Minnesota governor proposes end to shutdown – but will Republicans bite?

Gov. Mark Dayton (D) is telling Republican leaders he will accept a Republican budget plan, but with conditions. The climate in Minnesota could hold lessons for the debt talks in Washington.

Minnesota Gov. Mark Dayton (D) is telling Republican leaders he will “reluctantly” concede to offers they first made two weeks ago to solve the $5 billion budget deficit and, as a result, end the state government shutdown, which is now the longest in US history. But the budget battle may not be over yet.

In a letter sent Thursday to House Speaker Kurt Zellers and Senate majority leader Amy Koch, both Republicans, Governor Dayton said he made his decision not because he agreed with the Republican plan, but primarily to end the shutdown. The GOP plan includes increasing the amount of deferred school payments and borrowing from future tobacco settlement payments, the combination of which will drive down the deficit by $1.4 billion.

“Despite my serious reservations about your plan, I have concluded that continuing the state government shutdown would be even more destructive for too many Minnesotans,” the governor wrote. “Therefore, I am willing to agree to something I do not agree with – your proposal – in order to spare our citizens and our state from further damage.”

Dayton’s letter, however, came with conditions. He outlined three proposals that he said he wanted Republicans to approve: a construction projects bill totaling $500 million, the removal from the budget bill of all policy changes on social issues, and the elimination of a 15 percent cut for state workers.

Dayton and the state’s Republican leaders agreed to meet Thursday afternoon to discuss the letter.

Republicans have not declared victory yet, which is evidence of the contentious relationship between the executive and legislative branches in the state. Tensions have only heightened since the arrival of the GOP’s freshmen class of lawmakers, the majority of whom have the backing of the tea party.

Since the government shut down two weeks ago, both parties have managed to get together only twice to discuss compromise proposals offered by Dayton. Republicans rejected both offers, which could signal that they don’t view a government shutdown as necessarily a bad thing.

“This is a prototypical tea party moment,” says Steve Perry, managing editor of Politics in Minnesota in St. Paul. “A government shutdown isn’t a loss; it’s a win. For them, bringing the beast to its knees is a triumph.”

A similar perspective could also be a factor in Washington, as President Obama and lawmakers take part in tense talks ahead Aug. 2 – when the United States could default on its debt obligations unless steps are taken.

In Minnesota, the previous rejections of Dayton’s proposals could be a sign that GOP hard-liners may not be satisfied unless Dayton accepts the original Republican offer, without any additional proposals of his own.

“You’ve got these Republican Party elements who define everything in terms of staying right with their base,” Mr. Perry says. “We’ll see how that plays in a general election, but for now, that’s the only thing on the radar.”

Some state Republicans were indeed wary about Dayton’s overture Thursday. In a Twitter message late Thursday morning, Sen. Dave Thompson (R) wrote, “Let's be clear. Governor did NOT ‘accept’ the June 30 offer. He has simply attached new conditions to the June 30 framework.”

State Sen. Gretchen Hoffman (R) told Minnesota Public Radio she was optimistic the two parties can reach an agreement to end the shutdown, but she warned that her party was not yet prepared to “kick the can down the road.”

The Minnesota state government is now in its 14th day of shutdown. Court-mandated funding is allowing some services to continue as needed, but critics warn that if the shutdown continues through the summer, the state’s financial crisis will worsen and jobs will be cut.

Dayton’s compromise proposals in the past two weeks included a $1-per-pack tobacco tax and healthcare surcharges. He also proposed a temporary income-tax increase for those 7,700 Minnesotans making more than $1 million annually, which he said would generate an additional $500 million to $700 million over two years.