Shutdown 2011: July 7, 2011 Archive

Around MN: compounding the budget problem

Posted at 7:29 AM on July 7, 2011 by Michael Olson (0 Comments)

Shutdown adding to the budget problem

State officials won't be able to calculate the shutdown's full cost until it's over, but they have quantified some of the notable losses: $1.25 million a day on the lottery, $1 million a week on state parks, $52 million a month in uncollected tax revenue that idled state auditors would have brought in. The cost of other shutdown casualties - including 100 closed road construction projects - has yet to be calculated. (AP)

The closing of the express toll lanes and Giants Ridge public golf course and convention center means more than $120,000 a week will slip away.

Plus, Minnesota expects to shell out $8.5 million a week in unemployment insurance for the laid-off state workers, according to the Department of Employment and Economic Development. And it will pay $4.7 million to cover their health insurance weekly.

Those unemployed public employees, combined with the laid-off construction workers and social services providers who lost their state funding, are expected to drain $18 million in spending from Minnesota's economy each week, said Thomas Stinson, who was the state's economist until he lost his job on Friday. (CNN)

Parents await ruling on child care assistance subsidy

Child care assistance is one of many ongoing headaches in the state government shutdown, now in its seventh day.

Twenty-six thousand Minnesota families received notice from the state that their child care subsidies would be cut off in a government shutdown. But the money comes from a pool of federal, state and county dollars. A judge could decide if those dollars can be sorted, and possibly distributed toward child care. (MPR)

Day care owners feel pain of shutdown (Saint Cloud Times).

Workers' comp claims in limbo

Without a working state government, there's no forum to resolve the disputes that embroil thousands of Minnesota workers over workers' compensation benefits.

Last year, some 13,000 workers' compensation disputes were filed with the Minnesota Department of Labor and Industry. Workers, employers and their insurance companies argue the validity of claims or attempts to change, reduce or end wage and medical benefits.

The cases are typically resolved by the department's mediators. Or they go to judges working for the Office of Administrative Hearings.

Resolution for workers' comp disputes was not ruled an essential service that should be sustained through the government shutdown. Those mediators and judges who deal with those cases have been laid off for the duration of the shutdown.

"If there's a dispute, currently we're not offering resolution services. There's no mediation or other resolution for workers' comp disputes," said James Honerman, spokesman for the Department of Labor and Industry.

Most workers' comp claims are filed with and paid by employers' workers' compensation insurance providers. The shutdown won't likely won't current claims, as long as they're not disputed.

There may be no ruling for those who are awaiting settlement of a conflict, such as with the claim filed by Shawn Dockter, who said he injured his back and neck while working for 16 years as a machinist.

Dockter expects a decision this week about an insurer's denial of his claim for past and future benefits, a claim that could easily top $100,000. (MPR)

Shutdown halts signup for angel tax credit

Start-up companies hoping to benefit from Minnesota's angel tax credit program have been unable to sign up investors because of the state government shutdown.

The program offers qualified individuals a 25 percent tax credit on their investments of at least $10,000 in Minnesota start-ups. (Star Tribune)

Shutdown results in suspended water permit for Duluth manufacturer

A letter notifying the Georgia-Pacific hardboard plant in Duluth that its surface water use permit has been suspended has management in a quandary about whether they can continue to operate the facility, which employs about 140 people. (Duluth News Tribune)

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Shutdown day 7, and no budget talks scheduled

Posted at 8:59 AM on July 7, 2011 by Catharine Richert (3 Comments)

It's day seven of the government shutdown, and so far, there are no budget talks scheduled today.

Brief talks ended yesterday on a sour note: Gov. Mark Dayton offered two new alternative budget plans, but both raised taxes and Republican leaders rejected them as a result. House Speaker Kurt Zellers called Dayton's offers disappointing.

In other news, MPR's Tom Scheck writes that,

The chairs of the House and Senate Transportation Committees will appear before Kathleen Blatz, the Special Master assigned to hear pleas on why certain government services should continue during the shutdown. GOP Rep. Mike Beard and GOP Sen. Joe Gimse plan to request that a judge declare that the state's road construction projects are essential services and need to continue operating.

