By David Bailey
MINNEAPOLIS (Reuters) - Minnesota's Democratic Governor Mark Dayton on Thursday offered, with conditions, to accept a late June Republican budget offer to end what has become the longest state shutdown in recent U.S. history.
Dayton said in a letter to Republican House Speaker Kurt Zellers and Senate Majority Leader Amy Koch that he would accept the offer if they take policy issues and state job cuts off the table and agree to a $500 million bonding bill.
The offer would close a $1.4 billion gap between Dayton's proposed budget and the Republicans, half by delaying school aid payments and half by issuing state bonds against future settlement revenue, he said during a public appearance at the University of Minnesota.
"We must concentrate our efforts on reaching the budget agreements that will return Minnesota to work, not on continuing disagreements over issues on which we do not agree," Dayton said in his letter to Republican legislative leaders.
Republican leaders were expected to issue a statement on the governor's offer later. Republican leaders have asked for a temporary spending plan to end the shutdown and finish the budget negotiations.
Dayton has said several times he would not accept a partial budget agreement and in his letter Thursday he said he would call a special session after his commissioners signed off on the bills needed for a comprehensive deal. He said the session could be ready within three days.
Minnesota's political leaders failed to reach a budget deal by the start of the new fiscal year on July 1, leading to a broad shutdown that reached day 14 on Thursday.
The issues raised are similar to those being debated in Washington over the debt ceiling and in other states. Many states have divided executive and legislative branches, but Minnesota is the only one to have a government shutdown.
Dayton had proposed a budget of about $35.7 billion, with various combinations of tax or fee increases to close the gap with Republican proposals that oppose any tax increases.
POLICY ISSUE PROBLEMS
The governor said Thursday in his appearance that policy issues such as restrictions on stem cell research, abortions and collective bargaining were ones that the two parties were not likely to agree on in three months or even three years.
Dayton also said he did not agree with the proposals to delay school aid payments and issue tobacco bonds, but would agree to the compromise.
The governor, Zellers and Koch have not met in negotiations for a week. Dayton over the past three days has taken his budget proposals to communities around the state and now to the University of Minnesota.
Economists expect the drag on Minnesota's economy to increase as the shutdown continues, including raising the state unemployment rate by about 1 full percentage point.
More than 22,000 state workers have been furloughed and 100 state road construction projects suspended. On the revenue front, the state lottery has been suspended as has gaming oversight, forcing the closing of two horse racing tracks.
Some licensing renewals also have been suspended.
MillerCoors, the second largest brewer in the United States, has been ordered by the state to halt sales of the 39 brands it sells in Minnesota because its brand license expired in mid June and it cannot be renewed until the shutdown ends.
The company is discussing that situation with the state.
Permit renewals also have been suspended, leading to more than 300 bars, restaurants and liquor stores with expired buyers cards to face dwindling inventories. Those numbers will increase if the buyers cards cannot be renewed.
Liquor retailers have asked a state judge to force the state to make those permit renewals possible.
(Reporting by David Bailey; Editing by Jerry Norton)