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Dayton Shutdown: 20 Days and $180,000,000 wasted

Minnesota held hostage

DAYTON SHUTDOWN CRISIS: MINNESOTA RUNNING OUT OF BEER -- John Hinderaker laments: “If renewing liquor licenses isn't a core function of government, what is?

DAYTON SHUTDOWN WINNERS AND LOSERS -- St Cloud Times: Dayton's housekeeper, chef among 'essential' state employees in shutdown. KSTP: There will be no back pay for state workers after the shutdown.

WHERE JOBS ARE GROWING -- Medtronic is adding 175 new jobs at $98,000/year . . . in Florida or Texas. It's probably only because of the weather....

WHAT'S AT STAKE WITH THE STATE SHUTDOWN -- Rep. Jenifer Loon comments on DFL plan to raise health and human services spending 43.9 percent over the next two years. “For those who think these kind of increases are essential to Minnesota's quality of life, and any reductions would make us the new Mississippi, allow me to give you some figures to put our current spending in perspective....”

THANKS A LOT, GOVERNOR DAYTON! -- A Minnesota group called Minnesota Majority has entered the state’s budget fray with a website called Mark Dayton’s State Shutdown. The group has also erected four billboards in prominent locations around the Twin Cities, pinning blame for the shutdown squarely where it belongs, on Governor Dayton.

PIONEER PRESS EDITORIAL SLAMS DAYTON -- “Let's be clear. The Legislature passed a complete budget and sent it to the governor. He vetoed it. Meanwhile, the governor has yet to put forward a full budget himself. Instead, he put forward a set of numbers without the details to back them up.”

SENATOR AMY KOCH: “I’ve heard about media bias. But I’ve never personally experienced it myself before.”

MINNESOTA LOSING GROUND -- Republicans offered to keep government open while negotiations continued, but Dayton refused. According to the state's chief economist, Tom Stinson, Minnesota is losing $18 million a week in spending power during Mark Dayton's shutdown. The two day cost the Minnesota Zoo at least $100,000.

ANNETTE MEEKS: If other governors can be responsible, why can't ours?

WAS THIS DAYTON'S PLAN FROM THE START? -- Katherine Kersten speculates Dayton shut down government because he believes he can shift the blame on to Republicans.

LARGEST LAYOFF IN MINNESOTA HISTORY -- Mark Dayton forces the largest layoff in Minnesota history. 22,000 workers added to the unemployment pool.

SHUTDOWN COULD HAVE BEEN AVOIDED -- Dayton pledged as late as February not to shut down government over tax increases. Documents released from the final day of negotiations show Dayton even offered a no tax budget at one point and then changed his mind. The final Republican offer is on page 3. Watch the Republicans' final news conference before the shutdown.

JOE SOUCHERAY: Soak the rich? That's Mark Dayton's trust fund talking.

HOSTAGE TAKING -- Pioneer Press editorial: “Rather than work out differences and sign off on large portions of the budget on which agreement is within reach, Dayton has as of this writing refused to get deals done and preserve operations in those parts of government. This is not compromise. This is hostage taking.”

TAX FOUNDATION: Mark Dayton's tax plan “could encourage tax avoidance and promote poor investment decisions.”

HOW DAYTON'S PLAN WILL RAISE YOUR TAXES -- The DFL and their public union allies say: “hey, what's the big deal, we just want to tax the top 2 percent.” It's not true. Take a look at this must read commentary from Representative Steve Drazkowski.

KATHERINE KERSTEN: Republicans are the ones with a sensible budget plan.

WSJ: Tax the rich, lose the rich.

What are other states doing?
ONLY THREE GOVERNORS HAVE ASKED FOR SIGNIFICANT TAX INCREASES -- According to a report from the National Governor's Association: “Six states proposed personal income tax increases while seven recommended decreases for a net increase of $5.9 billion. Much of this change is due to proposed increases in California, Connecticut, Michigan, and Minnesota.” UPDATE: Tax increases are now off the table in California. Conceding defeat on his tax plan, California Gov Jerry Brown unveiled a budget that imposes deep spending cuts.

