Dayton’s signature brings state shutdown to a close

Evelina Smirnitskaya

MinnesotaâÄôs government shutdown ended Wednesday morning.

Gov. Mark Dayton at 9 a.m. signed the budget bills necessary to restart the state government and formally end the 20-day shutdown âÄî the longest in recent U.S. history.

âÄúIâÄôm not entirely happy with what I’m signing into law,âÄù Dayton said of the 12 bills that had been passed just hours earlier in a special session. âÄúItâÄôs not what I wanted, but it was the best option that was available âĦ It gets Minnesota back to work.âÄù

State lawmakers returned to the Capitol Tuesday at 3 p.m. and worked overnight, eventually passing the nine remaining budget bills and three others in a marathon special session that ended around 4 a.m. Wednesday.

The majority of the budget bills passed largely along party lines, with members of the Republican majority approving them and Democrats voting against the bills.

Among them was the higher education funding bill, which includes about $27.2 million more than the University of Minnesota budgeted for the next fiscal year, but reduces overall state funding to the University by more than 10 percent.

A bonding bill that will fund several projects at the University was also passed and signed into law this morning.

The state will begin to call back its 22,000 laid off employees Thursday morning, according to the Minnesota Management and Budget’s shutdown website, but Dayton said operations at government agencies have already began to reboot.

The governor stood outside his office Tuesday morning with Senate Majority Leader Amy Koch, R-Buffalo, and House Speaker Kurt Zellers, R-Maple Grove, as he announced the afternoon special session.

The three pledged to work âÄúas quickly as possibleâÄù to pass the nine remaining budget bills.

Zellers acknowledged the possibility that the shutdown could end as early as Wednesday morning, but made no promise.

âÄúWe have a lot to do yet,âÄù Koch said with a laugh.

The deal for what eventually became a $35.7 billion budget for the next two years was set in motion Thursday at the Humphrey School of Public Affairs, when Dayton announced he would accept a Republican proposal offered June 30 before the state was shuttered.

The two sides soon agreed to a budget framework that would spend more than the $34.2 billion Republicans had insisted on, and does not include any of the tax increases on wealthy Minnesotans that Dayton had pushed for since the Legislature convened in January.

Dayton and Republicans planned to close a $1.4 billion gap by delaying $700 million in payments to K-12 schools and by issuing âÄútobacco bondsâÄù âÄî borrowed money from the stateâÄôs legal settlement with several tobacco companies.

Each side expressed distaste for the deal that both said was essential to get Minnesota on the path to a reboot.

âÄúThis is an agreement that is very difficult for both sides,âÄù Koch said Thursday.

Smaller cuts than predicted for U

The higher education bill that passed shortly before 8 p.m. Tuesday allots about $1.1 billion to the University for the next two years. While overall itâÄôs a cut from the last biennium, the state Legislature gave the University $27.2 million more than the school planned for in its budget for next year.

âÄúWeâÄôre thrilled the situationâÄôs better,âÄù said University Chief Financial Officer Richard Pfutzenreuter. âÄúItâÄôs still a cut,âÄù he added.

The University planned for possible extra cash when it approved the current budget, basing it on a worst-case scenario of $70.8 million less from the state over the last year. Under the new bill, the cuts are closer to $43.6 million.

âÄúWe havenâÄôt finalized our decision on how we will work with this money,âÄù University President Eric Kaler said.

However, he confirmed that part of additional state support would go to relieve tuition increases for students as suggested by former University President Bob Bruininks. Kaler said the University hasnâÄôt decided whether the relief would come in the form of lower tuition or more scholarships.

The University also had an $88.8 million stake in a $531.4 million bonding bill which only the House had passed as of press time.

The bill provides funding for three University projects: about $51.3 million for a new physics and nanotechnology building, $25 million in Higher Education Asset Preservation and Replacement maintenance funds, and $12.5 million for light-rail laboratory mitigation.

As part of DaytonâÄôs requirement that no controversial social issues make it into the budget bills, legislators removed the higher education billâÄôs restriction on human cloning. The University opposed the restriction, as it would limit the ability to do stem cell research.

âÄúTo be a research university, you have to be able to do research,âÄù said Sen. Sandra Pappas, DFL-St. Paul, a member of the Senate Higher Education Committee.

But Pappas later voted against the bill, saying it included an âÄúunacceptable level of cutsâÄù for higher education.

The bill excluded a tuition cap presented in an earlier version, but encouraged the University to adapt a âÄúguaranteed tuition plan,âÄù which, beginning with students starting in the spring of 2012, would keep tuition prices stable for new resident undergraduate students for four years of enrollment. If a student stays at the University for more than four consecutive academic years, the tuition rate would change to match the tuition for new students for that year.

Since the University is constitutionally autonomous from the state, the Legislature can only make a suggestion. Actual change in University policy would require a vote by the Board of Regents. 

Pappas said that in her time on the higher education committee, which she used to chair, the University never refused to comply with the LegislatureâÄôs recommendations.

The University has considered a version of a plan in the past, said Robert McMaster, vice provost and dean of undergraduate education, in an email.

In September, the UniversityâÄôs administration will present an amended operating budget to the board, but Kaler said the guaranteed tuition plan requires more review. He said he is uneasy about students simultaneously paying different rates for the same class based upon when they entered the University.

âÄúThatâÄôs probably not as fair a situation as weâÄôd like to have,âÄù he said.

One percent of state funding to the school for the 2013 fiscal year depends on meeting three of five set benchmarks addressing student aid, graduation levels, research and development and sponsored funding.

Life after the restart

Even after the Legislature passes the remaining budget bills and Dayton signs them, the state of Minnesota wonâÄôt immediately return to life before the shutdown.

Minnesota Management and Budget Commissioner Jim Schowalter said in a conference call Tuesday that it may take weeks for state agencies to restore their normal operations.

âÄúThere are a backload of issues that need to be addressed,âÄù Schowalter said.

Schultz said itâÄôs too early to tell what impact the shutdown and his decision to accept an offer from Republicans may have on Dayton if he chooses to seek re-election in 2014.

The more important question, Schultz said, is what Dayton will do with the last two years of his first term.

Every state lawmaker is up for re-election in 2012. Dayton and the next state Legislature will square off again on the stateâÄôs budget in 2013.