Minnesota State Shuts Down -- Budget Issues

Update

July 20, 2011: Governor signs bill to end shut down. The tipping point? Beer. 

July 19, 2011: Minnesota's "payday loan" -- incredibly poor return, highly speculative, -- and all for $700 million to cover current expenses, and nothing in the headlines about the $5 billion gap.

July 16, 2011: The can is kicked down the road, but the state is poorer, comes out with a worse credit rating, and will probably have to deal with budget shortfall again early next year.  The delay only made things worse. The number $700 million keeps popping up as the amount needed to get through the current debacle; the overall budget gap at one time was reported to be $5 billion.  Minnesota might want to look at some things its neighboring states are doing. The agreement still needs to be passed by both the House and the Senate.

July 14, 2011: Over? If so, was it due to beer? MillerCoors was going to have pull all 39 brands of beer in the state.

July 13, 2011: Over? According to radio news report, the governor is willing to sign the budget, contingent upon ... state Republicans have not responded to his "contingent" speech.

July 11, 2011: Longest shutdown in history; no new talks scheduled. 

July 10, 2011: No sense of urgency and now the bars may have to shut down. 

July 8, 2011: The rich are not unanimous in wanting to raise taxes on themselves. The governor's plan to tax the rich would be twice the tax rate paid in Illinois. At best it raises $700 million, a far cry from the $5 billion gap. By the way, the $700 million might be needed just to pay the increased interest rates that will now be levied on Minnesota as their credit rating tanks.

July 5, 2011: The budget impasse certainly doesn't seem to be all that urgent. It's hardly a front pae story in the Minneapolis Star-Tribune. The brief story simply states the governor and the GOP will resume budget talks about 2:30 p.m. this afternoon. If this were serious, folks would be meeting around the clock.

July 4, 2011, day 4: Highway construction comes to a halt; blue collar workers hit the hardest; shovel-ready jobs halted.

The blow from the shutdown has been almost immediate for hundreds of companies with state contracts. Across Minnesota, the private sector is bracing to see how dramatically the shutdown will affect the state economy, as lawmakers and the governor continue to argue over how to close a $5 billion deficit.

Matt Kramer, head of the St. Paul Area Chamber of Commerce, described the mood among his members as one of exasperation. "It's an almost resigned -- 'Can you believe this is happening again?'"

July 3, 2011: This is really quite incredible, a state shutting down and all the unintended consequences. And I always thought Minnesotans were smarter than Nodaks.

Minnesota stands to lose millions of dollars in revenue and get saddled with millions more in new expenses for every week that the widespread shutdown of state government persists.

In both subtle and stark ways, the shutdown that began Friday will bring new financial pain to the state treasury. Closing many operations will save the state some money, but an array of revenue sources as diverse as the lottery and highway toll lanes have been cut off.

Significant new costs also are emerging, some of which the state will never recover.
"It's not like money stops going out the door because of a shutdown," said John Pollard, a spokesman with Minnesota Management and Budget.

One of the biggest new expenditures: unemployment benefits for roughly 22,000 freshly laid-off state employees. In most cases, those workers are entitled to collect 50 percent of their pay while not working, according to a spokeswoman for AFSCME, the union that represents 18,000 state workers.

Original Post

Link here. 

Something tells me this will simply be a 5-day Fourth of July weekend for state employees, that the legislators will have made their point by Tuesday, and a budget will be passed by Tuesday night, July 5, 2011.

A win-win for everyone. 

Or not.