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Shutdown chances increase as budget talks break up late

Senate Majority Leader Amy Koch and House Speaker Kurt Zellers brief reporters Tuesday on budget talks aimed at avoiding a government shutdown. (Don Davis / FORUM COMMUNICATIONS CO.)

ST. PAUL -- A Minnesota government shutdown became more likely Wednesday with each tick of the clock.

Budget talks ended late Wednesday without a deal to avert the shutdown.

"We do not have a deal," Deputy Senate Majority Leader Geoff Michel, R-Edina, said just before 10 p.m.

Gov. Mark Dayton went home, but his staff remained to work on the budget. Legislative leaders and experts in some budget areas also met well into the night.

Dayton and some legislative leaders had said Wednesday was the latest a budget deal could be completed and still have time to call 200 legislators back to the Capitol in a special session today to either pass the full budget or a temporary budget. The governor's staff and legislative leaders refused to say if they still believed that Wednesday was the deadline.

Michel and House Majority Leader Matt Dean, R-Dellwood, said they have called Republican members to the Capitol today in case a special session can be held. Democratic-Farmer-Laborite leaders did not talk to reporters.

"We're hoping the governor is going to call us back," Michel said.

Dean said Republicans do not think a shutdown is needed.

"We are very, very close in many areas," Dean said.

No negotiation sessions had been scheduled for today, but both sides indicated that still could happen.

Democrat Dayton and legislative leaders, including Republicans who control the Legislature, met several hours Wednesday.

Reports from inside a nine-person state budget negotiating team were skimpy, but the few nuggets that came out suggested Dayton and Republican legislative leaders were far from resolving differences on the two-year budget that is supposed to begin Friday.

"I am continuing to work toward a compromise needed to move forward," Dayton said in a written afternoon statement.

Experts in several budget areas came and went from the governor's office throughout Wednesday. Included were experts on health-care programs, education and funding public works projects.

Those in the talks were ordered not to discuss what went on behind closed doors in the governor's office. Most of the day, legislative leaders used a back door, avoiding a couple dozen journalists waiting outside the main door, which lawmakers usually use.

Most observers, including anxious state workers wondering if they would have jobs on Friday, seemed to have resigned themselves to a shutdown. More than 20,000 workers would be laid off.

Shutdown impacts already are being felt, with some agencies telling Minnesotans they cannot turn around licenses before Friday, so they are not taking applications. State parks begin to close at 4 p.m. Thursday, with 3,000 holiday weekend campers looking for new places to relax.

Contractors were beginning to shut down their road construction operations in preparation for the shutdown.

If an overall budget deal is reached, even this morning, it remains at least feasible to call a special session to pass a temporary budget before midnight. That would give legislative workers time to write budget bills needed to fund state operations when legislators return in a few days.

Those behind closed doors discussed nine budget bills to fund various parts of state government. Only agriculture programs have been funded.

A shutdown is possible Friday because most state executive branch agencies will have no authorization to spend money. However, a judge ruled Wednesday that essential services, such as health and public safety programs, would continue.

Another judge is allowing the courts to remain open. Legislative offices will stay open at least into July.

Going into negotiations, Democrats and Republicans had many differences in how to spend the state's money, but an even bigger difference about how much to spend.

Dayton proposes a $35.8 billion budget for the two years beginning Friday, fueled in part by a $1.8 billion tax increase on Minnesota's highest earners. Republicans reject the tax and pledge to limit spending to $34 billion.

State workers had been concerned that they would lose some of their rights during a shutdown, but an agreement announced Wednesday will help them.

"This agreement protects our health insurance and it ensures that we will be able to return to work with all our benefits intact," said Eliot Seide, director of the American Federation of State, County and Municipal Employees Council 5 and chief negotiator of the deal. "But it also means laid-off state workers won't get severance or vacation checks during the shutdown. Once again, state employees are doing their part to fix the budget."

Don Davis reports for Forum Communications Co., which owns the Herald.