Minnesota, Leader in Youth Services, Has Shut Down (UPDATED JULY 7)

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Some youth programs in Minnesota are being threatened by a shutdown of the state government brought on by an impasse over the budget.

For the first time in more than three decades, Minnesota has a Democratic governor (Mark Dayton) and a Republican legislature. The two were unable to reach an agreement on 2012 spending by July 1, and the legislature has adjourned its regular session. Efforts to reach an agreement since July 1 have all failed, and some believe the shutdown could last all summer.

It is a scenario eerily reminiscent of the federal budget showdown for fiscal 2011, which nearly resulted in shutdown on two separate occasions because of the rift between House Republicans, the president and the Democratic-controlled Senate.

In Washington, both parties usually worry about getting blamed for a shutdown. But in Minnesota, it appears, both sides are willing to let the public decide who is right.

“Both sides are dug in and appear recalcitrant,” said Sarah Walker, COO of Minneapolis-based juvenile services provider 180 Degrees.

Gov. Dayton requested a court-ordered mediation on the budget, which Ramsey County Chief Judge Kathleen Gearin rejected. Gearin did consider a lawsuit filed by state Attorney General Lori Swanson, who asked for a court order to continue funding for crucial services, and then issued a list of state services that the court deemed essential. It maintains funds for all correctional facilities and child protective services workers, and includes funds for school districts and benefits for families.

The state freeze in turn halts funding for county agencies that serve children and families. Many of Minnesota’s youth services are performed by nonprofit providers who receive a significant amount of their funding from the counties, directly from the state, or from the federal government through the state.  

The shutdown leaves all of those funding streams in limbo. Currently, Walker said, “providers are being advised that if they continue to provide services during a shut down they are not guaranteed reimbursement.”

For healthy nonprofit organizations, a state shutdown would likely mean reliance on reserve funds or possible furloughs of employees. But for the many providers that have already been weakened by the recent economic downturn, a shutdown could either force them out of business immediately or spur layoffs and spending cuts that could place them on a path to closure.

Counties could fill the funding void for things that the state does not deem “essential” during a shutdown. In Hennepin County, the county board held a hearing to allow county agencies to make their cases for what should be kept open at all costs. The board also requested brief submissions from nonprofit leaders explaining what impact the state shutdown would have on their organization and their clients.

By most measures, Minnesota’s youth services normally are considered to among the best in the United States.

Since 2002, when the Annie E. Casey Foundation began publishing Kids Count ranking states by the overall wellness of their children, Minnesota has never been ranked below fourth; was ranked second six times, including last year; and was ranked number one in 2007. The state boasts the lowest percentages of 16- to 19-year-olds that are not in school and not working, based on data from 2008.