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Layoffs may be on the horizon for nearly 40,000 state employees

If a budget isn't approved, the state could shut down on July 1.

Thousands of State of Minnesota employees are being told to prepare for the possibility of mass layoffs should a government shutdown become a reality.

The Minnesota Legislature wrapped up this year's legislative session without passing a two-year budget. And while Gov. Tim Walz and leading lawmakers said they'd agreed to spending targets, all the hard policy work – meaning, what will actually be in the budget bills – still needs to be done.

The plan was for working groups to continue negotiating through June 4, with a special session starting June 14. That would give lawmakers time to pass the two-year budget before the June 30 deadline. If that doesn't happen, a government shutdown would begin July 1.

Over Memorial Day Weekend, state employees – of which there are about 40,000, making the state the second-largest employer in Minnesota – received letters outlining what to expect should a shutdown occur.

In short: Layoffs.

AFSCME Council 5 Executive Director Julie Bleyhl, said in an update Tuesday that such layoff notices are "very typical" if a budget isn't agreed to by June 1. And at this point, the union remains "optimistic" a shutdown won't happen.

Still, she acknowledged "we all need to be prepared for a potential shutdown," referencing the budget cuts proposed by the Republican-controlled Senate, which would come in at 5-7%. She called these reductions "harmful and arbitrary."

"You should never be treated as pawns in a political chess match and we need the Senate to drop their harmful proposals and come to an agreement with the House of Representatives and Governor Tim Walz to fully invest in public services and the workers who deliver them," she continued.

Senate Republicans have argued it's "perfectly reasonable" to ask the state government to "tighten its belt" by requiring each state agency to find 5% savings, suggesting many Minnesota families have had to do the same of late.

Walz, in a letter to employees who received the layoff notice, said he is "hopeful that this process is just a formality" on the way to a budget agreement in the month ahead. 

"I will continue to do everything I can to reach a balanced budget agreement in time to avert a shutdown," he added.

There have been two shutdowns in the past two decades - a partial shutdown in 2005 and 2011. But these overtime legislative sessions to bridge budget gaps are becoming commonplace. A special session has been needed to finalize and pass budget bills in four out of the past five budget years. 

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