Also going before Blatz today is Polymet Mining, a Canadian company trying to open a copper-nickle mining operation near Babbitt. The company will argue that state officials working on the environmental review for the proposed mine should be allowed to go back to work.

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Counties cope with effects of state shutdown

Posted at 10:00 AM on July 7, 2011 by Catharine Richert (0 Comments)
Filed under: Cities, Counties, Roads

20110517_centralcorridor3_39.jpgYesterday, MPR's Dan Olson took a look at how the state's two most populous counties, Hennepin and Ramsey, are coping with the government shutdown.

The short story: so far, OK.

According to Olson's report, neither county has been forced to let workers go, though Hennepin County did notify about 1,200 of its 7,500 employees that they may be laid off at some point.

In both counties, road construction continues, including the Central Corridor rail line between Minneapolis and St. Paul, as do county-administered services including child protection.

Still, city and county officials are most concerned about getting a state aid payment due this month that will allow them to continue offering many services without tapping reserves.

Olson writes,

Many county services are mandated by state laws and regulations. Counties rely on two checks a year from the state, called county program aid, to help pay the costs, according to Mark Stenglein, vice chairman of the Hennepin County Board.

Stenglein says it appears likely -- but not certain -- at this point that Hennepin County's next program aid check will arrive next week. It should amount to between $10 million and 14 million, depending on budget negotiations.

"Probationary services to watch offenders, or mental health services the state mandates we have to do, and they pay for it, but it's in question now and our check is due from the state," Stenglein said. "Minus that, that leaves us only to backfill it from our own property taxes."

Read Olson's entire story here.

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Dayton: DHS licensing, homelessness programs are critical

Posted at 10:18 AM on July 7, 2011 by Catharine Richert (0 Comments)

Gov. Mark Dayton has filed a second petition with Special Master Kathleen Blatz requesting Department of Human Services licensing reopen on July 11.

Several groups, including the Emily Program, an organization slated to open an inpatient residential eating disorder facility later this month, petitioned Blatz to recommend the health department's licensing division stay open. In the instance of the Emily Program, opening that facility would be delayed without on-site licensure review.

In the 21 page document, Dayton makes a number of other notable requests.

For instance, he would like several homelessness programs, including the Family Homelessness Prevention and Assistance Program and the Transitional Housing Program to be reconsidered as core critical services. Dayton also wants grocery delivery services for homebound elderly Minnesotans to continue.

He'd also like 16 of the Minnesota Historical Society's 400 staff members to remain on the payroll to protect valuable property and care for animals at Oliver Kelley Farm.

Still, Dayton requests that several services, including a vehicle registration system that allows auto dealers to transmit vehicle sales and registration information to the Department of Vehicle Services, remain suspended.

He's also still adamant that the state's highway rest areas should stay closed. Earlier this week, the Minnesota Truckers Association petitioned the Special Master to keep rest stops open during the shutdown so they could take their mandatory pit stops.

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Dayton's essential staff

Posted at 2:00 PM on July 7, 2011 by Catharine Richert (1 Comments)

Thumbnail image for Govmansion.jpgPolitics in Minnesota has this story about the members of Dayton's staff who will remain on the payroll during a government shutdown.

According to the story, Dayton's staff of about 40 people will be trimmed to 20. Those staffers sticking around include his chief of staff Tina Smith and press secretary Katharine Tinucci.

Two employees on the list have become the subject of a Republican flier. In it, the GOP points out that Micah Pace and Michele Mersereau are Dayton's chef and housekeeper, respectively.

But it turns out that Pace, the chef, isn't being paid with taxpayer dollars during the shutdown. Rather, Dayton's paying his salary out of his own pocket, said spokeswoman Tinucci. She also pointed out that the Governor's residence is a national and state historic site, and requires regular upkeep as a result - hence the decision to keep Mersereau on the payroll.

Ramsey County Court Judge Kathleen Gearin ruled the Legislature an essential service, and so far that means no staffers have been laid off.

But all that could change if the shutdown goes on long enough, according to House Republican spokeswoman Jodi Boyne. That's because funds from the last budget cycle are being used to keep staffers on the payroll, and they are due to run out around Aug. 31.

