Shutdown 2011: July 13, 2011 Archive

Few winners, many losers in shutdown

Posted at 9:43 AM on July 13, 2011 by Paul Tosto (0 Comments)
Filed under: Business

MPR's Martin Moylan has a look at the winners and losers so far during the first two weeks of the shutdown.

Read the story below or click on the play bar to hear it.

More than 20,000 laid-off state employees and thousands of Minnesotans going without a variety of state services clearly show who's losing in the state government shutdown. But are there any winners?

Some businesses in the state are hoping for a sales kick, including Pawn America. Company spokesman Michael Deering suspects his company and other retailers selling used goods may get a boost from the shutdown. Laid-off people still keep spending, he said.

"People really at a down time or when they're short on funds actually are looking for more for their money," Deering said. "They're still consumers. But typically they don't want to spend as much."

The shutdown also seems likely to generate a lot of legal disputes and court battles.

Ted Roberts is a lawyer with a firm that focuses on construction-related matters.

"In the short term it may result in more work for us," Roberts said. "The shutdown has resulted in a lot of construction projections stopping or halting. And most contractors when they bid projects, they're really depending and relying on a specified timeline. When that timeline is disrupted, you'll have consequences that just go down the chain."

And that chain may lead to court. But Roberts, who works with Fabyanske, Westra, Hart & Thomson of Minneapolis, said the outcome over the long term won't be good if clients end up going out of business because of the shutdown.

Some businesses know the shutdown is definitely bringing in more clientele.

Doris Palmer is one of the owners of Maple Springs Campground, a half-mile west of the Forestville/Mystery Cave State Park. She estimates to be getting 10 percent more campers at her park than usual.

"We filled last weekend completely," Palmer said. "Right after a holiday weekend, that's usually low. And now we're getting some through the week that we don't normally get." But Palmer is reluctant beneficiary. She wishes the nearby state park were open because the two operations collaborate.

It's not clear how many businesses are coming out ahead because of the shutdown. Augsburg College economist Ed Lotterman said they're out there.

"I think there are far fewer winners than there are losers," Lotterman said. "And the gains for the winners are not as much as the losses for the losers."

The most obvious potential winners are the private campgrounds and resorts and other businesses poised to replace a lost state service, Lotterman said, but it's impossible to estimate how much some parties might be coming out ahead.

Take Ross Freeman, for example, a manager at Hudson Liquor across the state line in Wisconsin. Freeman thinks he's seen an uptick at the store.

"Maybe a small amount from people crossing the border, mainly because Minnesota liquor stores are closed on Sunday," he said. "And I think some of the people were probably buying lottery tickets here instead of not being able to get them there."

The shutdown also means no Minnesota state lottery.

And that may point to the biggest and clearest winners in the Minnesota government shutdown. In the aggregate, lottery players are financial losers. In any given week, they typically part with millions of dollars overall.

But now they can't play. All bets are off.

A University of Minnesota psychology professor, Randy Stinchfield has extensively studied gambling. He doubts most lottery players are shedding dollars on other forms of gambling.

"They're probably holding on to that money they would have spent on the lottery, yeah," he said.

When the lottery does return, there could be a surge in betting as gamblers make up for lost wagering opportunities, Stinchfield said. But the longer the shutdown goes on, the better off they may be.

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Beer here?

Posted at 10:02 AM on July 13, 2011 by Paul Tosto (3 Comments)
Filed under: Business

KSTP last night reported that MillerCoors will have to stop selling beer in Minnesota because it did not get its license renewed before the shutdown:


State officials have told the company, it must come up with a plan to remove its 39 brands of beer from shelves and in bars in a matter of days. The company failed to renew it's brand license with the state before the shutdown. Each alcohol brand needs to pay a 30 dollar brand license fee. That fee is good for 3 years.

The situation, however, is still, umm, fluid.

Wirtz Beverage Minnesota, one of the region's largest beer distributors, just tweeted that the MillerCoors products are still flowing.

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UPDATE: MillerCoors tells the Milwaukee paper that their beer continues to flow in Minnesota.

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BONUS: Unsure who commenter CHS is, but thanks for bringing back all those Smokey and the Bandit memories!

I was 15 when that movie came out and it was awesome!

We're certainly not advocating illegal beer sales. But if you go find that movie trailer online (I did), you will be transported back to 1977 and (arguably) the most fun movie ever!

