Minnesota shutdown: No resolution in sight

July 9, 2011

By Tami Luhby @CNNMoney

NEW YORK (CNNMoney) — More than a week after Minnesota shuttered all but essential government services, there’s no end in sight to the budget impasse.

After a contentious series of meetings since the July 1 shutdown, Governor Mark Dayton and Republican lawmakers have no talks scheduled for this weekend. Instead, the two sides are trading blame for the negotiations hitting the skids.

Sunday will mark Minnesota’s longest shutdown since 2005, as well as one of the longest of any state in the past 10 years.

Though critical public safety and health services continue, most state agencies are either closed or operating with a skeletal crew. Manybusinesses and residents can’t get licenses or permits. State parks are closed. And some non-profits that provide social services for the state are not getting paid.

On Wednesday, Dayton proposed a mix of tax increases, surcharges and payment deferrals to bridge the remaining $1.4 billion budget gap. He gave lawmakers a choice between temporarily adding a 2% income-tax surcharge on millionaires or raising cigarette taxes by $1 a pack.

But Republican leaders said any tax increase at all is a non-starter.

“It was very disappointing and a step backwards,” House Speaker Kurt Zellers said of the governor’s proposal.

Even a solution put forth by a group of Minnesota wisemen did not help ease the tension. The former politicians, state officials and business leaders suggested Thursday a mix of spending cuts and payment deferrals, along with a temporary income tax surcharge of 4% on everyone and a hike in cigarette and alcohol levies.

Republicans rejected the proposal, while Dayton said he didn’t agree with increasing taxes on all residents.

To read more, visit: http://money.cnn.com/2011/07/08/news/economy/minnesota_government_shutdown/



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