In the Senate, no employees have been laid off, either, according to GOP spokesman Michael Brodkorb. That chamber is relying on carry over funds as well to keep staff employeed, but they'll likely need to reassess finances at the end of July, Brodkorb said.

Update: Dayton's spokeswoman, Katharine Tinucci, just emailed me to point out that the Politics in Minnesota story requires two small corrections. Micah Hines is acting counsel, not assistant chief of staff. And Nicole Wittig-Geske is not an assistant; rather she handles extraditions and executive orders, among other things, which continue during the shutdown.

Tom Scheck contributed to this report.

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Gearin issues ruling on DHS licensing, housing access

Posted at 11:54 AM on July 7, 2011 by Catharine Richert (0 Comments)

On the recommendation of Special Master Kathleen Blatz, Ramsey County District Court Judge Kathleen Gearin has issued new rulings that, among other things, will allow licensing activities at the Department of Human Services to continue during a shutdown.

On July 6, Gov. Mark Dayton had asked Blatz to recommend that DHS licensing activities be deemed a core government function. The department division performs background checks for employees and volunteers who work on programs deemed critical by Gearin's earlier ruling.

In a separate document, Gearin ruled that funding for training the blind continue.

Gearin's also denied a petition put forth by the ARC Minnesota, a group that helps adults with disabilities move into their own apartments, that argued state funding for its housing-access services is critical.

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Mondale-Carlson panel: $3.6 billion in cuts, $1.4 billion in revenue

Posted at 2:21 PM on July 7, 2011 by Catharine Richert (13 Comments)
Filed under: Budget

A six-person panel assembled by two former Minnesota statesmen has proposed a mix of spending cuts and tax increases to close the state's budget gap.

The group, which includes John Gunyou, who worked for former Republican Gov. Arne Carlson, and Jay Kiedrowski, who worked for former DFL Gov. Rudy Perpich, believes that $3.4 billion in spending cuts from current budget projections is in order.

The group also recommends $1.4 billion in new revenue to close the state's budget gap, including $250 million in increased human services surcharges, a tobacco tax increase of $1.29 per pack for $330 million, and a temporary 4 percent increase in income taxes for the coming biennium.

Sales taxes should be broadened and lowered in the long term, according to the plan.

The panel was convened July 5 by former Vice President Walter Mondale, former Sen. Dave Durenberger and Carlson.

In a press release, Dayton said that the committee's recommendations mirror his own budget proposals, save for one important detail.

"I respectfully differ with the Committee on their recommendation of a 4% temporary income tax surcharge on all Minnesota taxpayers," Dayton said. "My goal has consistently been to protect most Minnesotans from either an income tax increase or a property tax increase, by raising state income taxes on only the wealthiest 2% of Minnesotans."

Here's what House Speaker Kurt Zellers had to say about the plan:

"The 3rd Way Budget Commission recommendation raises income taxes on every Minnesotan. It also taxes Joe Six Pack's six pack and makes those who smoke pay more. Like Governor Dayton's offer yesterday, this again shows that it's no longer about wanting a tax increase on the rich, it's about raising whatever taxes he can in order to spend more. Families across Minnesota are already struggling to make ends meet. This is not a solution. It is a retread of failed tax and spend policies. Republicans will not raise taxes to pay for unsustainable government growth."

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Detective petitions special master

Posted at 5:18 PM on July 7, 2011 by Catharine Richert (0 Comments)

Jonathan Ferris, a detective who investigates high-profile white-collar crimes for the Commerce Department, says he wants his job back.

Ferris is one of seven officers who were laid off last week as a result of the government shutdown.

Last night, MPR's Laura Yuen gave us a glimpse of what Ferris would be asking for today during a hearing with Special Master Kathleen blatz.

Today, she has the full story.

Yuen writes,

The insurance-fraud division investigates financial crimes and takes down scammers and swindlers. Ferris said county and federal prosecutors often charge the targets of the investigations with felonies, including racketeering and arson.

In a most recent high-profile investigation, the state detectives uncovered an elaborate alleged mortgage fraud case that is currently being prosecuted by Hennepin County.

