After a seven-month standoff between DFL Gov. Mark Dayton and the Republican-controlled Legislature that produced an unprecedented three-week government shutdown, the state budget impasse came to a rapid conclusion this week as the House and Senate worked through the night on Tuesday to pass a set of budget bills during a one-day special session. Dayton responded just as quickly, signing the legislation in a ceremony at his office at 9 a.m. Wednesday.
Characteristically, however, the two sides seemed to disagree on the size of the budget, with Dayton calling it a $35.7 billion budget and Republicans terming it a $34.3 billion package.(The disagreement involves how the $1.4 billion in one-time funds are accounted for.)
The passage of the budget — largely along partisan lines — followed five days of intense, closed-door negotiations between Dayton administration officials and Republican leaders and committee chairs over the exact details of the agreement. The action clears the way for ending what is believed to be the longest state government shutdown in the country’s history. But Minnesota Management and Budget Commissioner Jim Schowalter warned that it will likely take weeks for state services to return to normal.
The protracted standoff was broken when Dayton agreed to abandon his proposal to raise income taxes on the state’s wealthiest residents and instead adopt a Republican proposal to raise $1.4 billion in one-time money by delaying school aid payments and selling bonds based on future proceeds from the state’s settlement with tobacco companies. In return, Republicans agreed to drop controversial social issue proposals, eliminate a proposed 15 percent reduction in the state’s workforce and assemble a $500 million bonding bill.
The patchwork budget solution does little to rectify the state’s structural budget imbalance. The combination of cuts, shifts and borrowing means that the state will almost certainly be in the red again when budget discussions start up in 2013. Current projections show a $1.9 billion shortfall in the 2014-15 biennium.
Complaints about public access
The lack of transparency during final budget negotiations — with the Capitol locked down for all but staff members, legislators and some reporters — drew criticism from DFL legislators and open-government advocates. But Rep. Michael Beard, R-Shakopee, chairman of the House Transportation Committee, argued that the closed process was necessary in order to have productive, efficient talks and get the state operating again as quickly as possible.
“Sometimes we say things and we float ideas that you don’t necessarily want to be held to account for,” said Beard of the negotiations. “You’re doing it to stimulate discussion. In this highly charged arena, floating free-thinking ideas can be politically disastrous. You’ve got to have a safe spot where you can poke and prod and see where the limits are. At the end of the day, it all comes into the light anyway.”
Sen. Chris Gerlach, R-Apple Valley, chairman of the Senate Commerce and Consumer Protection Committee, said it’s wrong to suppose that the proposals in the bills did not receive public scrutiny. “There is nothing new that was introduced to these bills that had not had a thorough vetting during the legislative session,” Gerlach said. “It just came down to what is going to be accepted into the final bills. So as far as the public input, all of these had had a previous, thorough vetting.”
DFL legislators also complained bitterly about being cut out of the final negotiations. The primary exception was discussions on the bonding bill, which included input from key Democratic lawmakers. “The Capitol has been closed and has stayed closed,” said Rep. Ryan Winkler, DFL-Golden Valley. “No Democrats have been in the room besides the governor. So it’s entirely their deal. They own it.”
Rep. Greg Davids of Preston, chairman of the Taxes Committee, argued that there was no reason to include legislative Democrats in the talks because they had already made up their minds to vote against the final bills. “If there’s going to be no DFL votes, what’s the point?” Davids said. “There’s no good faith there.”
Session punctuated by breaks
The special session commenced shortly after 3 p.m. Tuesday, but both chambers immediately recessed as work continued on processing bills. After reconvening roughly three hours later, the Senate and House each passed a flurry of less controversial bills, including public safety and the environment. But the pace then slowed to a crawl as legislators waited for bills and debates sharpened.
“The fact is that this is a beg, borrow and steal budget,” said House Minority Leader Paul Thissen, DFL-Minneapolis, speaking in opposition to the tax bill. “It borrows and steals from Minnesota’s future and begs the people of our state to look the other way as once again you simply kick the can down the road.”
But Davids insisted that the bills contain substantial reforms that will help reduce the state’s chronic budget deficits, particularly in the areas of local government aid and health and human services. “We pounded down the tails, which I thought was extremely important,” Davids said. “Because every tail that I pound down now, I don’t have to worry about next time.”
The tax bill cleared both chambers shortly after midnight. Roughly two hours later, the HHS bill passed the House and Senate. The K-12 education and state government bills followed in quick succession. The $531 million bonding bill was one area of rare bipartisan accord. It cleared the House by a 112-16 margin and passed the Senate by a 53-11 vote.
Empty halls, galleries as budget passed
A relative paucity of lobbyists showed up to witness the final death throes of the 2011 legislative process. With GOP and DFL leaders agreeing that no amendments would be offered to the budget bills, there was little opportunity to influence their contents. The hallways of the Capitol were largely empty as Tuesday turned to Wednesday. “It’s a deal nobody’s going to change,” said Bill Haas, a veteran GOP lobbyist. Among his government affairs colleagues, he said, “Everybody’s gone through these bills as fast as they can, but you can’t change anything at this point.”
Legislators — who were under duress not only to end the shutdown but likewise to prevent the disbursement of six months’ worth of local government aid under the old statutory formula on Wednesday — had little time to study the fine print of the bills. Many details of bill language were still being worked out until just before the votes took place.
But freshman Rep. John Kriesel, R-Cottage Grove, said he was comfortable voting on the bills because most of the proposals included were holdovers from previously scrutinized legislation.
“I have faith in my leadership and the governor in working out a deal,” Kriesel said. “If there’s people concerned about stuff being done behind closed doors, these are people that we’ve all elected. … There’s no way to get 134 of us in a room and negotiate something.”
The House adjourned shortly after 3:30 a.m. The Senate followed suit a few minutes later.
Negotiating skills criticized on both sides
During the run-up to last week’s announcement of a framework agreement, critics from both parties increasingly complained that the lack of deal-making experience on the part of leaders in both the legislative and executive branches was an important factor in the protracted standoff.
“There are a lot of new people on both sides of this, and that probably has something to do with how long it’s taking,” said Republican Rep. Paul Anderson, who is in his second term at the Capitol.
Seven-term GOP Rep. Larry Howes agreed. “Some of us have been around here for so many years that we know what each other is thinking and what we are going to do,” he said, adding that that was not the case with the new GOP majorities’ many freshman members.
The question has also been raised whether anyone, Dayton and GOP leaders included, possessed the authority and command to shake hands on a final deal without going back to sound out commissioners or caucuses. One veteran GOP insider noted that former leaders like Gov. Tim Pawlenty, GOP House Speaker Steve Sviggum and DFL Senate Majority Leader Roger Moe all had the authority to “say yes to deals,” meaning less “back-and-forth” in the budget talks. “The old smoke-filled room wasn’t always necessarily a bad deal,” the Republican said. “It got you to the point of taking action quicker.”
Republican Senate Agriculture and Rural Economies Chairman Doug Magnus affirmed that sentiment in a recent interview with Forum Communications. “There are not many people around here who can actually close the deal,” Magnus told Capitol reporter Don Davis. “Obviously, the governor is not one of them. … On our [Republican] side, we have some inexperienced leadership here who have not closed deals themselves.”
He added: “I am not blaming either side. I am just stating the facts.”