Private vendors also bracing for shutdown financial woes

The impending shutdown could impact tens of thousands of public sector employees, but private businesses and nonprofit organizations are also bracing for a significant financial hit. State officials have been warning thousands of outside contractors and vendors that their work and payments could end soon.

Gov. Mark Dayton is asking a Ramsey County judge to keep about 13,000 state workers on the job to deliver essential state services during a government shutdown. Dayton filed a court petition Wednesday in preparation of a potential shutdown that would begin July 1 if he doesn't reach a budget agreement with the Legislature.

The impact of a shutdown, as well as a court order, would be felt far beyond the state workforce. State government also pays private businesses and nonprofit agencies about $2.5 billion a year for various jobs and services. Hundreds of companies are currently working on construction, projects — including roads, bridges and public buildings — that would come to a halt in a shutdown.

Tim Worke, the highway division director for the Minnesota Chapter of Associated General Contractors, said a shutdown would hurt an already fragile construction sector.

The impact extends all the way out to a supplier network, folks who make everything ... all of these suppliers in the chain have employees as well.

"The most visible would be the impact on the construction workers and the payroll that those folks receive themselves," Worke said. "But beyond that, the impact extends all the way out to a supplier network, folks who make everything from concrete pipe to re-enforcing steel to bridge beams to hot-mix asphalt. All of these suppliers in the chain have employees as well."

Worke said the contractors he represents are growing uneasy and unsettled by the threat of a shutdown. He said they don't know if they should cancel supply orders or if they'll face penalties for missing project deadlines.

Other contractors are also wrestling with the unknowns of a shutdown. Louise Wolfgramm, president of Amicus, a Minneapolis nonprofit that is currently paid by the state to provide support services to prison inmates before and after their release, said she's been looking at ways to weather a shutdown with the least pain to her staff.

"We have been able to adjust our expenses in a way that will allow us to have the cash flow and the funds to get through the month of July, if necessary," Wolfgramm said. "If it goes beyond that, it's going to be a serious problem for us."

But even if the state payments end, Wolfgramm said she'll try to continue providing services to inmates during a shutdown.

Dan Cain, president of RS EDEN, is making a similar commitment. His social service agency gets paid by the state to provide substance abuse treatment, electronic monitoring and transitional housing. Cain said he'll tap other financial resources if necessary.

"We're not going to throw people out July 1. We're not going to make our stably housed homeless on July 1," Cain said. "And even though there is some pleasure in thinking about marching a bunch of sex offenders up to the Capitol and saying here, they're yours now, we probably won't stop electronic monitoring on July 1."

Under Gov. Dayton's recommendations to the court, community supervision and re-entry programs for offenders would continue during a shutdown. But the only construction projects would be emergency road repair.

Dayton said he gave the court the list of services he thinks should continue with "a heavy heart." He said he thinks virtually all state services are essential, but he said his recommendations were largely limited to those related to the protection of life and public safety.

"This is not about my personal preferences or my policy priorities," Dayton said. "This is about very, very hard, painful, difficult decisions based on what the constitution dictates."

Republican leaders criticized the DFL governor and his court filing. House Majority Leader Matt Dean, R-Dellwood, said a shutdown doesn't have to happen.

"We believe the shutdown is unnecessary," Dean said. "It is completely preventable within the budget that we have, and it involved tens of thousands of hardworking Minnesota employees, and also the people who utilize government."

It will be up to a judge to ultimately decide which services are essential. A hearing is scheduled for June 23