and the Legislature were very similar and relatively easy to reach agreement.

As budget negotiations and policy discussions limped along towards the end of session, a major social issue took center stage.  A ballot question to amend the State Constitution to define marriage as between one man and one woman passed relatively quietly in the Senate, but received days of vocal protests in the House.  The bill eventually passed the House floor with four Republicans voting against it and two Democrats voting yes on an otherwise party-line vote.  The question will now be on the ballot in 2012.  The Legislature was unable to pass most of the omnibus policy bills off their respective floors before the constitutionally required deadline for adjournment on May 23, and the perennial issue of whether the Vikings will get a new stadium was also left unanswered.

Whether because of a tight State budget or a single desire to control growth in State government, the number of bills actually passed this session was less than half the number that usually pass in a budget session.  In total, the Legislature sent 117 bills to the Governor of which he vetoed 24.  According to the Governor’s staff, this marks the lowest number of bills enacted in any legislative session since 1864.

Only Governor Dayton has the power to call the Legislature back into Special Session, and he can do so at any time.  However, the Governor has indicated he will not call a Special Session until there is budget agreement with legislative leaders.  Republicans proposed a budget for the next biennium of approximately $34 billion while the Governor, who initially proposed a $37.3 billion budget, offered a compromise proposal at $35.8 billion.  Governor Dayton announced that he is willing to cut his proposed tax increase by half if the Republicans are willing to entertain some type of new revenue. The Republicans argue that they have already compromised as much as they can and have moved significantly from the $32 billion budget many of them campaigned on as a fiscal ceiling.  Various interest groups are currently running print and television ads in support/opposition to the Governor and Legislature’s plans.  The two sides continue to meet, but to date, no significant progress has been made.