Thank you to our summer law clerks, Josh Brekken, Sawan Patel, and Jennifer Singleton, who contributed to this article.
There is one thing I know for sure: If you have camping reservations at a state park over the Fourth of July, you should make other plans. As a government shutdown on July 1 looms before us, there is little certainty about what services will be deemed “core functions” by the Ramsey County District Court, which is scheduled to hear arguments on the matter on June 23, 2011. Calls to state agencies last week reflected the confusion. Many calls went unreturned. Others stated that they are taking guidance from Governor Dayton’s outline of Critical Services, which was submitted in response to Attorney General Lori Swanson’s Petition of June 13.
The determination of core functions of the government is a balancing act that has been addressed most recently by the court in 2001 and 2005. In those years, under Governors Ventura and Pawlenty, a failure to resolve the state’s budget by July 1 led to brief government shutdowns. Concerns that this shutdown may last several weeks, or even several months, makes the determination of core functions even more critical.
The Attorney General, in her Petition, requests that the court follow the procedures established in 2001 and 2005, allowing government entities, including state agencies, county and municipal governments, school districts and boards and commissions, to determine their core functions. Under her plan, those core functions would then be reviewed by the Commissioner of the Department of Management and Budget and the court. According to the Petition, both the Minnesota and United States Constitutions require that these services continue to be provided in order to protect life, liberty and property.
In 2001 and 2005, core functions were determined by the court to include, but were not limited to, the care of prisoners and the security of the State’s prisons; the provision of health care to patients in both state-run and local and private facilities; the State’s education system, the application and maintenance of federal and/or State contracted or mandated projects and programs (welfare, medical assistance, construction projects, etc.); the preservation of safety and security in state-run facilities; enforcement of laws involving food, drugs, hazardous materials; transportation safety; the proper provision of health care; law enforcement activities; emergency and disaster assistance; the continued production of power; protection and maintenance of lands, buildings, waterways; and activities essential to the preservation of the financial system of the state, which includes prompt payment to amounts owed to employees, vendors, and contractors.
Governor Dayton, in his Response to the Attorney General’s Petition, challenges the broad determination of core functions of the government, claiming that such a result exceeds the authority of the governor absent legislative appropriations. Ultimately, according to Dayton’s Response, the legislature holds the purse strings in Minnesota, and the governor has very limited authority to make expenditures absent those appropriations. Dayton recommends that the court require that the parties enter mediation in order to resolve the current budget stalemate rather than make a judicial determination regarding core government functions.
If the court is to intercede, Dayton provides a list of what should be determined by the court to be core functions in the event of a government shutdown. If the court accepts Governor Dayton’s argument on Thursday, a government shutdown will be a much more dramatic event, impacting Minnesota citizens and businesses in far-reaching ways. While this may force the parties to the table more quickly to resolve the budget, it will be a painful period for the State. Below are some highlights of the governor's recommendations. We also provide the links to the full Petition and Response below. Please contact us with any questions you might have.
Under the governor’s plan, entitlements such as cash, food and health care assistance to recipients who are eligible as of June 30, 2011, would continue. However, no new applications for Medical Assistance or other programs would be considered during a shutdown. In addition, any related vendor and provider payments would cease on July 1. During the 2001 and 2005 shutdowns, these payments were considered core functions and allowed to continue.
If the governor’s plan is approved, the State would stop Medicaid payments to nursing homes that provide for nearly 20,000 sick and elderly Minnesotans. In addition, payments to private facilities providing treatment for the mentally ill and disabled, as well as payments to home health agencies and providers would cease.
In addition to payments discussed above, the following services would be deemed critical core functions under the governor’s plan:
- Minnesota Sex Offender Program – prioritize security and treatment
- Continue critical child support payment services
- System support for county child protection workers
- Process pharmacy payments authorizations – prioritize cases of life and safety
- Authorize oxygen tanks and methadone for patients
- Authorize Do Not Resuscitate/Intubate determinations for people under state guardianship
- Incident command and operational support for critical services
The Attorney General argues in her Petition that providing an equal opportunity to adequate education is required under the Minnesota Constitution and that funding, including General Education Aid, should be considered a core function of government. Under Governor Dayton’s plan, education funding would cease as of July 1. If the budget is not resolved by July 15, $295 million in State funds would not be sent to the State’s schools. In addition, federal funds would not be distributed.
Under the governor’s plan, only the following would be deemed essential after July 1:
- Maltreatment of minors reporting;
- Building security contract;
- Incident command and support for critical services.
The Department of Health’s Communications Office has posted an online fact sheet, “Planning for a Possible Shutdown” (http://www.health.state.mn.us/topics/shutdown/factsheet.html). The list of services deemed critical in the factsheet is nearly identical to Governor Dayton’s recommendations; the primary difference is that “Maintaining the Minnesota Poison Control Center operations” is not included in Governor Dayton’s list of critical activities. There are few distinctions here between the recommendations of the governor and the attorney general.
The Department warns that in the case of a shutdown, even these critical services would be carried out on a “very partial basis,” with just 189 of nearly 1,450 employees retained to carry out the Department’s functions.
Key activities and funding that would be discontinued in the case of a shutdown include:
- More than $300 million in funding to external partners;
- Financial support to local units of government and tribes;
- Activities related to obesity, tobacco, cardiovascular disease, diabetes, cancer and asthma initiatives;
- Grant funding to community organizations to reduce health disparities;
- Activities related to the Sage cancer screening program;
- Licensing and permitting services related to the Department’s oversight responsibilities;
- Responses to mold, asbestos, lead, and indoor air environmental health hazards;
- Responses to consumer HMO complaints;
- Information and educational services;
- Consultations with health care providers, industry, and other government units; and
- Website maintenance and updates; and
- Expert analysis and/or interpretations on health issues.
