State shuts down amid budget wrestling

Minnesota State Roundup

Published September 1, 2005  | September 2005 issue

For the first time in Minnesota's history, the state experienced a partial shutdown of certain government services in July because the Legislature could not agree on a budget to keep state services flowing freely.

The shutdown was minor in scope—it lasted for eight days and affected only about 20 percent of nonessential state services. It put almost 9,000 workers on furlough, including those working at state health laboratories, driver's license offices and highway rest stops. Newspaper reports estimated that about 1,400 workers had no vacation time left to use during the shutdown and lost some wages.

It took the second-longest special session since 1959—seven weeks—to finally hammer out a budget agreement. When the dust settled and the sun rose on wee-hour budget negotiations that produced a $30 billion budget, there were some noteworthy items outside the nuts-and-bolts funding for existing state services. K-12 education was by far the biggest winner in terms of new spending, receiving a boost of about $800 million, including $86 million as incentive funding to encourage districts to give raises based on merit rather than seniority.

A new 75 cent "fee" will be levied on cigarettes, along with new taxes on cigars and smokeless tobacco. The measure is expected to raise $400 million in additional revenue and erase much of the $466 million state deficit originally projected for the biennium. Smokers did get one concession: a proposal for a statewide smoking ban in all bars and restaurants failed.

Lawmakers also repealed the scheduled decline of certain liquor and rental car sales taxes and introduced tighter tax compliance measures. Transit advocates won bonding approval for the Northstar commuter rail link between Big Lake and Minneapolis, with the expectation that service will eventually be extended to St. Cloud.

The state's Indian tribes survived a heavy push from the governor and legislative Republicans to allow thousands of slot machines at horse-racing Canterbury Park, which would have effectively opened the casino monopoly held by tribes. Other measures hitting the budget scrap heap included an effort to pare enrollment in MinnesotaCare (a state health insurance program for low-income Minnesotans) and stadium proposals for both the Minnesota Twins and the University of Minnesota football team.

Ronald A. Wirtz