Capitol Watch: The politics of shutdown

The last shutdown of state government was in 2011 with Republicans controlling both the House and Senate and Mark Dayton in the governor’s office. The major sticking point was whether or not to raise taxes to solve a $5 billion budget deficit. Dayton’s campaign promises to “tax the rich” and grow the ranks of public employee unions clashed with the Republicans’ “no new taxes” mantra. They were stuck.

Three weeks into the July 2011 government shutdown, Dayton relented and agreed to a budget that did not raise taxes. But not until exacting maximum political pain from his opponents. Dayton’s ultimate goal was to win majorities in the House and Senate so he could freely enact his agenda. He used the government shutdown against the legislature and won huge victories in the 2012 election. Among the many liberal legislative victories in 2013 was the creation of a new top tier in the income tax. In other words, Dayton got the last laugh.

It is very hard for the legislature to win the politics of a government shutdown. Governors control the mechanics of the shutdown and use their bully pulpit to communicate how painful it will be to the citizenry. Walz mailed layoff notices this week to thousands of state government employees and the press is always eager to write about state parks and rest areas closing right before Minnesota celebrates the Fourth of July. All because the do-nothing legislature failed to pass a budget on time.

The stakes are higher in 2021 because the state Supreme Court went out of its way in a 2017 decision to warn the executive and legislative branches of government that if they fail to pass a budget by July 1, the courts will not bail them out with extrajudicial spending. In the 2011 shutdown, almost 70 percent of state government received funding after a special master appointed by the court issued a list of “essential services.” Turned out most of state government was essential in 2011, relieving pressure on the negotiations. That will not happen this year, assuming Chief Justice Lori Gildea gets her way.

The remaining sticking points

The list of open items in the negotiations really hasn’t changed since the end of the regular session in May.

Taxes and spending

Walz and legislative leaders already agreed to spend $52 billion on the next budget without raising any new taxes. Taxes will not be collected on PPP loans and unemployment income, but otherwise rates will remain the same across the board. Individual committees are slowly reconciling their differences on the details of the state budget.

Education policy

They already agreed to spend more on K-12 education including additional funding for Walz’s summer school initiative. Senate Republicans are holding out for education savings accounts, allowing the funding to follow the students based on their parental choice. A press conference last week called attention to this initiative.

California emissions standards

The Walz administration continues to insist on enacting new emissions standards through administrative rule instead of legislative action. A compromise might include funding for electric car charging stations around the state in exchange for dropping the rule making process.

Police reform

House Democrats continue to ignore what’s happening in Minneapolis and St. Paul, pushing a “police reform” agenda that weakens law enforcement while kids are being killed by stray bullets on trampolines in their backyards. Click here to Support Minnesota Police.

Emergency Powers

Senate and House Republicans continue to press Gov. Walz on when he will relinquish his emergency powers, with Walz showing no signs of retreat. The governor claims getting rid of them would “slow down vaccination, jeopardize hundreds of millions of dollars in hunger relief and end the eviction moratorium overnight with no plan to provide an off-ramp.” It’s hard to believe the state couldn’t accomplish those things without “emergency” powers.

Prediction

With less than one month until the July 1 deadline for a budget, the most likely scenario has the leaders agreeing to budget numbers without agreement on any of the policy items listed above. That means no education reform, California emissions standards continue, no police reform, emergency powers continue.   

This piece originally appeared in our Capitol Watch newsletter. Sign up below to receive the weekly newsletter.