July 3, 2011; Source: Star-Tribune | The state of Minnesota will be facing a stark reality if the government shutdown lasts. While legislators and the governor spar about where to cut expenses and find new revenue, the state will be losing millions in revenue and forced to pay millions more in expenses. A long shutdown may find businesses leaving and going to other states.

New state expenditures include unemployment and health insurance to over 22,000 state employees. It’s estimated that the state may be paying out $13 million to cover idle workers.

Loss of revenue will be felt in several areas:

  • It’s projected the state will lose $52 million in uncollected tax payments per month due to laying off a significant number of tax collectors.
  • Less commuters means the MnPass program for people willing to pay to use express lanes will lose $40,000 to $50,000 a week.
  • Revenue from gambling will decrease by about $2.3 million from weekly lottery sales.
  • The shutdown on July 1 meant that all state parks were closed over the July 4th weekend. Daily loss of state park campers and visitors could approach $200,000 for the weekend and $4 million if the shutdown continues to the end of July.
  • Road repairs and highway construction has ceased. More than 100 highway projects have been stopped. Expenses have not been determined.

Private agencies are also feeling the shutdown effects. Race tracks and casinos, which are regulated by the state, were forced to lay off hundreds of employees and shut down. Operators fear that horsemen will go somewhere else to race. The state receives more than $150,000 a month in fees and payroll taxes from one of the two racetracks.

Tom Stinson, state economist, notes, “My guess is that there will be some catch-up after workers are called back, but some revenue will be lost permanently.”

Are there any winners in this shutdown? Right now, it doesn’t look that way. Some of that lost revenue could go a long way to help nonprofit agencies and their clients.—Nancy Knoche