Ferris said government shutdown means bad news for investigations that are under way.

"An undercover investigation related to a healthcare fraud investigation has been stopped. The detective who was working in an undercover capacity is currently laid off."

Ferris argues that the investigators help protect public safety, a core function of government that has already been broadly ruled on by a Ramsey County judge. Other officers -- conservation officers, troopers and agents who enforce alcohol and gambling laws -- remain on duty through the shutdown.

Read here entire story - and catch the audio - here.

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What we know

Posted at 6:00 PM on July 7, 2011 by Catharine Richert (2 Comments)
Filed under: Budget, Courts, Health

On day seven of the government shutdown, there was no headway on budget talks, but lots of news coming out of Ramsey County District Court Judge Kathleen Gearin's office.

Today, she ruled that licensing operations at the Department of Human Services should continue. That means background checks for doctors and professionals who work in child care, for instance, will continue.

We also know that Gov. Mark Dayton wants Special Master Kathleen Blatz to rule homelessness programs and child care support critical after all.

The GOP is using Dayton's list of essential staff as ammunition in the battle over who's responsible for the shutdown. In addition to his chief of staff and press officer, Dayton's list includes his chef and housekeeper. But it's important to point out that Dayton's paying his chef's salary with his own money during the shutdown.

And a group of budget experts say they've got a deficit solution.

As this point, there are no budget talks scheduled for tomorrow.

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Shutdown closes Duluth mental health facility

Posted at 6:47 PM on July 7, 2011 by Madeleine Baran (6 Comments)
Filed under: Health

A shutdown ruling last week appeared to preserve funding for state hospitals that provide treatment for people with mental illness. But at least one state facility that provides inpatient treatment has closed due to the shutdown.

The closure of Bridge House, a crisis facility in Duluth, surprised Rachel Scott. She relies on the center for outpatient services. Scott struggles with depression and short-term memory loss caused by a traumatic brain injury. She has trouble remembering to do basic household tasks and relies on a social worker at Bridge House for emotional support and practical assistance with benefits and other paperwork.

A few days before the shutdown, Scott's social worker told her the facility might have to close down. When Scott tried to call Bridge House on Friday, she was redirected to a generic state voicemail message.

MPR News called Bridge House today. The voicemail says:

"Welcome to the State of Minnesota voicemail system serving the Duluth area. Please re-enter the seven-digit number of the person you're trying to reach. Or if you're a subscriber on the system, please press the pound key. Thank you."

Scott says the facility should at least provide a voicemail message with information about other resources.

"Being routed to a state agency by an automated machine might be enough to put (some people) over the edge," she said. "I mean it's possible people could die because of this, and I think it's very serious."

A court ruling last week preserved funding for many programs that provide mental health services. It also continued funding for Medical Assistance, a state-run health insurance program that provides reimbursement for hospital and outpatient health care, including mental health treatment.

But the ruling did not include all mental health programs, creating confusion among providers and people who receive services. The closure of Bridge House highlights the complexity of the state's mental health services and the uncertain status of funding for certain programs.

Bridge House provides at least 12 crisis beds for people with severe mental illness, according to the Department of Human Services' website. It also provides outpatient services to help clients live independently.

The facility falls under the broad category of State Operated Services, a division of the Department of Human Services. The division provides services for people with mental illness, developmental disabilities, chemical dependency and traumatic brain injury at nearly 200 sites around the state.

Department spokesperson Terry Gunderson said the ruling did not preserve funding for the entire State Operated Services budget.

"Much of State Operated Services is open, but some services are not," Gunderson said in an email. "Bridge House is closed - it was not designated a critical service by the court. There is currently a petition before the court that may impact Bridge House."

The department's website may have contributed to the confusion. It includes State Operated Services department included the programs on its list of "open services," without qualifying that some services may have closed.

Here's what it says:

"State Operated Services (direct care for people with disabilities) - prioritize critical services and treatment."

Gunderson, via email, said, "The key words on that bullet are 'prioritize critical services and treatment' which is intended to show not everything is open."

The department was not immediately able to provide a list of all open and closed State Operated Services. Check back with the Shutdown Blog for updates.

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