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Minnesota Shutdown Costing Millions To The State

Employees are still there to care for the animals - Photo by Hannah Foslien/Getty Images

Probably not a shock to you, but all this shutdown is doing is allowing both sides to pump their chests like gorillas at the Minnesota Zoo – if only it was open to see.

 

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.

Not coming in

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.

See more about the Minnesota shutdown via Shutdown cost will bring sticker shock | StarTribune.com.

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