Minn. gov. willing to take GOP offer, end shutdown

CHRIS WILLIAMS - Associated Press,MARTIGA LOHN - Associated Press
A group of touring senior citizens from around the country on a tour out of Florida expressed their disappointment on the steps of the closed Minnesota State Capitol Tuesday, July 12, 2011 in St. Paul,  Minn. The group had hoped to visit the Capitol, History Center and other sites which have been closed due to the government shutdown which began July 1. (AP Photo/Jim Mone)
A group of touring senior citizens from around the country on a tour out of Florida expressed their disappointment on the steps of the closed Minnesota State Capitol Tuesday, July 12, 2011 in St. Paul, Minn. The group had hoped to visit the Capitol, History Center and other sites which have been closed due to the government shutdown which began July 1. (AP Photo/Jim Mone)

ST. PAUL, Minn. (AP) — Minnesota's Democratic Gov. Mark Dayton offered major concessions Thursday in a bid to end a government shutdown, dropping his pursuit of tax hikes to say he was willing to accept — with conditions— a Republican proposal made before the state closed for business two weeks ago.

Dayton said Republicans must drop a list of policy changes and a plan to reduce the state workforce by 15 percent. In exchange, he would sign off on their proposal that would raise $1.4 billion, half by delaying state aid checks to school districts and the other half by selling tobacco payment bonds.

"I believe this is the best option for Minnesota," a weary-sounding Dayton said after his announcement in a speech at the University of Minnesota. "I know in my soul that I am doing what I believe."

Aides said GOP leaders were reviewing Dayton's offer and had no immediate comment. The governor said he had invited them to meet Thursday afternoon, and a spokeswoman said House Republican leaders would do so.

The shutdown over how to resolve a $5 billion deficit has idled 22,000 state employees, closed state parks and rest stops and cut off funding to many social services. It has cost the state millions in the cost of preparing for the shutdown and in lost revenue since then.

It has also prevented entrepreneurs and professionals from getting state licenses. The latest licensing snag threatens to stop the sale of Miller, Coors and other popular beers in the state within days.

Payments by the state to schools and local governments have continued, and a court has taken some of the pressure off by restarting the flow of cash to programs ranging from child care assistance to home meal services for the elderly.

If the Republicans agree to Dayton's proposal and the pieces fall into place, the first-term governor said he is prepared to call a special session to pass a budget within three days.

It's unclear whether their legislative caucuses, which include hard-liners on spending as well as moderates who are willing to consider ways to raise more revenue, will put up all the votes required to pass a budget with a higher price tag. Republicans have dug in for months on spending no more than the $34 billion the state is projected to collect already over the next two years.

Democratic lawmakers have been cold to the tobacco proposal, which could add another complication to finishing a budget. Calls to the top two Democrats in the Legislature were not immediately returned.

The Minnesota impasse has been months in the making, with Dayton seeking to raise income taxes on the highest earners to soften the effect of budget cuts necessary to resolve the deficit. More recently, Dayton had offered to consider an array of other ways to raise revenue, including cigarette and alcohol taxes and a broader sales tax.

As the shutdown persisted, the pressure for a resolution has intensified.

Dayton has been holding public events around the state this week, and said he received a clear message from the people he met: End the shutdown.

"They want this resolved and they don't even care how. I care how," Dayton told the University of Minnesota audience.

Dayton said he was reluctant to accept the Republicans' way out of the budget impasse.

"Despite my serious reservations about your plan, I have concluded that continuing the state government shutdown would be even more destructive for too many Minnesotans," he said in a letter to GOP leaders that he read aloud. "Therefore, I am willing to agree to something I do not agree with — your proposal — in order to spare our citizens and our state from further damage."

Dayton is also asking lawmakers to approve a construction projects bill totaling at least $500 million.

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Williams reported from Minneapolis. Associated Press writer Brian Bakst in St. Paul contributed to this report.