End in Sight? Gov. Mark Dayton Agrees to Republican Budget Offer, with Conditions

Gov. Mark Dayton has “reluctantly" agreed to the last Republican budget offer made on June 30 with conditions—a move that could end the state shutdown if Republicans agree.

That offer generates $700 million dollars through further school aid shifts, and issues $700 million in “tobacco bonds” to cover the rest of the $1.4 billion gap between the governor and state Republicans.

Further school shifts would force School District 622 to borrow $10 million to $12 million in January said Director of Business Services Dale Sundstrom. Interest on the borrowing could cost district taxpayers about $50,000, he said.

The proposal includes a $50 per pupil state funding increase to offset borrowing costs.

The last time the district had to borrow money was in the 2006-2007 school year, he said.

“It’s just hard for school districts to plan properly when we have this kind of a legislative situation,” Sundstrom said.

Sen. Chuck Wiger, who represents Oakdale in the state senate, said he disagrees with points of the compromise agreement, but he’ll support it if it means an end to the Minnesota government shutdown.

“We have to end this shutdown it’s gone way too far,” Wiger said. “It’s a very unpleasant compromise, but we’ve got to move on in our state.”

The governor shared similar sentiments in a letter to Senate Majority Leader Amy Koch and Speaker of the House Kurt Zellers, which he talked about in a speech before alumni at the University of Minnesota’s Hubert H. Humphrey Institute of Public Affairs, the governor read a letter he sent to House Majority Leader Amy Koch and House Speaker Kurt Zellers.

“During the past two weeks, I have been listening carefully to people throughout Minnesota … they want this budget dispute resolved. While they strongly prefer my proposed solution to that of the Republican legislature … they want this government shutdown to end. Now.”

To that end, Dayton agreed to the GOP offer of June 30. Details of that offer include:

• Shift school aid payments from 70/30 to 60/40 ($700 million)
• Issue tobacco bonds to cover remaining gap (to be determined)
• Increase per student formula by $50 per year to cover additional borrowing costs ($128 million)
• Add $10 million to University of Minnesota to equalize reductions with MnSCU ($60 million)
• Restore funding to Department of Human Rights and Trade Office

But the GOP, Dayton said, would have to abide by three conditions: 1) Take all policy issues off the table for the time being; 2) drop a 15 percent, across-the-board reduction in the number of employees at all agencies, regardless of their funding source; 3) after all the budget issues have been resolved in a special session, the GOP must support and pass a bonding bill of at least $500 million next session.

At the time of writing, there was no response from GOP leaders.

“I’ve had no response for two weeks and no other proposals (from the GOP). This is the only viable option to get the state government operating again ... a lot of Minnesotans just want (the shutdown) resolved and frankly don’t care how,” Dayton told the crowd.  

Echoing the sentiments of several in the crowd, Larry Jacobs, Humphrey Institute politics-center director asked Dayton, “We’re two weeks into a government shutdown. You’re now willing to accept a deal that would have prevented the shutdown altogether. Are you now capitulating to GOP demands?”

Dayton’s response: “In my 36 years of government I’ve never seen intractability and unwillingness to compromise be used as a strength. When you’re negotiating with a position that is intractable, you cannot negotiate. I’m disappointed that we can’t do it better but there is still time for Republicans to make it better.”  

Dayton reiterated that his decision to accept the GOP proposal, while he does not agree with it, was made by striving for the moral high ground.   

“I believe this is the right thing to do. More and more Minnesotans want (the shutdown) over. They need it over. I did what I thought was in the best interest of the people of this state. In the real world, for the foreseeable future, this is what would end the shutdown.”