State Could Pay Out Millions with Gov’t Shutdown

The state is reportedly required to issue severance payments and cash for unused time off to the 36,000 employees that could be laid off under a government shutdown this summer-which will cost the state millions.

If a government shutdown occurs at the beginning of next month, the state could be doling out millions of dollars in payments to employees who will be out of work.

According to the Star Tribune, union contracts require the state to issue severance payments and cash for unused time off to the roughly 36,000 employees that will be laid off if a shutdown occurs-resulting in “a multimillion-dollar payout.”

Union officials told the Minneapolis newspaper that if the state shuts down on July 1, it would be the largest layoff in the state's history, adding that state employees would receive the payouts with their July 15 paychecks if a shutdown occurs.

Jim Schowalter, commissioner of the state's Management and Budget agency, told the Star Tribune that he was not sure how much the shutdown will cost the state in terms of fulfilling union contracts.

“I don't want to give people half an answer,” he told the newspaper. “I don't want to give you what could happen at this point. I do understand that's an important issue for employees and we are going to get it solved.”

At issue is how to solve the state's $5 million two-year budget deficit. According to the Star Tribune, Governor Dayton wants to spend about $36 billion over the next two years and raise about $1.8 billion in taxes, while Republicans want to spend $34 billion and reject all tax increases.

An agreement about the state's budget deficit must be reached by June 30.

Click here to read more in the Star Tribune about the possible government shutdown.