NEW YORK -- Liberal governor Andrew Cuomo's budget includes public worker pension reforms, zero new taxes and a repeal of New York's millionaire's tax.

TEXAS: The Lone Star State added 732,800 jobs in 10 years. No other state tops 100,000.” A total of 19 states posted gains in jobs. Minnesota was not so good. We were a net loser, shedding 56,800 jobs, placing us 37th out of 50 in the nation in job creation.

CALIFORNIA: Average San Francisco pension pays out more than average private sector worker earns. And here's a real shocking headline: “Companies Leaving California In Record Numbers.” California vs. Texas is almost becoming a quasi-experiment in two types of governance. California hopes to get some new revenue.

WISCONSIN: Budget reform has saved Wisconsin's schools. “Under the new Wisconsin budget repair, one school district goes from a $400,000 deficit to a $1.5 million surplus . . . . Let’s stop and think of all the protesters who carried signs asserting that their opposition to Scott Walker was for the children.”

INDIANA: Measures taken by Republican Governor Mitch Daniels have resulted in more school funding and a $1.2 billion budget surplus.

OHIO: New budget deal emphasizes jobs and education without raising taxes.

MASSACHUSETTS -- A bid to tax web sales has fizzled. “The speaker and the governor have made it perfectly clear that they won’t support any new taxes.”

NEW JERSEY -- Republican Governor Chris Christie persuaded a majority of Democrat legislators to cut benefits for the state's 750,000 public union employees.

NORTH DAKOTA: Unlike the rest of the US economy, North Dakota is prospering with 3.2 percent unemployment.

ILLINOIS: After a crushing 66 percent income tax hike, Illinois is now trying to do something about its lousy business climate (they currently rank #48). Cook County taxpayers owe $108 billion to public union pensions -- over $63,000 per taxpayer. Chicago exchanges consider leaving state over high taxes. Several businesses have threatened or are threatening to leave the state including Sears, Motorola, and Caterpillar.

Did the Legislature cut vital government services?

That is the DFL spin but the reality is the budget has increased.

First of all, last year’s budget (excluding the one-time federal stimulus dollars) was $30 billion. This year, the legislature proposed increasing that to $34 billion. That is an increase. Education spending is going up. HHS spending is going up.

Second, Minnesota is #7 in per capita taxes in the nation.  That means that 43 other states have found a way to meet vital government services and somehow survive.

Many Minnesota families have had to find a way to do more with less.  Yet, to some people, government must always continue to grow.

How does Minnesota compare to other states?

CNN/Money: Minnesota ranks #45, one of the worst states to start a business.

US Census: Minnesota is #7, one of the highest taxed states. Also: Minnesota is #1. We spend a greater portion of our budget on welfare than any other state.

Tax Foundation: Minnesota ranks #43, one of the worst business tax climates.

Small Business and Entrepreneurship Council: Minnesota is number 50, the worst business taxes in the nation. Minnesota is also one of the worst states for capital gains taxes (#44), gas taxes (#31), and unemployment taxes (#48).

Mercatus Center at George Mason University: Minnesota ranks #34 in the “Freedom Index.” The Freedom Index ranks which states are the freest -- and least free -- from taxes and government regulation.

USA Today uses government sources to show Minnesota is #32, one of the worst economically performing states in the nation over the past decade.

Kiplingers: Minnesota's high taxes help make it the #2 worst state for retirees.

Tax Policy Center: Minnesota ranks #9. Our top tax rate of 7.85 percent for high wage earners is one of the highest in the nation.

Minneapolis/Saint Paul Business Journal: Minnesota ranks #37 in job creation in the last 10 years, #39 in job creation in the last 5 years, and #40 in job creation in the last year.

Forbes: Although Minnesota ranks high in some categories such as quality of life and labor supply, they rank near the bottom economically in business costs (#30), regulatory environment (#32), and economic climate (#37). In another study, Forbes says Minnesota ranks #10, one of the highest taxed states in the nation.

