Shutdown Roundup: July 1 and Beyond in Minnesota Budget Stalemate

Updated July 9, 8:27 p.m.: Ramsey County District Court Judge Kathleen Gearin on Friday capped off the first full week of the government shutdown with three new rulings on petitions heard by Special Master Kathleen Blatz.

A retired Chief Justice of the Minnesota Supreme Court, Blatz was chosen by Gearin on June 29 to hear and make recommendations on petitions for additional funding from organizations not deemed “core critical” during the government shutdown.

A petition from the Minnesota State Retirement System regarding continuous payments for elective state officers was granted.

A petition filed by the Minnesota Historical Society (MHS) was also granted. The MHS petition requested additional funding for protection of property and technology as well as funds to feed animals at the Oliver H. Kelley Farm historical site.

The petition from seven detectives of the Department of Commerce Insurance Fraud division was denied.

Gearin's ruling stated that "having some law enforcement officers is a core function, the Court does not have the authority to determine how many and what areas of enforcement should be covered."  

Since June 30, more than 50 organizations have petitioned for funding and as of July 9, 12 have received an answer.

Gearin ruled on petitions from Canterbury Park, the Minnesota Harness Racing Association and the Minnesota Zoo on July 2 and issued six decisions on.
There is no guarantee any additional funding will be granted or petitions approved. Special Master Blatz will resume hearing petitions on Monday.

Petitions Approved

• Minnesota Historical Society (July 8)
• Minnesota State Retirement System (July 8)
• Southern Minnesota Regional Legal Services (July 7)
• Blind Inc. (July 7)
• Minnesota School Board Association (July 7)
• Intermediate School Districts (July 7)
• Minnesota Department of Human Services - Licensing Division (July 7)
• Minnesota Zoological Garden (July 2)

Petitions Denied

• Detectives of the Dept of Commerce Insurance Fraud Division (July 8)
• The Arc Minnesota (July 7)
• Canterbury Park (July 2)
• Minnesota Harness Racing (July 2)

Update July 6, 5:15 p.m.: Just when it seemed like there would be no further room for compromise in state budget negotiations, Gov. Mark Dayton made two proposals Wednesday. He offered to increase the cigarette tax by $1 per pack or create a two percent income tax surcharge for the 7,700 Minnesotans who make more than $1 million annually.

But rather than move the talks forward toward ending the state government shutdown, Republican leaders told reporters assembled outside the governor’s office that “things went backwards today.”

Dayton met with GOP leadership Wednesday afternoon to try to break a budget impasse that has lasted six days. A $1.4 billion gap remains. Wednesday’s meeting broke after just 30 minutes.

Speaking to reporters after the meeting, Dayton said Republican leaders rejected all of his offers.

“If it was a step backwards, it was their step backwards,” he said. “I took a step forward. I offered two serious options.”

The GOP leadership and Dayton also discussed the option of using gambling revenue to narrow Minnesota’s $5 billion deficit but, according to Dayton, Republicans don’t have support within their caucus to pass a bill. Other options on the table include $300 million in annual healthcare surcharges and delayed payments for K-12 education.

No word was given on when the governor and GOP leaders would meet again.

Update July 5, 7:30 p.m.: Day Five of the Minnesota state government shutdown produced little progress toward resolution. Gov. Mark Dayton and GOP lawmakers met for the first time since the parties called for “a breather” last week.

At odds are a $1.7 billion difference between the budgets proposed for biennium 2011-13 and, more specifically, how to close it.   

Republican leaders on Tuesday again asked Dayton to call a special legislative session to pass a lights-on bill that would provide temporary funding and allow the state government to resume operations for an additional 10 days.

“The shutdown was unnecessary,” Senate Majority leader Amy Koch (R-Buffalo) told reporters assembled outside the governor’s office. “We want the parks open and construction going.”

But while Dayton called the talks “constructive” and said he would consider “anything” to achieve progress, his stance on the lights-on bill remained unchanged. With Republicans sticking to its $34 billion-dollar budget, Dayton said, he isn’t hopeful.

“We have the same gulf between us that we have always had,” Dayton said Tuesday.

Owing to the complexity and size of the K-12 Education and Health and Human Services bills, Dayton said they would receive special scrutiny this Wednesday and Thursday.

Dayton said he reached out over the weekend to a handful of moderate Republicans, but wouldn’t divulge which legislators he contacted, to break the budget impasse.

The parties are scheduled to meet again Wednesday afternoon in the governor’s office.

Update July 5, 12:25 p.m.: Some of Minnesota’s brightest political minds have put together a bipartisan committee tasked with devising a solution to the state’s $1.7 billion budget gap and ending the state shutdown.

The committee, which will begin its work as early as Wednesday, was created by former Minnesota politicians Vice President Walter Mondale, Gov. Arne Carlson and U.S. Sen. Dave Durenberger.

“We were trying to find people with superb professional backgrounds and exemplary roles in impartial public leadership,” Mondale told reporters Tuesday morning at Minneapolis City Hall.

