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Minnesota Governor Offers Republicans Deal to End Shutdown

July 14 (Bloomberg) -- Minnesota’s Democratic governor, Mark Dayton, told Republican legislative leaders he accepts their conditions for ending the shutdown of state government -- with provisos.

Dayton will agree to bridge a $1.4 billion budget gap by raising $700 million through bonds tied to the 1998 tobacco settlement and shifting $700 million in education funding into the next budget, he said in a letter today.

In exchange, Dayton said he wants Republicans to drop their demands for policy changes including restricting abortions and requiring voters to show photo identification, as well as a 15 percent reduction of state employees. The governor also wants Republicans to agree to a bonding bill of not less than $500 million for capital projects “to put people back to work throughout Minnesota,” according to the letter.

“I am willing to agree to something I do not agree with -- your proposal -- in order to spare our citizens and our state from further damage,” Dayton wrote in the letter to Senator Amy T. Koch, the majority leader, and Kurt Zellers, speaker of the House of Representatives.

Thinking It Over

Republican legislative leaders are reviewing the offer, Michael Brodkorb, a spokesman for the Senate Republican caucus, told reporters.

The governor said he is prepared to call a special session of the Legislature after his staff has signed off on the nine remaining budget bills “necessary for a comprehensive agreement” and expects that can happen within three days, according to the letter.

Most government functions shut down at 12:01 a.m. July 1 after Dayton and lawmakers failed to resolve a budget dispute in the Midwestern state of 5.3 million. The closure idled 23,000 workers, closed parks and agencies, and halted construction projects.

Dayton had said he didn’t want spending cuts alone to close the deficit, and Republicans opposed his plan for a tax increase. The governor also has said he didn’t want additional debt to balance the budget, and said in his letter that borrowing is “far less preferable than a new progressive source of additional revenue.”

“However, despite my serious reservations about your plan, I have concluded that continuing the state government shutdown would be even more destructive for too many Minnesotans,” Dayton wrote.

To contact the reporter on this story: Mark Niquette in Columbus at mniquette@bloomberg.net

To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net

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