Bureau of Economic Analysis: Minnesota is #38, one of the worst states for personal income growth since 2000.

OECD: Minnesota ranks #3, one highest corporate tax rates in the world.

American Legislative Exchange Council (ALEC): Minnesota is one of the worst states for per-capita income growth (#36), we're losing people faster than other states (#37) one of the worst states for employment growth (#30), and one of the worst states for economic outlook (#36). Minnesota is also one of the worst states for worker’s compensation costs (#35), top marginal income tax (#39), top marginal corporate income tax (#45), inheritance tax (#50), and right-to-work status (#50).

Why did Republicans shut down state government?

They didn't.

The legislature gave Governor Dayton a $34.2 billion budget that increases spending without raising taxes. Dayton vetoed the budget.

Since then, Republicans have presented Dayton with several new offers. Dayton has refused.

Republicans even offered to pass a “lights on bill” that would have kept government operating while negotiations continued. Dayton refused.

Only the governor can prevent a shutdown

The legislature cannot pass any legislation unless they are in session. Only the governor can call the legislature back into session. So far Dayton has refused.

What do business leaders think?

CEO magazine ranks Minnesota in the bottom half in business climate.

• Last March, 3M head George Buckley was pretty frank about the impact of Minnesota's tax climate on his company's business. He warned that if the cost of doing business continues to skyrocket, their company will have no choice but to move to a place that is more business friendly.

• CEO of Ecolab explains how enacting the second highest tax rate in the nation will hurt our state.

• A recent Harvard study found that businesses are highly responsive to local tax policies and can reasonably expect to move where they can make the most profit.

John Boyd, president of Boyd Company Inc, a leading consultant who advises companies on where to move, has stated that costs absolutely factor into a company's decision on where to move.

Fred Zimmerman, University of Saint Thomas professor and a leading expert on Minnesota’s manufacturing sector, said: “Minnesota has had a very anemic and ineffective economic development program for the last two or three decades.” He said the fact that businesses are leaving doesn't surprise him and it is now up to the state legislature to “completely rework the economic development program, because we have been ineffective for far too long.”

How big is Minnesota government?

In 1985, Minnesota was a leader in innovation and technology. The top 5 employers in Minnesota were all private businesses:

Top Employers in Minnesota 25 Years Ago

1. Honeywell
2. 3M
3. General Mills
4. Pillsbury
5. Control Data

Source: Corporate Report Fact Book

What has happened since 1985? Well, government has grown -- a lot. Do you know who employs more people than anyone else today? State government. In fact, of the top 5 employers today in the state of Minnesota, only one of the five is a private business.

Top Employers in Minnesota today

1. State Government
2. Mayo Foundation
3. Federal Government
4. Target Corporation
5. University of Minnesota

Source: Twin Cities Book of Business

But hasn't Dayton already made concessions?

A common trick in any negotiation is to ask for an astronomical amount and then slash the demand in half and declare that you have compromised. If I said to you: “Give me a million dollars,” your answer would most likely be “no.” If I then asked for a half a million and then declared that I have compromised, does the new demand make you any more likely to agree?

The Legislature is very willing to compromise on the budget -- and, in fact, have made several offers to the governor since his original veto. He has rejected every one. One thing they will not compromise on is the issue of taxes.

Raising the cost of government by 10-20 percent year after year is the wrong thing to do. Runaway government spending endangers our quality of life and the future of our children. Living within our means -- getting spending under control, finding a way to do more with less -- is the right thing to do and it is the right thing for Minnesota families.

By the numbers

$30 billion – Minnesota dollars spent during 2010-2011 biennium. An additional $2.3 billion was received from one-time federal stimulus money.

$1.9 billion – Education shift (money borrowed from the school districts). Governor Dayton has proposed leaving the shift in place and borrowing an additional $1.4 billion in the next biennium.

