The looming state shutdown that will crash down upon Minnesota Friday if no budget agreement is reached would save some state money but ultimately would cost millions more, says MPR.
Sure, the state would save on salaries for those (still undetermined) employees not deemed essential, says the story by Elizabeth Dunbar, but that would be offset by the expected “millions of dollars in lost productivity, delays and financial penalties.”
The story says:
Under an agreement being voted on by the state worker unions, employees could apply for unemployment but wouldn’t immediately be paid vacation or severance, which would save the state money. But state workers could seek back pay once the shutdown is over.
“There’s savings because 10,000 or 5,000 or whatever number of people are not going to be paid for this number of days. That’s sort of lost on the fact that you end up paying people who aren’t working,” said Peggy Ingison, a former state finance commissioner under former Gov. Tim Pawlenty who now oversees finances for the Minneapolis Public Schools.
“[A] shutdown could have a domino effect, said John Gunyou, the city manager of Minnetonka who served as state finance commissioner under former Gov. Arne Carlson.
“It’s not just the shutting down and starting up again,” he said. “Especially when you talk about the human services area, it’s this mosaic of public and nonprofit agencies. … There are these relationships of funding for which you’re dealing with multiple, multiple agencies.”
Does the eight-day shutdown in 2005 give us any idea of what a present-day shutdown would cost? Not really:
You might expect the 2005 shutdown would be a good source of comparison, but there were many differences, including the fact that Gov. Tim Pawlenty and the Legislature had approved several appropriations bills before the partial shutdown.
At the time, state Department of Employee Relations Commissioner Cal Ludeman estimated the shutdown cost the state at least $12 million, including $10 million in lost productivity. Ludeman, who coordinated that shutdown, told reporters then that it would take weeks to know the true cost of the shutdown, but it appears no formal analysis was done.
Ludeman, who is now secretary of the Senate, declined an interview request. Through his assistant, he referred all questions to Minnesota Management and Budget, which began handling employee relations issues when the two departments were merged.
Judy Plante, a Minnesota Management and Budget assistant commissioner, told lawmakers in January that there was no summary of costs done during or after the 2005 shutdown.