Some noticeable casualties after Minn. shutdown

Associated Press
Rep. Keith Downey, left, talks to Rep. Branden Petersen on the house floor on Thursday night June 30, 2011 as they await the government shutdown in the capitol in St. Paul, Minn.  The Minnesota state government shutdown at 12:01 a.m. CDT Friday July 1,2011.   (AP Photo/Carlos Gonzalez/STAR TRIBUNE) -- MAGS OUT, MINNEAPOLIS AREA TV OUT, MANDATORY CREDIT --
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ST. PAUL, Minn. (AP) — Minnesota's state government is closed for business.

It shut down at 12:01 a.m. CDT Friday, the victim of an ongoing dispute over taxes and spending between Democratic Gov. Mark Dayton and Republican legislative majorities. Talks fell apart well before the deadline, leaving state parks closed on the brink of the Fourth of July weekend, putting road projects at a standstill and forcing thousands of state worker layoffs.

Even before the final failure, officials padlocked highway rest areas and state parks, herding campers out. The full impact will hit Friday morning as thousands of laid-off state employees stay home until further notice and a wide array of services are suspended.

Critical functions such as state troopers, prison guards, the courts and disaster responses will continue. On Friday morning, former Supreme Court Chief Justice Kathleen Blatz will begin the court-appointed job of sifting through appeals from groups arguing in favor of continued government funding for particular programs.

Dayton addressed the looming shutdown at about 10 p.m. Thursday, emerging after a day of fitful negotiations with legislative Republicans to say the two sides were still fundamentally divided over how much the state should spend the next two years and that the shutdown was inevitable.

"This is a night of deep sorrow for me," Dayton said.

Republican lawmakers had been gathered at the Capitol for hours as they demanded that Dayton do what he had said for months he would not do: Call a special session so they could pass a "lights on" budget bill to keep government running. The governor insisted he would only agree to a total budget solution that incorporated the many facets of state spending.

"I think the governor's insistence that we pass a full budget is not going to be of much comfort to Minnesotans who are going to see delays on the highways because construction projects stop," said Senate Majority Leader Amy Koch, R-Buffalo. "It's not going to comfort people who can't use our state parks, or who can't get a driver's license."

Officials in state parks had already started herding out campers Thursday, saying it would have been too difficult in the dead of night. Also Thursday, people rushed to get driver's and fishing licenses at offices and service centers that would be locked up by morning.

A stoppage in Minnesota will halt non-emergency road construction, shut the state zoo and Capitol, and stop child-care assistance for the poor. More than 40 state boards and agencies expect to go dark.

The shutdown in retrospect was something of a slow-motion disaster, with a new Democratic governor and new Republican legislative majorities at odds for months over how to eliminate a $5 billion state budget deficit. Dayton has been determined to raise taxes on high-earners to close the deficit, while Republicans insisted that it be closed only by cuts to state spending.

Even after the shutdown looked like a certainty, Dayton and Republicans did not soften their conflicting principles. Dayton said he campaigned and was elected on a promise not to make spending cuts to a level he called "draconian." He said he has been more flexible than Republicans in trying to compromise in order to acknowledge their principles.

"I've gone halfway, and I'm not going to go further," Dayton said.

Many Republicans have been equally firm. House Speaker Kurt Zellers, R-Maple Grove, suggested Thursday night that Dayton had other motives.

"This is about shutting down government for a political purpose," Zellers said.

Republican Sen. Michelle Benson said earlier in the day she wouldn't budge on raising taxes or new revenue in any form.

"If we don't start taking a different approach to how we manage our government, we're going to swing from one bad economic circumstance to another," Benson said. "We can't just keep throwing more money at government and hoping that makes things better."

Dayton has proposed raising taxes on couples earning more than $300,000 and individuals making more than $180,000. He said Thursday night that he had offered to target the tax increase to even higher earners, those making more than $1 million a year.

Republicans have opposed any new taxes or new revenue sources, arguing instead that the state should rely on spending cuts, including deeper reductions in health and welfare spending than Dayton is willing to accept.

Some GOP moderates have talked of breaking the impasse with other means of raising revenue, such as eliminating tax breaks or authorizing a casino. Dayton has said he is open to such ideas.

After budget talks broke down Thursday night, neither Dayton nor Republicans gave any immediate indication of when or in what fashion they might continue.

Lawmakers faced the prospect of spending the holiday weekend at parades and events in their district, facing a public who can point to an oversized symbol of gridlock at the state Capitol. Some admitted that Dayton might have the upper hand politically.

"I personally think the Republicans will probably be more damaged than the governor" by the shutdown, said freshman Rep. Mike LeMieur, R-Little Falls, who toppled an incumbent Democrat in November. "The fact is that we're all up for re-election again next year, and he's not up for three years."

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