Members of the committee include:

• Steve Dille; Co-chair (former GOP state senator)
• Wayne Simoneau; Co-chair (former DFL state legislator)
• John Gunyou (city manager of Minnetonka)
• Jay Kiedrowski (former Finance commissioner under Gov. Rudy Perpich)
• Jim Campbell (former CEO of Wells Fargo)
• Kris Johnson (former vice president of Medtronic)
• Jim Schowalter (current Minnesota Management and Budget commissioner)

“This is as good a group as could have been assembled," Carlson said. "With John Gunyou and Jay Kiedrowski, in particular, we certainly have two of the best finance people in Minnesota history, as far as I’m concerned."

Carlson and Mondale each stressed the importance of finding a quick solution to the budget impasse—both for the state and people of Minnesota.

“Our fear is that large sums of money, large interests will come into Minnesota and cause a freezing of attitude and make it very difficult for compromise to become a reality,” Carlson said.

Mondale added: “We understand that thousands of people depend on Minnesota’s ability to resolve this crisis quickly.”

Neither Mondale nor Carlson will serve on the committee. Their role was one of creation and sponsorship.   

“We’re not in this to negotiate,” Carlson said. “We’re in this to provide a third alternative. I would anticipate the ultimate support of both parties.”  

Carlson said he expects the committee to come up with a workable solution no later than Friday. Whether legislators and the governor will heed any recommendations offered from the group is an open question.

Update July 2, 7 p.m.: Ramsey County District Court Judge Kathleen Gearin ruled Saturday afternoon that the Minnesota Zoo can remain operational during Minnesota’s government shutdown.

She also ruled, however, that Shakopee’s Canterbury Park and Forest Lake’s Running Aces may not operate until the state’s budget debate is resolved.  

In her zoo decision, Gearin used a standing appropriations rule to determine that fees garnered from parking, concessions, admissions, donations and memberships should be returned to the Apple Valley facility.

Gearin’s ruling read: “The statutes regarding zoo special revenue funds do not appear to the court to require a decision by the legislature before they can be appropriated.”

The zoo is scheduled to reopen to the public at 9 a.m. Sunday.

The Minnesota Zoo receives approximately 29 percent of its revenue from the state and—because it was deemed non-essential in Gearin’s June 29 ruling—those funds will be unavailable for the duration of the shutdown.

Gearin’s ruling on the ponies went the other way.

On Saturday afternoon, she denied petitions from Shakopee’s Canterbury Park and Forest Lake’s Running Aces harness racing track, saying the Minnesota Racing Commission must request state funding. Without a biennial budget in place, no requests for funding can be made.

Like the zoo, neither track was considered an essential function in Gearin’s June 29 ruling.  

In contrast, Gearin said she ruled in favor of the zoo because she “was unable to find any bills from the 87th legislative session” dealing with appropriations to that facility.   

According to the Star Tribune, Canterbury Park laid off 1,000 employees in the lead-up to the July 1 government shutdown while Running Aces laid off 600 workers.

Update July 2 12:15 p.m.: The Minnesota Judicial Center and the Ramsey County District Courthouse are closed until July 5, security officers at both facilities confirmed Saturday.

Rulings on the 22 petitions for funding heard on July 1—including the Minnesota Zoo, Minnesota Coalition of Battered Women, Minnesota Coalition Against Sexual Assault and Canterbury Park—may come over the weekend but Special Master Kathleen Blatz will not hear any new appeals until after the holiday.

But nonprofit organizations seeking to join the queue are in luck, because petitions for funding will continue to be received and processed through the holiday weekend.

Update July 1, 6:07 p.m.: There hasn't yet been a ruling on the petition for the Minnesota Zoo to reopen during the government shutdown, but zoo attorney Mike Hatch and Gov. Mark Dayton's attorney David Lillehaug on Friday afternoon presented arguments for and against, in front of Ramsey County Judge Kathleen Gearin.

“I know you aren’t going to have a zoo today," Gearin said at the end of the Friday hearing, saying she would take the arguments under advisement. "It may have to be tomorrow.”

A replay of the hearing, and court documents filed, are available on TheUptake's website.

Update July 1, 4:35 p.m.: Gov. Mark Dayton told MPR News Friday that budget negotiations between himself and GOP lawmakers need a “breather.”

The governor said he is willing to listen to proposals and even meet with Republican leaders over the weekend but if no offers were made he would “reach out” to them sometime on Tuesday, July 5.

The governor met with DFL leaders this morning around 9 a.m. but details of the talks are being kept strictly confidential. According to KSTP-TV, Dayton has been in his office all day working on a compromise deal.

After weeks of intense negotiations, capped by closed-door sessions through the waning minutes of June 30, Dayton and Republican lawmakers failed to agree on an operating budget for the coming biennium.

The proposed budgets from the governor and GOP lawmakers remain separated by $1.4 billion.  

Update July 1: Special Master Minnesota Supreme Court Justice Kathleen Blatz at 8 a.m. Friday began hearing petitions from a bevy of Minnesota’s nonprofit organizations requesting shutdown funding.

The organizations were not included in the initial ruling of critical core services written by Ramsey County District Court Judge Kathleen Gearin on June 29.  

Blatz heard appeals this morning from organizations as varied as the Minnesota Aids Project, Partners for Affordable Housing and the Minnesota coalitions for battered women (MCBW) and the homeless.   

The entire court docket can be found here and live streaming of the hearings is also available.

Blatz will not rule on any of the petitions she hears today. Instead she will consider the arguments made and the degree of authority she was given to expand the list of critical core services.

Blatz is expected to begin ruling on the petitions as early as Saturday, July 2.