Budget Clash Closes Down Minnesota Government

A battle over health care and taxes has created the first government shutdown in Minnesota history. Politicians failed to agree on a budget by midnight Thursday. Friday, 9,000 state employees were told not to go to work. Laura McCallum of Minnesota Public Radio reports.

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About 9,000 Minnesota state employees can't go to work today; they've been laid off. That's just one effect of a partial government shutdown as state leaders fail to agree on several major budget areas by last night's midnight deadline. Laura McCallum of Minnesota Public Radio reports.

LAURA McCALLUM reporting:

Minnesota politicians have been wrangling for months over how much to spend on schools and health care and how to pay for it. On one side are Republicans like Governor Tim Pawlenty, who ran for office on a pledge not to raise taxes. But the state has faced budget deficits Pawlenty's entire term and state health care costs are skyrocketing. The governor says the state needs to live within its means.

Governor TIM PAWLENTY (Republican, Minnesota): We want to reasonably fund our priorities like K-12 education and publicly subsidized health care and other things without bankrupting the state.

McCALLUM: On the other side are Democrats in the Legislature who argue it's not a matter of bankrupting the state. They say Pawlenty wants to cut thousands of people from MinnesotaCare, the state's subsidized health insurance program for the working poor. State Senator Linda Berglin is a Democrat who helped create MinnesotaCare.

State Senator LINDA BERGLIN (Democrat, Minnesota): The governor is proposing eliminating coverage for people that two years ago when we had a $4.6 billion deficit, I saved. I found cuts to save them. Now he wants to cut them again.

McCALLUM: Berglin and other Democrats have called for higher income taxes on the wealthiest Minnesotans. Governor Pawlenty says he won't agree to any income tax hike, although he has proposed a 75-cent-a-pack cigarette tax increase that he calls a health impact fee. The clash over health care and taxes has led to the first government shutdown in state history. Some services will continue after a judge ordered the state to provide essential services related to the life, health and safety of Minnesotans. That includes welfare benefits, food inspections and road construction. But new drivers won't get their licenses. Highway rest stops are closed, and two state-run clinics for people with disabilities are shut down. And thousands of state workers, like Kevin Tucker, are getting layoff notices. Tucker works for the state highway department helping stalled motorists on Minnesota roads. He says he can't afford to go without a paycheck.

Mr. KEVIN TUCKER (Minnesota State Employee): We haven't had a raise in the last two contracts. Everything is going up around us. I go to the gas station; it used to be $25 to fill up. Now it's 45.

McCALLUM: Tucker and other state workers can use their vacation and comp time for two weeks. If the stalemate continues past that. their paychecks stop. Minnesota is the only state in this exact predicament. While a handful of other states are struggling to finish their budgets, all but Minnesota have some sort of mechanism to keep government functioning.

For NPR News, I'm Laura McCallum in St. Paul.

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