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Deal Reached To End Minnesota Shutdown

ROBERT SIEGEL, host:

The end to Minnesota's government shutdown appears to be in sight. Today, the Democratic governor and Republican lawmakers announced that they reached a budget deal. The breakthrough comes on the 14th day of the shutdown. It's the longest in the state's history.

We're joined now by Minnesota Public Radio's Tom Scheck in St. Paul. And, Tom, what's in today's announcement?

TOM SCHECK: Well, what's in today's announcement, we're not sure about all of the specifics, but it increases spending by about $1.4 billion. That's something Democratic Governor Mark Dayton has been pushing for is more money to get this budget deal done.

And the Republicans are claiming a little bit of victory here because it doesn't include any tax increases. But the way they do this is they rely on some borrowing against future tobacco payments. The state settled a lawsuit with tobacco companies. Tobacco companies every year give payments to the state for that lawsuit. They're going to sell those payments to a broker and then use that one-time money to erase part of the deficit.

The other thing they're going to do here is delay payments to schools, and this is a complex accounting trick that a lot of states use. And what they do is they basically say, we're going to pay you in this fiscal year at about 60 percent of what we promised we're going to give you and then next year we'll give you the remaining 40 percent. And so what it does is it makes the books look balanced, but it's a spending obligation that they make over the long term.

SIEGEL: Tom, the projected Minnesota budget deficit is at $5 billion. How will this deal address that deficit?

SCHECK: Well, they're going to be about $2 billion worth of cuts. And then the rest of it is going to be one-time money and also some accounting shifts that I mentioned. So part of the problem that a lot of folks have been critical of this budget deal is that what they could face potentially down the road is another budget problem because it doesn't address the long-term fiscal problems that the state of Minnesota had over the last eight to 10 years. And so the permanent revenue that the governor has pushed for is not in the deal, and the bigger spending cuts that the Republicans pushed for is not in the deal. So what you have is governor and a legislature who are so concerned about the shutdown and so concerned about the short term right now that they're just trying to get this shutdown ended. And down the road, they could be back in this fiscal soup.

SIEGEL: But in the short term, they've given up things, you're saying, that they had wanted.

SCHECK: That's right. And that was part of the issue here. The governor said, you know, I want more money. I'm going to push for tax increase, whether it's on - an income tax on millionaires or perhaps a cigarette tax or an alcohol tax. Republicans flat out rejected that. And the Republicans have said, we don't want any more spending at all. We want to keep this budget at $34 billion, and they've basically said, okay, we'll agree to the budget being a little bit over $35 billion. And they've also given up policy provisions. That was part of the deal with the governor who said he didn't want any banning on embryonic stem cell research that the state does. He also said that he didn't want a 15 percent cut in the state's workforce, and the Republicans agreed to that.

SIEGEL: Well, in a nutshell, what's the impact been of 14 days of government shutdown in Minnesota?

SCHECK: Well, there's been a lot of frustration. The state parks have been closed. Folks have been frustrated about that. The thing that kind of maybe pushed this along a little bit is a lot of the bars were complaining that they may not be able to buy any more beer and the shelves may go empty because they couldn't buy beer from wholesalers, so there was that that happened.

And then there were a lot of social services, safety net agencies that really were struggling and saying they weren't sure if they can make it on their cash reserves over a long period of time.

The governor mentioned that a lot of those things weighed heavily on him when he put this deal forward saying, you know, it's better to end this shutdown and do it in a way that maybe he doesn't agree with, but at the same time, it's more important to end the shutdown than do this in a way that perhaps he doesn't like.

SIEGEL: Okay. Thank you, Tom.

SCHECK: Thank you.

SIEGEL: That's Tom Scheck of Minnesota Public Radio speaking to us from St. Paul. Transcript provided by NPR, Copyright NPR.