ST. PAUL -- Political differences separating Democratic Gov. Mark Dayton and Republican legislators when they took office at the first of this year shut down state government today.

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A judge who ordered some state programs to continue operating called the situation a "constitutional crisis."

After nearly a week of marathon negotiations, Dayton and Republicans failed to reach a budget deal Thursday night as rhetoric escalated and negotiations slowed to a stop.

"Unlike the Republican legislators, I believe in putting Minnesotans first," Dayton told reporters late Thursday.

Republicans Thursday night pleaded with Dayton to call them back into a special legislative session so they could pass a temporary state budget. It would have lasted until July 11, giving negotiators time to finish bills funding state government.

"Let's keep the state of Minnesota open," Senate Majority Leader Amy Koch, R-Buffalo, said, standing outside of Dayton's office. "Please don't shut us down for tax increases."

But Dayton said he needed to agree to an entire budget before he could agree on a temporary budget, or even sign individual spending bills.

"I have consistently said I will not agree to anything until I agree to everything," Dayton said.

Republicans said all day Thursday that a budget deal was possible. "We are incredibly close," Koch said.

It was not clear what will happen next, other than most state government programs are suspended. Dayton said he would reach out to Republicans, but there was no indication when any further budget talks could be held. Koch said Republicans would be willing to talk if Dayton invited them.

Predictions from Capitol insiders ranged from a shutdown of a few days to all summer.

As the hours wound toward the midnight shutdown time, hundreds of state workers, who expected soon to be without work, gathered outside the state Capitol in what they called a vigil for services that would disappear in a shutdown. More than 20,000 are without state jobs today.

The shutdown is the only one in the country, even though most other states faced problems similar to Minnesota's $5 billion deficit.

With little more than three hours left before a shutdown, most House and Senate Republicans walked into their chambers and took the seats they use during a session. Leaders said they did it to show they were ready to pass a temporary budget to keep government operating.

Rep. Dan Fabian, R-Roseau, said that going to the legislative chambers and inviting the media in was not a stunt. Instead, he said, "we're hoping the governor will call us to work."

"We are here, we want to reach an agreement," Rep. Tim Kelly, R-Red Wing, said.

Rep. Rod Hamilton, R-Mountain Lake, said Dayton should call a special session.

"We found agreement on a majority of the bills," he said.

But Dayton said Republicans refused to agree to more revenue, proposing instead to delay school payments and borrow money from a tobacco lawsuit settlement.

Dayton said that on Thursday he lowered his proposed tax increase and limited to only a fraction of the richest Minnesotans. But Republicans constantly reject any tax increase and even gave up a much-desired tax cut during budget talks.

Republicans went into the talks insisting that the budget, to begin today, be no larger than $34 billion. Many Republicans campaigned saying a budget should be closer to $30 billion.

The latest Dayton offer before the talks was to spend $35.8 billion, with a $1.8 billion tax increase on the state's highest earners. He originally wanted to spend $37 billion.

The shutdown scenario comes about because Republicans and Dayton do not agree on how much to spend in the next two years, and what programs should get that money. Without a budget deal, state agencies cannot spend money.

Since a shutdown cannot happen in an instant, Minnesotans saw signs it was coming throughout Thursday: Minnesota state parks were closing, road construction projected wrapped up, lines developed to buy lottery tickets and more than 20,000 state workers packed up their belonging to face the largest layoff in state history.

As most of the state's 200 lawmakers were in their offices and ready to vote in what would have been a hastily called special legislative session, chief budget negotiators only met sporadically through the day.

The longest-serving Minnesota Senate majority leader, watching the proceedings because the events are historic, did not expect an agreement.

"Someone has got to say 'uncle' at some point," Roger Moe said, most likely after political pressure comes from a government shutdown.

A judge on Wednesday ordered that more than a third of state employees remain at work during a shutdown to deliver what she called essential services. That means prison guards will be on duty, state troopers will travel the highways, most Minnesotans who receive state-funded health care will be served and people needed to write a state budget will remain on the job.

But programs ranging from the lottery to state parks are closed.



Don Davis reports for Forum Communications Co.