What would a government shutdown in 2011 look like? No one really knows

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As acrimony and posturing continue to dominate relations between DFL Gov. Mark Dayton and GOP legislative leaders, the countdown to a July 1 state government shutdown proceeds. Yet even as the zero hour draws closer, many basic questions — such as the scope of services to be shuttered and the likely public impact — remain mysteries that would ultimately be settled in a courtroom.

During Minnesota’s only previous shutdown, in 2005, the public effects were minimized by numerous factors, most notably the passage of many budget bills beforehand and the short duration of the stoppage.

This time around, most observers are expecting a much harsher set of circumstances. The prevailing line of rumor and speculation in Capitol hallways is that Dayton will petition the court for a much more minimal definition of the essential state services that must be maintained during a government closure.

According to Minnesota Association of School Administrators chief Charlie Kyte, “When they shut the government down last time, they defined essential employees quite loosely, so that it was what was called a soft closure. Other than a few people maybe not using the parks, life went on.

“I’m picking up rumors that Gov. Dayton is planning on redefining what essential services really are. He will then serve it up to the courts to say [many things] are not essential services, and make the close-down much more painful in order to move a compromise.”

The 2005 shutdown created a legally awkward situation in which a court-appointed special master approved spending on operations deemed critical to state government. Then-Gov. Tim Pawlenty, a Republican who was facing re-election in 2006, was in a tricky situation as he tried simultaneously to hold the line on taxes and avoid stoppages that could generate significant public blowback. On the day before the shutdown began, Pawlenty signed the environment and natural resources agency budgets, which kept state parks open during the Fourth of July holiday and mitigated the pressure on lawmakers to act immediately.

The shutdown lasted eight days and was resolved when lawmakers accepted Pawlenty’s proposal to close the deficit with revenue from a 75-cents-per-pack fee on cigarettes sold at the wholesale level.

Dayton, by contrast, does not face a re-election bid until 2014, while the entire Legislature will be on the ballot again in 2012. The governor is also widely thought to believe that a hard shutdown is likely to minimize public hardship in the long run by forcing a budget deal sooner rather than later. That would augur for letting park systems and other high-profile services close in an effort to maximize pressure on Republican legislators.

One of the few things that’s clear at this point is that no one has ever tried to catalog the range of services that could be affected in a broad-scale government shutdown — much less model their economic and political impacts. That has not stopped insiders from trying to imagine the consequences. “What’s the impact on business if there’s a long period of time in which commercial drivers’ licenses can’t be renewed?” one nonpartisan legislative staffer mused recently. “Minnesota police might be inclined to look the other way because of the circumstances, but would the businesses in other states and countries that those drivers’ employers are doing business with be so magnanimous?”

Shutdown mechanics

If the 2005 precedent offers little guidance about the impact of a 2011 shutdown, it does offer insight into how the process is likely to unfold. In the middle of June 2005, when a shutdown appeared likely, DFL Attorney General Mike Hatch petitioned the court to allow “core functions” of government to remain funded and operating during the shutdown. (Pawlenty, a longtime political rival of Hatch’s, filed his own petition the same day.)

A hearing was held on June 23, and Ramsey County District Judge Gregg Johnson subsequently issued an order indicating that the state Constitution requires core functions to be carried out. Included in those functions: complying with the rights of citizens as spelled out in the state and federal constitutions, and adhering to federal mandates. Johnson appointed former state Supreme Court Justice Ed Stringer as special master; in that capacity, Stringer handled requests to keep certain parts of government funded.

In preparation for this year’s possible shutdown, Minnesota Management and Budget (MMB) has been gathering input from state agencies about essential services and the staff required to carry them out. DFL Attorney General Lori Swanson is expected to represent the state in court. When that day comes, however, the administration is unlikely to be the only party bending the judge’s ear about what constitutes “core functions” of government.

The failure to enact a state government finance bill in particular could make a shutdown more difficult to manage. That’s because the bill funds state agencies like MMB, the Department of Revenue and the Department of Administration that handle the basic tasks of entering into contracts, collecting revenue and paying bills. John Pollard, MMB’s legislative and communications director, said a court would have to approve the funding for certain positions at MMB that are responsible for cutting paychecks to people in other agencies that the special master deems to be essential.

“The reason it’s important is because though a lot of agencies [funded in the state government bill] are not necessarily high-profile agencies in the public eye, they are the agencies that support the agencies that are,” Pollard said.

Legal ambiguities

There is at least one legalistic wild card in the process as well. In 2005 a group of breakaway GOP legislators flouted the wishes of then-House Speaker Steve Sviggum and proceeded with a lawsuit challenging the court’s authority to continue government operations at all. They pointed to a provision in the Minnesota Constitution:  “No money shall be paid out of the treasury of this state except in pursuance of an appropriation by law.” The court’s order had anticipated that argument, effectively overruling it by noting that depriving constitutional officers of the power to do their jobs was a violation of the federal Constitution.

But notably, the suit was ultimately dismissed not on its merits but because it was deemed to be filed too late. Such a challenge could theoretically arise again this year, but so far Republicans don’t appear to making much noise about it. Taxpayers League of Minnesota President Phil Krinkie, who in 2005 was a Republican legislator and a plaintiff in the lawsuit (along with Reps. Mark Buesgens, Paul Kohls and Scott Newman), said he doubts that a court would take the plaintiff’s side.

“Someone somewhere will say we need to obviously keep [open] the prisons, state hospitals, those types of services,” Krinkie said. “Obviously if some radical right-wing group like the Taxpayers League said no, no, no, the court would say the precedent has been set.”

The one legislator who has been outspoken on the constitutional issue is DFL Rep. Ryan Winkler of Golden Valley. In a story at Minnpost, Winkler was quoted as calling the 2005 court-approved appropriations “clearly unconstitutional.”

Preshutdown steps

While the legal jousting over “essential” employees plays out, the state and labor unions are preparing for a shutdown. Members of the American Federation of State, County and Municipal Employees (AFSCME) Council 5, will receive layoff notices for about 36,000 employees on Wednesday. Per AFSCME’s contract, employees could apply for unemployment insurance when the shutdown begins and receive health insurance for six months.

In 2005 the unions and the state came to terms on an arrangement known as a limited interruption agreement. State workers were allowed to use their comp and vacation time until July 15. There was also agreement that employee layoffs would go into effect 10 days after the shutdown began. Had the shutdown gone that long, workers would have been entitled to severance.

Eliot Seide, executive director of AFSCME Council 5, whose union endorsed Dayton in the 2010 campaign, said there isn’t an agreement this year concerning a limited interruption of work.

“We have not tried to negotiate anything like that. It’s a different situation,” Seide said.

In contrast to 2005, when AFSCME pressed lawmakers to reach a deal and get employees back to work, Seide said the Republican position in 2011 is unacceptable — and worth a prolonged fight, however disruptive a shutdown would be.

In AFSCME’s eyes, Seide said, rushing to consummate a bad deal would amount to “going back to work to get pink slips.”

In addition to the worker paychecks, the terms of the shutdown might have an impact on commerce.

There are two types of essential services. Priority 1 services ensure life and health safety matters, such as maintaining security at prisons. The Priority 2 class involves things that would cause a severe economic disruption.

The shutdown could have a significant impact on everyday commerce depending on what services are allowed to continue under Priority 2.