Minn. State Workers Angry There's No Budget Deal

Minnesota's government has had been shutdown for nearly a week. There continues to be a standoff over taxes and spending between the Democratic governor and the Republicans who control the state's legislature. Hundreds of laid off state workers rallied at the steps of the state Capitol Wednesday.

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RENEE MONTAGNE, host:

It's MORNING EDITION, from NPR News. I'm Renee Montagne.

And it's the seventh day with no end in sight on the government shutdown in Minnesota. The Democratic Governor Mark Dayton and the Republicans who control the legislature still appear to be far apart on a budget deal. Laid off state workers are growing increasingly angry.

(Soundbite of chanting)

Unidentified Group: No budget, no peace. No budget, no peace. No budget, no peace.

MONTAGNE: Hundreds of those workers rallied on the steps of the state capitol yesterday.

To bring us up date, NPR's David Schaper with us from St. Paul.

Good morning.

DAVID SCHAPER: Good morning, Renee.

MONTAGNE: So David, what is the hold up to a deal?

SCHAPER: Well, the Republican majority in the legislature and the Democratic Governor Mark Dayton remain roughly about a billion or $2 billion apart over how much they think the state should spend on government's operations over the next two years.

Governor Dayton wants to raise income taxes on the wealthiest Minnesotans -those earning more than a million dollars a year - to balance the budget, but the Republicans refuse to consider any sort of tax increase. They passed a budget that deeply cut spending on social services and other programs. The governor refuses to sign that budget. So in negotiations yesterday, the governor made two compromise offers, one which would make his income tax increase on millionaires temporary for just two years, and he offered to increase taxes on tobacco.

Here's Republican House Speaker Kurt Zellers' reaction to those offers.

State Representative KIRT ZELLERS (Republican, Minnesota): It was very disappointing and a step backwards. Again, we're back at income taxes. We now have, as another offer, increase by a dollar a pack on cigarettes. We've made it very clear that we do not believe we need a tax increase to balance our budget.

SCHAPER: And then Democratic Governor Mark Dayton fired right back.

Governor MARK DAYTON (Democrat, Minnesota): If this was a step backwards, as I was told someone said, then they took the step backward. I took a step forward to try to resolve this. I said if we can come to this agreement, I'll call a special session as early as tomorrow night.

SCHAPER: And so the standoff in the Minnesota state government shutdown continues.

MONTAGNE: The shutdown, of course, affects people everywhere in Minnesota. But state workers are certainly feeling the impact because they're not getting paid. Tell us more about how they're responding.

SCHAPER: Well, many state workers, obviously, are very upset. Several hundred of them took their anger to the steps of the Minnesota State Capitol under a hot, late-afternoon sun yesterday. This was a rally organized by the two largest state government employee unions. They do back the governor's call for higher taxes on the wealthy. And many of the laid-off state workers that I talked to said they're willing to stay off their jobs a little bit longer if that's what it takes, because what they fear is that the budget cuts imposed by Republicans would lead to some permanent job cuts, or else it would critically hurt the state services that they work hard to provide.

There are some, though, that I talked to that are noticeably anxious that this could go on and on while they have mouths to feed and bills to pay, and they're urgently seeking a compromise soon.

MONTAGNE: Although, David, the state does have to pay the unemployment benefits for thousands of laid-off government employees. How much is this shutdown costing Minnesota taxpayers?

SCHAPER: Well, the people who actually would do that calculating for the state, they're considered nonessential workers, so they're not working right now. So we don't know completely the cost. But there's some pretty staggering estimates out there already.

Twenty-two thousand Minnesota state employees collecting unemployment could cost the state close to about $8.5 million a week. Health insurance for those laid-off workers, one estimate pegs that at about $4.7 million per week. The state lottery is shut down. That's $1.25 million a day in lost revenue. And this is a busy season for state parks, and the state is losing about a million dollars a week in camping fees, licenses, concessions and the like. And there are also revenue department auditors who, if they were working, they'd normally be catching tax cheats, and that could bring in another $50 million a month for the state, and that could be lost. This list goes on and on and on.

And then there are the residual effects, or ripple effects. There are state contractors, road builders and social service agencies that are laying off their workers because their state contract work is stopped. This ripple effect through the Minnesota economy may just be beginning.

MONTAGNE: NPR's David Schaper, reporting from St. Paul, Minnesota, where the government remains shut down.

Thanks very much.

SCHAPER: You're welcome, Renee.

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