Shutdown roundup: costs of shutdown piling up


All indications show little progress in budget talks between Gov. Mark Dayton and GOP legislative leaders as the first week of the state’s government shutdown comes to a close.

It’s unclear how much discussion will take place this weekend as Politico’s James Hohmann tweeted that Dayton’s only scheduled public event over the next few days will involve him serving steak to troops in Wisconsin on Sunday.

Meanwhile, here are some of the latest shutdown-related news items making headlines:

• State economist Tom Stinson said Minnesota will lose roughly $23 million each week in spending power from public and private workers during the shutdown, the Washington Post reported.

The roughly 23,000 state workers who were laid off as a result of the shutdown may get only about half their average $1,000 weekly salary in unemployment benefits, Stinson said. That, plus the loss from employees of nonprofits and private construction workers, may mean a total $18 million taken from the economy, he said, according to the Post.

Stinson also told the Post the state could lose as much as $5 million in weekly spending power by private workers, especially in the leisure industry, as furloughed employees cut back on spending if the closure drags on for a month or longer.

“This is not going to produce a recession in Minnesota or anything like that, but it’s going to be a drag on the state’s economic growth,” Stinson said.

• The state experienced a drop in one of its three main credit ratings as a result of the shutdown, the Associated Press reported.

Fitch Ratings downgraded the state’s bond rating from AAA to AA+, citing the government interruption and “an increasingly contentious budgeting environment.” A lower credit rating will make it more expensive for the state to borrow money, and could also increase borrowing costs for cities, counties and school districts.

“While negotiations continue, it is impossible to know at this point when a budget agreement will be reached or the shape that the final agreement will take,” Fitch’s analysts wrote, according to the AP. “However, it appears likely that the outcome will continue the use of non-recurring balancing tools and that deferred payment obligations will continue to be a drag on the state’s finances.”

• A Ramsey County judge on Thursday granted requests from the first of nearly 40 groups who sought continued funding during the shutdown, according to the Star Tribune.

Ramsey County Chief Judge Kathleen Gearin agreed with pleas from Blind Inc., the Southern Minnesota Regional Legal Services, the state school board association and the state Department of Human Services licensing division. Special Master Kathleen Blatz began hearing requests for continued funding July 1 and has been making recommendations to Gearin.

• Some of the state’s top earners — those who would be most affected by Dayton’s proposal to increase income taxes on Minnesota’s millionaires — have unsurprisingly came out against those plans, the Star Tribune reported Friday.

Among those who voiced their opinions were CEOs of Minnesota corporations, who didn’t comment on the affect of the increase on their own salaries or lifestyles, but the impact they felt the tax would have on the state’s economy.

“I don’t agree that raising taxes the way [Gov. Dayton] has proposed is a smart way to raise revenues for the state,” said Doug Baker, CEO of Ecolab. “I told the governor this.”

Minneapolis publisher and prominent Democratic fundraiser Vance Opperman told the Star Tribune it’s “obnoxious” to single out a group of high earners in Minnesota to balance the budget.

• A budget proposal from a bipartisan group led by former Vice President Walter Mondale and former Minnesota Gov. Arne Carlson that called for decreased spending and across-the-board tax increases drew negative responses from the state’s current lawmakers.

According to the Star Tribune, the group proposed reducing spending by $3.6 billion and hiking revenue by $1.4 billion to erase Minnesota’s $5 billion deficit.

House Speaker Kurt Zellers said the proposal is “not a solution” and a “retread of failed tax-and-spend policies,” Zellers said.

WDAY 6 News in North Dakota reported some Minnesota groups are looking to persuade legislators to treat public lakes, like public parks, with no access.

Three Minnesota lakes groups sent Dayton a letter to close public access to 360 Minnesota lakes, partly to stop the spread of invasive species, like Zebra muscles and flowering rush.

• Iowa lottery ticket sales are getting a boost because of Minnesota’s state government shutdown, the Des Moines Register reported.

Iowa Lottery Vice President Mary Neubauer told the Register ticket vendors along major highways between Iowa and Minnesota are seeing an increase in Iowa lottery sales.

The Jo Stop convenience store along Interstate Highway 35 near Northwood, which is just south of Albert Lea, Minn., has seen lottery sales running at two to three times normal.  The North Star Express, another Northwood-area convenience store, reports lottery sales up 25 percent, Neubauer said.

A Casey’s General Store in Estherville is seeing a 30 percent increase in instant-scratch and lotto sales since the Minnesota shutdown, while a Kum & Go convenience store in Spirit Lake reports about a 25 percent increase, Neubauer told the Register.