For folks who haven't seen the movie, it's about driving Coors from Texas to Georgia. Back then you couldn't get Coors distributed legally in the East.

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MillerCoors says beer is flowing

Posted at 11:15 AM on July 13, 2011 by Paul Tosto (0 Comments)

KSTP last night reported that MillerCoors will have to stop selling beer in Minnesota because it did not get its license renewed before the shutdown:

But MillerCoors officials this morning say it's not true. The Milwaukee Journal Sentinel reports:

Is Minnesota running out of beer?

It would seem so after reports surfaced that one consequence of the ongoing government shutdown in Minnesota is that breweries, distillers, distributors and liquor and beer stores don't have licensing authority to keep selling alcohol.

And one big brewer - MillerCoors - is apparently caught in the middle of it.

Minnesota state officials have told MillerCoors that it must come up with a plan to remove its beer from store shelves because the brewer failed to renew its brand license with the state before the shutdown.

But MillerCoors spokesman Julian Green said those reports were false. It's business as usual for MillerCoors in Minnesota for now, he said.

Green said the company complied with all applicable state laws, sent its registration and fees to the state on time and is working with Minnesota authorities to clear up the matter.

"We are feeling the pain just like other licensees, but we are working with the state to clear this up," Green said.

UPDATE: Here's a story from MPR's Annie Baxter with DPS official comment:

MillerCoors no longer has a valid "brand label registration," which allows it to sell its beers in the state, said Doug Neville, a spokesman at the Department of Public Safety.

Neville said Chicago-based MillerCoors LLC missed a June 13th deadline to renew its license. When it submitted paperwork a few days later, it was done incorrectly. The resubmitted documents were not processed by the state before the shutdown began.

Julian Green, a spokesman for MillerCoors, says it did meet the deadline for the license and simply overpaid. He says MillerCoors will not halt beer sales in Minnesota, one of its biggest markets.

Wirtz Beverage Minnesota, one of the region's big distributors, just tweeted earlier today that the MillerCoors products are still flowing.

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So it's still not clear to me yet if I will have to stop the Smokey and the Bandit references.

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Can you fish without a license in shutdown?

Posted at 12:01 PM on July 13, 2011 by Paul Tosto (1 Comments)

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Interesting discussion popping up this morning about whether you can fish in Minnesota without a license during the state budget impasse.

There's no doubt that you can't buy a fishing license in the shutdown. On the record, the DNR says, "All natural resource and license laws will remain in effect during a shutdown and will be enforced."

So if you don't have a valid license, you're not supposed to fish.

Or can you? The Brainerd Dispatch quotes frustrated Crow Wing County officials that DNR is letting non-licensed anglers fish on the honor system but isn't making it widely known.

MPR News reporter Tom Robertson confirmed that:

Officials in Crow Wing County say they've been told by a local DNR official that conservation officers aren't checking anglers for fishing licenses. County Attorney Don Ryan says he was told by a conservation officer that people found to be fishing without a license will be asked on the honor system to get a license as soon as they become available at the end of the state government shutdown.

Ryan says his office is responsible for prosecuting fishing violators, but that since the shutdown, none have been referred for prosecution by the DNR.

Crow Wing County Commissioner Paul Thiede says he's received numerous questions and complaints from resort owners who've lost out of state customers because licenses aren't available for purchase. Thiede says resort owners should encourage their customers to fish without a license and purchase a license when they become available.

DNR enforcement officials, Robertson adds, did not immediately return phone calls for comment.

This is a huge deal, obviously, to Minnesota's sport fishing industry.

We're trying to get some clarity on this now. If anyone has any insight, please post below or shoot me an email directly: ptosto@mpr.org

Rule-follower that I am, I'm not sure I'd fish even if I got the wink and nod from DNR.

How about you?

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Lawmakers ask judge to order roadwork in shutdown

Posted at 12:52 PM on July 13, 2011 by Paul Tosto (0 Comments)
Filed under: Roads and transportation

From MPR's Dan Olson:

Two key Minnesota GOP lawmakers today asked Judge Kathleen Gearin to order work to resume on many of the state's shuttered road projects.

Minnesota House transportation committee chairman Mike Beard and Senate transportation committee chairman Joe Gimse told the judge that spending state money during the shutdown for upkeep and rebuilding of roads fits within her order of keeping critical core functions operating during a government shutdown.

