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Home Politics State + Local Shutdown cost will bring sticker shock

Minnesota stands to lose millions of dollars in revenue and get saddled with millions more in new expenses for every week that the widespread shutdown of state government persists.

In both subtle and stark ways, the shutdown that began Friday will bring new financial pain to the state treasury. Closing many operations will save the state some money, but an array of revenue sources as diverse as the lottery and highway toll lanes have been cut off.

Significant new costs also are emerging, some of which the state will never recover.

"It's not like money stops going out the door because of a shutdown," said John Pollard, a spokesman with Minnesota Management and Budget.

One of the biggest new expenditures: unemployment benefits for roughly 22,000 freshly laid-off state employees. In most cases, those workers are entitled to collect 50 percent of their pay while not working, according to a spokeswoman for AFSCME, the union that represents 18,000 state workers.

Those workers also will continue to receive health insurance at a cost of $4.7 million a week to the state. Altogether, the state could be shelling out $13 million a week to keep all those workers idle, based on the average salary of $38,000 earned by a state union member.

"We still believe a shutdown costs more than it saves," AFSCME spokeswoman Jennifer Munt said.

No one in the state has hard numbers on the total financial impact of the shutdown. Figures likely won't be tallied until the crisis is over and the state reopens for business.

But the costs will be both routine -- maintaining and securing government buildings and computer systems not in use -- and extraordinary.

Consider the state's Revenue Department, where just 53 of 1,504 employees are still on the job. While voluntary tax payments will continue, the audit section has been mothballed. That means the state stands to lose about $52 million in uncollected payments per month.

"Because auditors are not working on new audits, that money is not coming in," Revenue Department spokeswoman Lynn Andrews said. "We do not expect to recoup that."

Another lost revenue stream -- commuters. Normally, motorists pay the state $40,000 to $50,000 a week for MnPass privileges, which allows them to beat the traffic by using express lanes on parts of Interstates 35W and 394.

More significant, perhaps, will be the interruption in highway construction. MnDOT shut down more than 100 road projects.

"There is a cost, but I can't tell you what that will be," MnDOT spokesman Kevin Gutknecht said. "It's very disruptive. It's the middle of the construction season."

http://www.startribune.com/politics/statelocal/124920504.html

What do you think now??? For those who thought that it was all fine and dandy for the state government to be shut down... Dont see them bouncing back from this as another cafemom said.

Answer Question
 
mrssundin

Asked by mrssundin at 1:24 PM on Jul. 3, 2011 in Politics & Current Events

Level 19 (6,722 Credits)
Answers (6)
  • Raise a glass to partisan politics, our 2 party system is slowly destroying our country.

    They weren't going to bounce back or recover quickly even without the shut down.
    miss_lisa

    Answer by miss_lisa at 4:26 PM on Jul. 3, 2011

  • NOBODY thinks it is "fine and dandy" for ANY state to shut down....it happens...it happened since the 80's, to states here and there. We need to wait and see....its not good but it is NOT the end of the world.
    minnesotanice

    Answer by minnesotanice at 5:06 PM on Jul. 3, 2011

  • http://thinkprogress.org/politics/2011/02/28/147055/pawlenty-shutdown-flip/


    MN shutdown in 2005 when Pawlenty was Governor.

    minnesotanice

    Answer by minnesotanice at 5:08 PM on Jul. 3, 2011

  • "No one in the state has hard numbers on the total financial impact of the shutdown. Figures likely won't be tallied until the crisis is over and the state reopens for business." LOL, in other words; they need time to make up some of that fuzzy Math...

    Unfortunately, many people who don't pay taxes and some who do, think that the GVT, State and Fed.; have unlimited $$$. Many of them, simply don't care one way or another, It's all good, as long as they get their entitlements. These problems in Mn. are just the beginning, we need to be asking, who is responsible for all of these shortages. Since this progressive admin. came into office, spending has been THEIR way and only after the Nov. election, did we really began hearing of all of these shortages. Previous to that, there seemed to be few problems, well, except California, which is a disaster! But somehow, I am sure all of this is Bush's fault, too! (sarcasm)
    agentwanda

    Answer by agentwanda at 5:34 PM on Jul. 3, 2011

  • No one in the state has hard numbers on the total financial impact of the shutdown. Figures likely won't be tallied until the crisis is over and the state reopens for business." LOL, in other words; they need time to make up some of that fuzzy Math...

    simply don't care one way or another, It's all good, as long as they get their entitlements. These problems in Mn. are just the beginning, we need to be asking, who is responsible for all of these shortages. Since this progressive admin. came into office, spending has been THEIR way and only after the Nov. election, did we really began hearing of all of these shortages. Previous to that, there seemed to be few problems, well, except California, which is a disaster! But somehow, I am sure all of this is Bush's fault, too! (sarcasm)

    Answer by agentwanda
    --------------------------
    I just hope that our Governor stands tall and doesn't give in to the GOP here in MN.
    A
    minnesotanice

    Answer by minnesotanice at 6:59 PM on Jul. 3, 2011

  • One more reason to not have the unions running the state. It's a good thing to stand up to them and their liberal buddies
    itsmesteph11

    Answer by itsmesteph11 at 1:54 AM on Jul. 5, 2011

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