TOPICS > Politics

State of Disagreement: Divisions Grow in Minnesota Budget Battle

July 6, 2011 at 12:00 AM EDT
Minnesota's government shutdown continued Wednesday as Democratic Gov. Mark Dayton and Republican lawmakers remained at a standstill over spending and taxes. Judy Woodruff discusses how the state's budget divide compares to the nation's with The Star Tribune's Rachel Stassen-Berger and The Pew Center on the States' Susan Urahn.
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JEFFREY BROWN: Next, from the federal fiscal crunch to the budget woes faced by many states.

In Minnesota, in fact, the government continues to be shut down amid a budget stalemate.

Judy Woodruff has our story.

JUDY WOODRUFF: The government shutdown in Minnesota stretched into a sixth day today, as the state’s Democratic Gov. Mark Dayton, and Republican lawmakers remained at a standstill over spending and taxes. After an hour of talks yesterday, the first since the government closed Friday, the two sides reported little progress.

SEN. MARK DAYTON, D-Minn.: I will consider anything that shows a realistic prospect of producing an outcome as soon as possible that gets people back to work, gets state government functioning again.

KURT ZELLERS, (R) Minnesota state representative: We’re here to talk about the HHS budget, the education budget the next two days get those wrapped up, get a lights-on bill passed, pass the bills we agreed to, get our job done, and get out of Saint Paul.

JUDY WOODRUFF: Republicans want to cap state spending at $34 billion, the amount the state is expected to bring in the next two years. Dayton has proposed increasing taxes on high earners to raise an additional $1.8 billion to cover growing demand for state services and avoid cuts to social programs and public universities.

The impasse left Minnesotans frustrated over the holiday weekend, as many visitors to state parks were turned away.

MAN: Well, it’s ridiculous. So, obviously…

WOMAN: It’s sad.

MAN: … it should never get to that.

WOMAN: The government needs to get their act together and come up with a budget. It’s a matter of not doing your job, I think.

JUDY WOODRUFF: More than 20,000 state employees have been furloughed, as officials try to resolve a projected $5 billion deficit over the next two years.

MAN: Public employees want to work. We want to do our jobs. We’re proud public employees. We do our jobs, and we do it well. Now do yours.

JUDY WOODRUFF: In the meantime, back at the state capitol in Saint Paul, Dayton and GOP leaders met again this afternoon, but with no signs of meaningful progress.

For more, we are joined by Rachel Stassen-Berger, political reporter for The Star Tribune in Minneapolis. And to look at how Minnesota’s budget battle compares to the rest of the country, we are joined by Susan Urahn, managing director for the Pew Center on the States.

And we thank you both for being with us.

Rachel, in Minneapolis, I’m going to begin with you.

Give us more of a sense of how disruptive this government shutdown is. How much havoc has been created?

RACHEL E. STASSEN-BERGER, The Star Tribune: Well, it’s affected Minnesota in ways big and small, from little things, like all the lottery tickets have been pulled from the shelves, to rather bigger things, like nonprofits are unsure if they’re going to get their state funding, which may hurt their clients.

A lot of private businesses are wondering if — what’s going to happen with their state contracts. Even the loggers in Minnesota’s north are suing to essentially be able to continue logging some of the land.

JUDY WOODRUFF: And what about state employees? Who’s affected?

RACHEL E. STASSEN-BERGER: There — there are about 20,000 state employees who have been laid off. It’s not a furlough. It’s a full layoff. And they’re applying for unemployment. If this ends, they will be able to go back to their jobs, but, frankly, nobody knows how long it’s going to take to end.

And then there are other employees who are still at work, and they’re basically filling double shifts and trying to get everything done that the rest of the employees didn’t.

JUDY WOODRUFF: What exactly does this dispute between Gov. Dayton and the Republican state lawmakers boil down to? What — what — give us each side of this argument.

RACHEL E. STASSEN-BERGER: Well, sure.

Well, first, you have to know that we have a $5 billion deficit, which is kind of significant. The state has been — the Republicans want to spend about $34 billion, and so cut a lot of programs, make some shifts to make sure that we are not raising taxes to get this settled. They say that raising taxes is absolutely the wrong thing to do in this very fragile economy.

Gov. Dayton, on the other hand, says that there are valued programs that would be lost. And he’s talked about draconian cuts that the Republicans want to put in place. He’s offered — he has had a tax increase proposal on just the wealthy. He whittled it down to just millionaires. That was rejected.

Today, he actually came out with a second option, which is a cigarette tax increase. Now, the Republicans say any tax increase at all is a nonstarter.

JUDY WOODRUFF: Are they coming closer together or farther apart? What’s your read on it?

RACHEL E. STASSEN-BERGER: It actually seems like there’s been some steps backwards since the shutdown started.

Last week, they were in intense negotiations behind closed doors. They were saying very little to the media. This week, they’re saying a lot to the media, and the word today is backwards. The Republicans are not happy. Dayton says that he’s been misrepresented. It just doesn’t seem like there’s a cordial attitude going on right now. And it makes it even less clear when this shutdown would end.