"They are subject to erosion, to wear and tear and to damage as they stand at this moment, particularly vulnerable because the projects are not completed and the drainage and weather protection is not intact. To allow that to continue impinges on the public safety and that's the argument we'd make."

Judge Gearin told the lawmakers her order allows for emergency repair and inspection of roads and bridges during the shutdown. She said it is not the role of the court to be the transportation commissioner. Gearin took the request under advisement but said it's the Legislature and the governor's job to agree on a budget that will allow government spending to resume.

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Judge orders child care aid to continue

Posted at 12:57 PM on July 13, 2011 by Paul Tosto (1 Comments)

Ramsey County District Court Judge Kathleen Gearin says state child care assistance payments are an essential service that must continue during the state government shutdown.

MPR News reporter Madeleine Baran writes:

Parents and child care providers are expressing relief at a judge's ruling Wednesday to restore funding for child care assistance programs in Minnesota.

The programs lost funding when the state government shut down July 1. That left thousands of families without the subsidies that helped them pay for child care. And it left providers scrambling to cope with a loss of revenue.

Child care assistance is funded by a mixture of federal and state funding. A June 29 ruling by Kathleen Gearin preserved one funding source, but the Department of Human Services said it was impossible to separate it out from the others.

Judge Gearin's ruling Wednesday ordered all three child care assistance programs should receive funding.

"We are ecstatic," said Gretchen Raymer, director of the Creative Kids Academy in Lexington, Minn. "It was nap time at the center, and I had to go apologize to teachers if I woke the kids up because I was jumping up and down in the office."

Raymer plans to call families this afternoon to tell them the good news. She said 27 children had to stop coming to the day care because their parents lost child care assistance subsidies.

The shutdown has cost the center about $4,000, she said. The children on child care assistance accounted for nearly one-third of the total children who receive day care at Lexington center.

Eva Szabo, a mother who relies on the assistance, said she almost started crying when she heard the news. Szabo has two daughters, age 3 and 4, who had been attending Creative Kids Academy before the shutdown.

"I'm so happy about it," she said. "I told the girls and they started jumping up and down."

Lisa Scott also expressed relief. She runs a day care for 10 children out of her home in Moorhead. She said all of the parents receive child care subsidies. Scott has been providing day care to only two children since the shutdown. One of the parents mowed her lawn in exchange for day care.

Scott said she lost about $1,000 in the last two weeks. She's a single mom, and she worried that she could lose her home if the funding wasn't restored quickly.

"I was, for lack of a better term, freaking out," she said. "I am so relieved, it's not even funny."

Judge Gearin's ruling also clarified that funding should continue for grants that provide services for people who are homeless, including grants for homeless youth.

Click here to read the ruling.

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Dayton says he's still waiting for new GOP offer

Posted at 1:29 PM on July 13, 2011 by Paul Tosto (1 Comments)

From MPR News reporter Tim Pugmire:

DFL Governor Mark Dayton traveled to Rochester today to highlight what he sees as the stakes in the ongoing budget impasse and state government shutdown.

The event at the Rochester Senior Center primarily focused on issues related to health and human services funding. About two dozen participants, including elderly and disabled people, shared personal stories about their use of state services. But Dayton was also asked to explain why he wasn't in St. Paul negotiating with Republicans.

"I've made three proposals, compromise proposals to try to resolve the situation," he said. "I've not in the last 13 days of the shutdown received a single proposal from the Republican side. So, as soon as they're willing to negotiate, I'm ready and willing to do so."

Dayton went on the road for a second day to highlight what he sees as the stakes of the state government shutdown. Much of the discussion focused on health and human services funding. But Republican Representative Steve Drazkowski of Mazeppa urged Dayton to end the shutdown with a special session.

"Governor, we all want to get back to work," he said. "Let's call the session and either do a lights on bill and/or let's agree on the six bills that we do agree on, and move forward so we remove some of the obstacles from society."

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Shutdown brings cuts to domestic violence shelters

Posted at 3:07 PM on July 13, 2011 by Paul Tosto (2 Comments)

A court-appointed official has yet to rule if domestic violence shelters and programs are "essential" and must be funded during the shutdown. But some groups already closing or eliminating services as they run out of funds.

MPR News reporter Dan Gunderson reports:

Some programs had funding approved before the shutdown, but the state Office of Management and Gudget has not yet written the checks, says Liz Richards with the Minnesota Coalition for Battered Women.

