CHICAGO — Legislative gridlock and political discord in the Midwest have put Minnesota on the path towards a partial government shutdown, stalled action on a new budget in Iowa, and threatened Illinois’ summer construction season.
In Minnesota, a Ramsey County District Court judge on Wednesday will hear Gov. Mark Dayton’s request that about 29 state agencies be allowed to remain open, with one-third of state employees who provide critical services kept on the job in the event no budget agreement is reached by July 1.
Dayton, a member of the Democratic-Farmer Labor party, also wants the court to appoint a mediator to help him negotiate a budget agreement with the Republican majority in the Legislature. He offered a mix of cuts and a $1.8 billion tax increase to erase a $5 billion deficit in the $64 billion two-year budget he unveiled earlier this year. Republicans oppose any tax increases and they have refused to budge.
Most appropriations would end if no budget is in place by the start of the fiscal biennium July 1, but debt service on the state’s general obligation debt would continue to be paid under an ongoing appropriation. The state last experienced a partial shutdown over a budget impasse in 2005.
“My evaluation of critical services has persuaded me even more deeply that a shutdown would have catastrophic consequences for a great many people throughout our state. I remain fully committed to doing everything I can to reach a balanced compromise with the Legislature on a fair and balanced budget before July 1st in order to avoid a shutdown,” Dayton said in a statement.
Republicans charged that Dayton should be focused on negotiations, not on preparing for a shutdown. On Thursday, GOP senators advanced a measure that would allow the Senate to intervene in the litigation over a shutdown and Republican leaders floated a counter-offer on the budget.
House Speaker Kurt Zellers and Senate Majority Leader Amy Koch said they would drop $200 million in tax relief included in their version of the budget and direct the funds to areas Dayton has identified as priorities. Dayton was expected to reject the proposal later Thursday.
In Illinois, lawmakers will return to work in a special session on Wednesday to take up a fiscal 2012 capital bill in an effort to fend off Gov. Pat Quinn’s threatened suspension of capital construction projects already underway or in the works.
While the General Assembly approved a $33.2 billion fiscal 2012 operating budget before adjourning at the end of May, lawmakers did not finalize a capital bill after the Senate tacked on about $430 million in additional spending. The House did not take a vote on the extra spending, leaving a capital reappropriation for already-approved projects in limbo.
Quinn has warned that without swift action, the state will suspend projects. Several lawmakers said Thursday they expect lawmakers will vote on a package authorizing spending for fiscal 2012 without the extra $430 million. Democrats control the House and Senate. Even if House Democrats went along with the extra funding, some Republican support would be needed to achieve the three-fifths majority needed for the bill and they oppose the additional spending.
Without an authorization in place, the Illinois Department of Transportation could not accept or disburse local, state, and federal funds on $16.6 billion worth of pending projects. The suspension would force a freeze on $652 million of new projects and engineering contracts totaling $500 million.
The Capital Development Board would have to suspend $1.7 billion worth of projects. Pending resolution of a legal case, Illinois plans to sell between $2 billion and $3 billion of GOs this year to support the capital projects.
In Iowa, lawmakers remain deadlocked over spending in the next $6 billion budget with Democrats, who control the Senate, pushing for more education funds and Republicans, who control the House, pushing for a shift to two-year budget, along with Gov. Terry Branstad.
In Wisconsin, the Assembly passed a two-year $66 billion budget in a party-line 60-to-38 vote early Thursday, and the Senate began debate later in the day. The budget closely mirrors Republican Gov. Scott Walker’s proposal unveiled earlier this year.
The plan cuts deeply into spending for education, local governments, and Medicaid to eliminate about $3 billion of red ink and sharply reduce an ongoing structural deficit. Democrats oppose the plan but Republicans hold a majority in the Assembly and Senate.
While Walker wins on the budgetary front, political tensions in the state remain high in an ongoing fight over his fiscal 2011 budget repair bill that strips most public unions of their collective bargaining rights.
A Dane County judge had blocked the legislation from being implemented but the Supreme Court overturned that ruling Tuesday.
Several Wisconsin unions filed a federal lawsuit this week seeking to block the legislation, arguing it unfairly favors public safety unions that were exempted.
The package also raises employee pension payments and health care premiums to generate about $300 million in savings in the next budget.
