UPDATE: Dayton, GOP Reach 'Framework Agreement' to End Shutdown

Minnesota’s legislators are heading back to work.

Gov. Mark Dayton and state Republican legislative leaders Thursday afternoon reached a "framework agreement" on a budget, taking the first steps toward ending the government shutdown.

During a three-hour meeting in Dayton’s office, the parties agreed to a June 30 Republican budget proposal that would not raise taxes, but would borrow money to balance the budget. The deal will raise $1.4 billion, in part by issuing state bonds against future tobacco revenue for $700 million.

The other $700 million will come from shifting K-12 education aid from a 70/30 distribution to 60/40, meaning districts will get only 60 percent of their allotted aid during the school year when it's to be used, and will get 40 percent after that year is over, rather than the previous 70/30 distribution.

Districts traditionally receive the majority of their funding during the current school year and receive the remaining funds a few months after the fiscal year ends and enrollment numbers are confirmed. A few years ago, the Legislature started shifting school funding by moving from 90/10, which it had been for years, to the 70/30 formula.

At the Capitol following the meeting, Dayton said he expects to call a special session for legislators and to pass a budget—which likely will total more than $34 billion—“very soon. Within days.”

Dayton said he expected he and Republican leadership would work late into the night and through the weekend.

“This is an agreement that is difficult for both sides,” said Senate Majority Leader Amy Koch, R-Buffalo. “There’s been some good discussions and some coming together on agreements for reforms.”

House Speaker Kurt Zellers (R-Maple Grove) agreed reaching a deal—as well as the shutdown—has been difficult.

“We are in an imperfect situation,” Zellers said. But in the end, “we’re focused on getting the lights back on and getting the government up and running again.”

Despite the agreement, Dayton reiterated his disappointment with the deal, which he announced Thursday morning.

“I’m disappointed I wasn’t able to pursuade a legislative majority of the wisdom of my approach to raise taxes on the wealthiest Minnesotans,” Dayton said. “In the absence of that, however, this is an agreement today.”

“Today was about making a deal that we’re disappointed in, but that’s done," Zellers said. "None of us got exactly what we wanted. But we have a deal that will be done, a budget that will be balanced and a state that will be back to work.”

As part of the agreement, Republicans —take all policy issues off the table for the time being; drop a 15-percent, across-the-board reduction in the number of employees at all agencies, regardless of their funding source; and after all the budget issues have been resolved in a special session, the GOP must support and pass a bonding bill of at least $500 million next session.

Koch said she expected the budget to pass the special session.

“We’re working with our caucus," Koch said. "We need to hammer out final details in these bills but we’re confident. We’re focused solely on making sure these bills are processed as quickly as possible.”