A handful of programs stopped providing services this week and more are expected to close by week's end if they don't receive funding, said Richards, whose group represents 87 programs across the state ranging from domestic violence shelters to supervised child visits for divorced parents.

"A large percentage of our programs have done reductions in services," she said. "As the word goes out, even if there are places where there are services at some level, people are going to get the message there's nothing out there and not even bother to make the call."

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Judge rejects plea to restart road projects in shutdown

Posted at 3:23 PM on July 13, 2011 by Paul Tosto (0 Comments)
Filed under: Roads and transportation

From MPR News reporter Dan Olson:

A petition from two key Minnesota GOP lawmakers today to order work to resume on many of the state's shuttered road projects was rejected by the judge appointed to rule on essential government services.

Minnesota House transportation committee chairman Mike Beard and Senate transportation committee chairman Joe Gimse told Ramsey County Chief Judge Kathleen Gearin that spending state money during the shutdown for upkeep and rebuilding of roads fits within her order of keeping critical core functions operating during a government shutdown.

"They are subject to erosion, to wear and tear and to damage as they stand at this moment, particularly vulnerable because the projects are not completed and the drainage and weather protection is not intact," Gimse said, "To allow that to continue impinges on the public safety and that's the argument we'd make."

Gearin told the lawmakers her order allows for emergency repair and inspection of roads and bridges during the shutdown. She said it is not the role of the court to be the transportation commissioner. Gearin took the request under advisement but said it is the responsibility of the Legislature and the governor to agree on a budget that will allow government spending to resume.

"The contract can't be fulfilled by the government because of the failure to reach a resolution on the budget issue because they haven't funded the other costs of this project and the contract can't go forward without that happening," Gearin said.

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Shutdown nixes 'urban assault ride'

Posted at 3:47 PM on July 13, 2011 by Paul Tosto (0 Comments)

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It's billed as "the biggest bicycle scavenger hunt series in the nation!" and it was coming to Minneapolis at the end of the month.

But count the Minneapolis Urban Assault Ride as another victim of the state government shutdown.

Adventure Fit, the Colorado company that runs the "urban assault ride" called off the July 31 Minneapolis event because it was "unable to finalize its liquor permit" because of the shutdown.

Why nix it for a liquor license? Adventure Fit said it did so because of contractual reasons -- the ride's sponsor is New Belgium Brewing of Fort Collins, Colo.

The Minneapolis event's been rescheduled for September 11.

So, we'll have an "urban assault ride" on the 10 year anniversary of the 9/11 attacks.

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U of M details voluntary leaves during shutdown

Posted at 4:05 PM on July 13, 2011 by Paul Tosto (0 Comments)

The University of Minnesota is offering voluntary leaves of absence to help cope with the state shutdown.

My MPR colleagues Tim Post and Alex Friedrich have been pulling together the details.


This is apparently a narrowly tailored program designed to help out a small number of employees whose salary comes entirely from grants and contracts run through the state -- and thus is cut off by the state shutdown.

Faculty members, whose pay is not dependent on such state contracts, are not included in the program...those eligible would tend to be tech support personnel, administrative support, junior researchers and so forth.

You can read the complete post here.

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DNR chief: No unlicensed fishing in shutdown

Posted at 4:36 PM on July 13, 2011 by Paul Tosto (4 Comments)

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The answer is no.

If you don't have a valid fishing license, you can't fish and the DNR is not OK with you buying a license after the government shutdown ends.

Not sure if that will end the controversy, however.

Officials in Crow Wing County and Bemidji have been telling people it's OK to fish unlicensed on the honor system during the shutdown, that the DNR isn't enforcing and just get a license when the shutdown is over.

Top DNR officials this afternoon said that's not the case.

"There is no change in fishing license requirements in Minnesota; all license requirements remain in effect during the shutdown," DNR Commissioner Tom Landwehr wrote to MPR's Tom Robertson this afternoon.

The DNR also put out this release.

The Minnesota Department of Natural Resources (DNR) is reminding anglers that during the government shutdown, anglers must possess a valid fishing license in order to fish in the state of Minnesota.

The Department's Electronic Licensing System (ELS) is not currently operational as a result of the shutdown. Therefore, anglers who had not purchased licenses before July 1 are currently unable to purchase fishing licenses.

DNR Commissioner Tom Landwehr has received reports that a few contract license agents and resorts have started issuing temporary fishing licenses with a "promise to purchase" a legal license when the Minnesota state government resumes operation. This practice is in violation of several Minnesota statutes and rules, as well as the DNR's standard ELS point-of-sale agent contracts.

