State report says costs of shutdown were minimal

State finance officials say the cost of last summer’s 20-day government shutdown was minimal.

“In broad terms, immediate shutdown costs were offset by estimated compensation savings,” the report by Minnesota Management and Budget said.

The state agency says the state lost $50 million in things like tax collections and lottery receipts, spent $10 million on shutdown preparations and recovery costs and paid $10 million in unemployment benefits. But MMB Commissioner Jim Schowalter said the state and federal government saved about $65 million by not having to pay the 19,000 employees who were laid off during the shutdown.

“Where there was harm there was significant harm,” Schowalter said. “Some places continued unaffected, others didn’t continue and were completely shut down. So as a result, when you look at the impact of employees, those who continued to work were not so impacted. those who were laid off had substantial stresses and issues.”

Schowalter said one reason the shutdown didn’t have a bigger impact is because a judge ruled that about 80 percent of state spending had to continue during the shutdown.

The government shut down after Democratic Gov. Mark Dayton and GOP legislative leaders failed to agree on a two-year budget by the end of the last fiscal year. The impasse forced state workers to be laid off, parks to close and many road construction projects to be mothballed.

Gov. Dayton issued this statement on the report:

“I am grateful that the report concludes there was no net cost to Minnesota taxpayers. Unfortunately, it also shows that the worst financial hardship fell upon state employees, who were involuntarily laid off.”

Sen. David Hann, R-Eden Prairie, says the Senate GOP Caucus will push law changes to prevent any future shutdowns.

“I don’t think anybody wants to contemplate additional political game playing around the state budget,” Hann said. “We should be able to reach agreement to say that if we have not reached a budget agreement at the end of the time we’re required, we should have the existing budget or some percentage of that budget be continued,” Hann said.

Hann also said Dayton should get the blame for the shutdown – suggesting it was a political tool to get his tax hike passed into law.

But Eliot Seide, who represents the state employees union American Federation of State County and Municipals Employees Council 5, issued a statement saying the Republican majorities in the Legislature are to blame:

“State employees lost $65 million in wages because a gridlock group of tea party Republicans chose to protect millionaires instead of Minnesotans. They laid off 19,000 workers instead of creating jobs. They ruined family vacations at state parks, delayed road construction and disrupted people’s lives in countless ways.”

“AFSCME state employees do their part every day to make Minnesota a state that works. That’s a stark contrast with the tea party Republicans who created a state that didn’t work for 20 days.”

Here’s the full shutdown report:

Minnesota 2011 Shutdown Executive Summary

  • Mary

    Basically what the shutdown did was extract the wages from all those state employees from the mainstreet economy. The exact place where new money needs to flow into.So certain tax payers saved some money. Did their tax bill go down for 3 weeks?Or did local business lose business for 3 weeks? Did those who were told they had tax payers moneys saved cheer when their state worker neighbors lost their incomes? Sounds like a lot of fool hearty BS based on the flawed premises put forth by republicans, who then try to blame it on the democrats. Such old tactics and so shameful.