According to Governor Dayton’s recommendations, the following Department of Health activities are recommended to be continued:
- Newborn screening;
- Vaccine distribution;
- Core public health laboratory capacity;
- Respond to public health emergencies;
- Health and safety inspections of health care facilities;
- Food inspection, safety, and security;
- Drinking water supply protection;
- Issuance of birth and death certificates;
- WIC (Women, Infants, and Children) program;
- Facility security;
- Incident command and support for critical services.
Note that while health and safety inspections of health care facilities would continue, other health and safety inspections would cease.
Labor and Industry
The Department of Labor and Industry sent a memo to stakeholders on June 17, 2011, advising of the potential ramifications of a shutdown. In line with the governor’s recommendations, virtually all of the Department’s operations will cease.
Services that will not be provided if the court approves the governor’s recommendations include:
- No programmed (routine) OSHA inspections;
- No OSHA safety training or workplace safety consultations;
- No OSHA Safety Grants awarded to employers;
- No processing of apprenticeship applications or distribution of LEAP grants;
- No enforcement of minimum wage, prevailing wage or child labor laws;
- No regulation or enforcement of state workers' compensation laws;
- No vocational rehabilitation services provided to injured workers;
- No mediation or other attempted resolution of workers' compensation disputes;
- No registration or renewal of rehabilitation providers;
- No data processing of workers' compensation claims filings and other data;
- No collection or analysis of workplace safety data;
- No licensing of various trades, including plumbers, residential building contractors, electricians and building officials;
- No permits or requests for inspections processed;
- No routine electrical inspections (unless authority already delegated to local government unit);
- No routine plumbing, elevator, boiler or high-pressure-piping inspections (unless authority already delegated to local government);
- No state electrical safety inspections for carnivals, circuses, fairs and festivals;
- No plan review or approval of construction plans of state or licensed facilities and no construction inspections of such facilities where there is no delegation agreement with a local authority;
- No construction plan reviews or approvals for plumbing systems where there is no delegation agreement with a local authority;
- No processing of Contractor Recovery Fund applications;
- No regulation of manufactured housing and prefabricated buildings, including no plan reviews and specifications of prefabricated buildings;
- No telephone, email or other means of general assistance to stakeholders.
Workers’ Compensation benefits will continue under the governor’s plan, but with only 32 employees recommended to remain on after July 1, expect that all issues will be slow to resolve.
Department of Natural Resources
The Department of Natural Resources indicated that though they have begun contingency planning, any contingency documents are considered private and confidential. See Minn. Stat. § 13.37(a) (classifying all “business continuity plans and planning documents as private, non-public security documents”). The Department further indicated that current plans are speculative and subject to change depending on the court’s decision regarding which agency activities are critical.
According to Governor Dayton’s recommendations, the following activities are recommended to be continued:
- Conservation law enforcement;
- Water treatment;
- Bison herd care;
- Hatchery maintenance and tree nursery;
- Soudan mine maintenance;
- Pathology lab testing;
- Dam safety and operations;
- Dike/water control structure management;
- Incident command team including disaster response coordination;
- Support for critical services.
- State parks will remain closed for the duration of any shutdown.
Business Services (Secretary of State)
Secretary of State Mark Ritchie has outlined the potential issues created for business and election services in the event of a government shutdown on July 1. The following provides an overview of the Secretary of State’s concerns. It is unclear at this time which services, if any, may be deemed core functions by the Court. The full document by the Secretary of State can be viewed at: http://www.sos.state.mn.us/index.aspx?recordid=506&page=10.
- Entrepreneurs could not register a new business;
- Businesses would not be able to open bank accounts, commence business, or structure their business to avoid personal risk without appropriate documentation;
- Those interested in starting a business could not aggregate capital and solicit investments in order to undertake the business of their choice;
- Closure of the Secretary of State’s office may also impact bank financing and the purchase of property;
- Lending, and therefore business development, could be reduced significantly in Minnesota.
- Lenders, including but not limited to banks, could stop making loans because they would be unable to confirm that other lenders had no prior claim to the loan’s collateral; these lenders would also be unable to inform others that they had a claim on the loan’s collateral;
- Failure to provide service of process on corporations could mean that legal actions against businesses would be delayed and citizens, who have been harmed by businesses, could forfeit their rights through the expiration of the statutes of limitations;
- There could be a significant reduction in agricultural lending.
- Voters could face multiple barriers as a result of a possible shutdown. This is particularly important where there is a primary election, because absentee balloting begins on June 24, 2011; there are local elections in Minnesota every month during the rest of 2011.
- If the statewide voter database (SVRS) is unavailable to local election officials, voter registrations would not be processed, absentee ballots could not be efficiently administered, and polling place roster files could not be generated.
Adoption and Trade Services
In the event of the closure of the Secretary of State’s office, individuals may not be able to:
- Complete an overseas adoption;
- Travel abroad;
- Contract business overseas;
- Get married abroad; or
- Obtain academic credits for classes attended abroad.
- Property sales, including home sales, could be delayed because lenders may be unable to check the status of tax liens. Individuals who owe debts in the form of tax liens could transfer ownership and escape paying their tax debts, weakening debt rules.