JUDY WOODRUFF: And, Rachel, where’s the public of Minnesota? Where are the citizens of the state on this? Have you seen public opinion polls?

RACHEL E. STASSEN-BERGER: We haven’t done a public opinion poll. But, you know, I think there are a mix of reactions.

First of all, there’s a lot of frustration out there, simply, why haven’t lawmakers and the governor gotten this done? There’s also some anger. Some of it is partisan, blaming the governor, or blaming Republicans, who control the legislature. But I think there’s — you know, Minnesota had this reputation as a state that works, and now we’re just idled.

JUDY WOODRUFF: Well, let me turn now to Susan Urahn with the Pew Center on the States, because you look at the entire country.

How does Minnesota’s situation compare to other states having budget problems?

SUSAN URAHN, Pew Center on the States: Well, I think Minnesota is a little bit of an outlier this year, for a couple reasons.

One is that it’s very unusual to have a government shutdown. You have only seen a half-a-dozen of these over the last 10 years. The other is that Minnesota was virtually the only state that didn’t get its budget signed on time, at the end of the fiscal year, which, again, is — it’s a — it’s a little bit of a sea change from what we have seen over the last couple years, where states really do have a hard time closing budgets.

But, this year, it was just Minnesota. And then I think it’s also sort of the focus of the debate, which is how to close the budget gap and the role of tax increases. It’s a very intense debate in Minnesota. We have not seen, necessarily, that much of that debate in other states across the country.

JUDY WOODRUFF: Yes, why is it different in Minnesota? Why do you think it’s harder there than it was in these other — other states?

SUSAN URAHN: Well, I think you can take a look at a couple things. You can look at the fact that we saw a very major shift in the last election. So you have Republicans now controlling both branches of the legislature and the governor’s office in 20 states.

You have a lot of governors who signed no-new-tax pledges. And, you know, Republicans and in some case Democrats, Gov. Cuomo in New York, came in and said no new taxes. So, I think, in many cases, folks have taken taxes off the table as a way to sort of deal with the budgets, and what they’re talking about is cuts.

So if you’re going to have a disagreement about how to close a budget, you — you’re very unlikely to do that unless you have divided government. We just have a lot less divided government than we did two years ago. You have that in Minnesota. It’s necessary, but not sufficient.

JUDY WOODRUFF: And where there’s — and where you do see this taxes still on the table and still the subject of a live debate, have other states been able to figure that out?

SUSAN URAHN: Well, it’s — it’s — again, it’s — we’re just not seeing as much conversation about taxes.

So, for example, in New Jersey, the legislature did deliver a tax increase proposal to the governor, but he vetoed it. And, you know, given that — given the role of the governor of New Jersey, he was able to do that and it stood.

But in a lot of cases, we’re just not seeing taxes being used as a tool for closing the budget gap.

JUDY WOODRUFF: Instead, you’re seeing deeper spending cuts.

SUSAN URAHN: Deeper spending cuts.

JUDY WOODRUFF: And what kinds of things are we seeing, are you seeing this year around the country that — that maybe weren’t cut in the past?

SUSAN URAHN: Well, I think you’re seeing significant cuts on the Medicaid sides, where states can, looking at Arizona. You’re seeing significant cuts to education, higher ed in particular. You’re seeing…

JUDY WOODRUFF: Layoffs.

SUSAN URAHN: Yes. You’re seeing, absolutely, layoffs, double-digit tuition increases kind of coming up across the country in public systems. So, yes.

JUDY WOODRUFF: And is there a lesson, Susan Urahn, in what’s happening in Minnesota for other states, or vice versa?

SUSAN URAHN: Well, I would go back to what Rachel was saying a little bit about the public.

I mean, we did a study a couple — last year looking at sort of where the public was in fiscally stressed states. And what the public wants more than anything is, they want government to run well. They want efficient and effective government. They want it to operate smoothly.

This is not an example of government operating very smoothly. And I think the public’s trust in government is very low. And this is not going to help.

JUDY WOODRUFF: Very quickly back to you, Rachel Stassen-Berger in — in Minneapolis, what do you look for next? Is there even a meeting scheduled?

RACHEL E. STASSEN-BERGER: You know, I — my guess is that they will continue meeting and eventually have a breakthrough.

But, you know, we are the epitome of divided state right now. Not only did we have last November’s election, as Susan talked about, that split the governor in one hand and the legislature in the other hand, but we’re also the state of two statewide recounts. You will remember Coleman/Franken.

And we actually did have a government shutdown in 2005 as well. This is a state that is just trying to figure out how to make it work.

JUDY WOODRUFF: Well, we will keep watching. And I know that you will.

Rachel Stassen-Berger in Minneapolis with The Star Tribune, and Susan Urahn here in Washington with the Pew Center on the States, thank you.