"If an angler is found fishing without a valid license, they are in violation of state law. Enforcement action will be taken, which could include the issuance of a citation," said DNR Enforcement Chief Jim Konrad. "These unauthorized documents are not considered valid fishing licenses."

"I continue to remain hopeful that a resolution to the current budget impasse will be found soon," said Commissioner Landwehr. "Once a resolution is found, DNR staff will work to get the ELS system up and running again as quickly as possible."

Here's Robertson's story.

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Shutdown forces Georgia-Pacific to shut mill, cut 150

Posted at 4:53 PM on July 13, 2011 by Paul Tosto (0 Comments)

A week before the shutdown, Senate Minority Leader Tom Bakk, (DFL-Cook) told MPR's Midday program a shutdown could cost Minnesota a paper mill.

He didn't say which mill. This afternoon, however, Georgia-Pacfiic announced it would shut down its Duluth board plant because it couldn't get the proper permitting in the shutdown.

The Duluth News-Tribune reports:

Georgia-Pacific's board plant in Duluth is shutting down today because the company could not renew its water-use permit during the Minnesota state government shutdown.

The Duluth plant at 1220 W. Railroad St. uses water from Lake Superior to cool its processing equipment and then returns it.

Nearly 150 people are employed at the plant that makes Superwood, a thin hardboard used extensively in the auto industry.

"We've had to temporarily shut down operations," said Melodie Ruse, a Georgia Pacific spokeswoman in Atlanta.

Ruse said the company continues to seek a solution to the problem and the company expects to file a petition Thursday with the state seeking an exemption during the government shutdown. Until the state acts, however, all employees will be out of work, Ruse said.

The state forestry association has warned that more than 600 jobs could be lost after 10 weeks of a shutdown.

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Wells Fargo to shutdown affected clients: Let's talk

Posted at 5:15 PM on July 13, 2011 by Paul Tosto (0 Comments)

Wells Fargo bank this afternoon said it will offer "special assistance" to customers with outstanding loans who've been affected by Minnesota's government shutdown.

It didn't detail what help might be available but encouraged clients to call. "Wells Fargo will work one-on-one with its consumer customers to provide case-by-case options," the bank said. "Business customers are encouraged to work directly with their banker for solutions for any financial impacts from the shutdown.

Earlier this week. U.S. Bank said it would allow a month reprieve from most loan payments to customers affected by Minnesota's state government shutdown. The bank is offering the program to laid off state employees and others whose businesses are affected by the shutdown.

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What we know

Posted at 5:52 PM on July 13, 2011 by Paul Tosto (6 Comments)

Absent serious budget negotiations, beer and fishing dominated the discussion during Day 13 of the Minnesota state government shutdown. Here's a look at some of the things we learned today.

You can't fish without a valid license.
The inability to get fishing licenses is making life really difficult for businesses and tourism in northern Minnesota. Officials in Crow Wing County and Bemidji were spreading word that the DNR was giving the quiet OK to folks to fish unlicensed during the shutdown.

By the afternoon, DNR had squashed the notion.

Would you fish without a license? That's Thursday's Today's Question. Be sure to check it out.

Needy parents and children got a break.
Ramsey County Judge Kathleen Gearin, agreed that state child care assistance payments are an essential service that must continue during the state government shutdown.

A beer crisis looms, maybe.
State officials say Beer giant MillerCoors doesn't have the needed licensing and so can't sell more beer in Minnesota. MillerCoors says it paid the licensing fees, that this is just a bureaucratic hitch and that the company will not halt its beer sales.

Online, you would have thought the Apocalypse was near.

Bottom line: The thing's likely headed for court.

There is nothing on the horizon that looks like negotiation. Gov. Mark Dayton was in Day 2 of his tour around parts of Minnesota. He still says he's waiting for the next GOP offer.

Meanwhile, GOP Senate Majority Leader Amy Koch writes a piece for the Star Tribune arguing that Dayton is "holding the state budget hostage because he wants to raise taxes and spend more."

And things continue to close.

While the beer and fishing controversies were interesting and a little fun, we got another tough reminder of the serious, rising cost of the shutdown on everyday Minnesotans.

Georgia-Pacific said it would shut a Duluth mill that employs nearly 150 because it could not get the proper permitting because state government was closed.

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