As Minnesota wraps up the seventh day of being without a functioning state government, reports are emerging that despite all the talk about fiscal responsibility the shutdown will end up costing the state and local businesses millions. The Minnesota state government has been shutdown since Friday due to a budget fight between lawmakers and the Governor which is preventing the state from meeting its constitutional requirement to pass a balanced budget.
Throughout the budget process, Minnesota lawmakers and the Governor agreed to keep information surrounding the negotiations under a tight lid so as to move the process along on time. However, the state faces a $1.4 billion budget gap largely tied to education and Republican legislators there are unwilling to entertain any type of revenue increase in order to close the gap. Instead, they’re offering significant cuts to education and health spending citing fiscal responsibility and the need to reduce government spending. Lawmakers and the Governor were unable to resolve this difference before the deadline resulting in a full shutdown.
So far 20,000 state employees have been told to stop coming into work leaving only essential personnel manning first response networks and maintaining other required functions. However, state employees aren’t the only ones feeling the pain of shutdown. The state stands to lose millions per week as lottery tickets and tobacco go unsold and state parks are closed to paying visitors.
While those things may sound trivial on the surface, stores that sell these and related items stand to face a decrease in their overall revenue during the shutdown. Job growth is also expected to stall out as infrastructure and other public works projects are put on hold. According to a Bloomberg piece, the losses may reach $23 million per week if the budget fight drags on not to mention a slight lag as the state resumes functioning once settled.
So far hints of a deal have been reported, and the only action have been rejections of a $1 tax increase on cigarettes and 2% tax increase for the states wealthiest residents.
“Nobody’s really claiming that a shutdown saves the state money,” said John Pollard, a spokesman with the Minnesota Management and Budget office in the piece.