Budget deal averts the worst, ends shutdown

From the Minneapolis Labor Review, July 29, 2011

By Steve Share, Minneapolis Labor Review editor

ST. PAUL — The budget deal that ended a nearly three-week state government shutdown July 20 brought widespread relief that thousands of public and private sector workers could go back to work. But the Republican financing plan, reluctantly agreed to by Governor Mark Dayton, drew widespread criticism from Minnesota’s unions, who had supported Dayton’s call to increase income taxes on the top two-percent of earners.

On the plus side for the state’s workers and their unions, Republicans agreed to three conditions Dayton attached to his offer to accept their financing plan: dropping a long list of extreme policy proposals, dropping a 15 percent across-the-board cut in the number of state employees, and approving a $500 million bonding bill to create jobs.

Governor Mark Dayton received a standing ovation July 22 at the annual convention of the Minnesota State Building and Construction Trades Council in Duluth, where the $553 million bonding bill that was part of the state budget deal was welcome news. Left to right: Dayton, Duluth Building Trades Council president Craig Olson, Operating Engineers Local 49 business manager Glen Johnson.

Coming 14 days into the shutdown, Dayton’s July 14 letter to Republican legislative leaders outlining his terms read: “…despite my serious reservations about your plan, I have concluded that continuing the state government shutdown would be even more destructive for too many Minnesotans. Therefore, I am willing to agree to something I do not agree with — your proposal — in order to spare our citizens and our state further damage” (emphasis Dayton’s original letter).

Six days after Dayton’s offer, the legislature finished passing a series of budget bills which the Governor signed, ending the shutdown.

But instead of closing the state’s budget gap by raising $1.4 billion in taxes from the wealthiest Minnesotans, as Dayton sought, the Republican plan includes $700 million in delayed payments to the state’s schools and $700 million in borrowing against future revenues from the state’s tobacco settlement.

“While this two-year budget avoids the GOP’s draconian cuts to education, health care, and jobs, it’s disappointing that Republican legislators would only agree to one-time revenue that borrows against our future and writes school children yet another IOU,” commented Shar Knutson, president of the Minnesota AFL-CIO.

“GOP legislators’ continued insistence on protecting millionaires not only shut down state government, but also means Minnesota’s revenue shortfall will continue into the next biennium,” she observed.

Knutson noted: “We thank Governor Dayton for successfully stopping GOP plans to erode critical public services, take away Minnesotans’ workplace rights, and put tens of thousands in the private and public sector out of a job.”

“We also commend the Governor for not only saving jobs, but putting more Minnesotans back to work with his jobs and infrastructure bill,” she said.

“Ultimately, the only way we will truly solve Minnesota’s revenue shortfall and build a better state is for the richest to finally pay their fair share in taxes,” Knutson said.

AFSCME Council 5 announced plans to ramp up its “Tax the Rich” campaign at the Minnesota State Fair.

“Minnesotans don’t want to keep kicking the deficit down the road; they want a solution that requires the rich to pay their fair share,” said Eliot Seide, executive director of AFSCME Council 5.

“Public workers are relieved that 22,000 state employees will be able to take care of Minnesota again,” Seide said. “Our jobs and collective bargaining rights survived a fierce attack by a gridlock group of Republicans who believe government should be demonized, starved, or privatized.”

Public workers who were laid-off during the 20-day shutdown will not receive the missing pay.

Bonding bill: Back from dead

Dayton ran in 2010 promising to support a $1 billion bonding bill in the 2011 legislative session, which would create an estimated 30,000 construction jobs across the state building Minnesota’s infrastructure during a time of painfully high unemployment in the construction trades.

Taking office, Dayton outlined projects representing about one-half that total and asked the Republican-controlled legislature to identify their priorities for the balance of the $1 billion total. The bonding bill went nowhere early in the session, however, and appeared dead for the year — until Dayton resurrected it July 14 as one of his conditions for accepting the Republicans’ budget finance proposal.

As enacted, the $553 million bonding bill will create an estimated 14,000 jobs, including projects such as  $131.5 million for building projects at the Minnesota State Colleges and Universities, $88.8 million for building projects and improvements at the University of Minnesota, $33 million for local bridge replacement and renovation,  $50 million for flood hazard mitigation, $16 million for renovation of the Coon Rapids Dam,

Looking to 2012

“We cannot forget the impact of this legislative session and budget,” said Glen Johnson, business manager of International Union of Operating Engineers Local 49. “The number of harmful bills and the obstruction to creating jobs was astounding. Many of these same people ran on jobs, jobs, jobs, but when it came time to do something about it, there was silence. When the 2012 elections come around, it is our responsibility to ensure that the lawmakers who did not stand with us are looking for a new job.”

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