$34.2 billion – The Legislature's balanced budget proposal to the governor. This is the amount in the checkbook. It is the largest Minnesota budget ever and represents a 12 percent increase in state spending (or 6 percent, if you include the one-time federal stimulus money). The Legislature's budget includes a $400 million INCREASE to K-12 spending and a $600 million INCREASE in HHS spending. Other areas receive cuts and reforms.

$39 billion – The “projected” spending made by the 2009 DFL legislature, a 30 percent increase. Health and human services alone was scheduled to increase 44 percent. These are numbers no one, not even Governor Dayton, took seriously. When people talk about a $5 billion deficit, this is the fictional number they use.

$37.1 billion – Governor Dayton's last submitted budget which includes $2.9 billion in new taxes (a 24 percent increase over the previous budget). He has since reduced his demand to $35.8 billion (a 19 percent increase) but has yet to define what he has cut from the original budget offer.

Read more:

Minnpost Budget Primer: Trying to make sense of all those billion-dollar numbers.

Letter to state employees from House Speaker Kurt Zellers and Senate Majority Leader Amy Koch

Mitch Berg: “The worst thing is that his budgets will continue the “autopilot” for budget increases, with no end in sight

What do YOU think?

KSTP/Survey USA Poll: 87 percent of Minnesotans oppose Dayton's plan to increase taxes. Only 8 percent support Dayton's plan.

2011 Legislative Survey: More than 2,000 of you participated in the legislative survey. Most of you told us you wanted to see the legislature cut taxes and get government spending under control. See the survey results here.

CBS Poll: 77 percent say cut spending. Only 9 percent wanted higher taxes.

Read what your neighbors and friends are thinking: Check out the latest letters to the editor in the local papers.

What did Mark Dayton veto?

Republicans gave Mark Dayton a $34.2 billion budget. This budget represents a $4.2 increase in state spending without raising taxes. When Mark Dayton vetoed this budget, he also vetoed:

• Tax relief for Minnesota's 506,000 married joint filers who now have to pay the marriage penalty tax

• Tax relief for Military veterans

• Property tax relief for disabled veterans and surviving spouses

• Property tax refunds for homeowners

• Property tax relief for businesses statewide

• Funding for Minnesota's 72 state parks, 58 state forests, 4,378 campsites and many rest areas. State parks in 49 of 50 states were open for business on July 1st.

Why not tax the rich?

Mark Dayton says if Republicans don't give him higher taxes, he will leave Minnesota government shut down indefinitely....

Raise taxes or we'll shoot this dog

Dayton claims his proposed tax hikes would only affect Minnesota’s top income earners. But the official 2011 Minnesota Department of Revenue Tax Incidence Analysis shows that ALL Minnesota families would be impacted by Dayton’s tax hikes, not to mention the additional businesses and jobs that would flee our state. Dayton's plan would give Minnesota the highest marginal tax rates in the nation.

The way to bring jobs to Minnesota and increase our competiveness is to cut taxes, not increase them, decrease the burdens on Minnesota’s job producers, not increase them.  In other words, a tax increase would take our state in exactly the OPPOSITE direction we need to go.

What can you do?

Contact the Governor:

Call the Governor at:


Email the Governor at: 
(If you click on the link, a form will pop up).

Ask Governor Dayton to:

(1) Agree to the reasonable and responsible $34.2 billion dollar budget (largest in Minnesota history) passed by the legislature in May.

(2) Agree to a “light's on” bill, which would fund state government and end the shutdown.

(3) Sign the specific bills which the Minnesota legislature has agreed to meet his targets (K-12 education, public safety, and judiciary for example).

Get involved:

There are many ways to get involved.

• You can write a letter to the editor

• You can join a local tea party group

• You can donate money

• You can even run for office

Click here to find out more.

Let your elected representatives know how you feel:

• If they support bigger government, tell them to stop.

• If they are holding the line on taxes and runaway government spending, let them know you stand with them.

Stay informed:

Here are some great resources you can use to stay informed about Dayton shutdown:

SD42 Republicans

Minnesota Majority


Mitch Berg

True North

Tim Droogsma

MN House Press Conference

MN Senate Press Conference

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