UPDATE: Shutdown to End? Dayton Willing to Accept GOP Budget, With Conditions

In a surprise announcement that shocked his audience, Gov. Mark Dayton said this morning that he is now prepared to accept—with a few provisos—the Republicans’ June 30 budget proposal in order to end the

Assuming , Dayton said he will call for a special session to bring legislators back and end the state government shutdown.

If Republican leaders respond favorably, the shutdown could end as early as today.

The governor also sent a to Senate Majority Leader Amy Koch and Speaker of the House Kurt Zellers on Thursday that said that while he doesn't necessarily agree with the method of resolving the budget impasse, he does think it's necessary to end the shutdown as soon as possible.

"I am willing to agree to something I do not agree with," Dayton wrote.

The June 30 Republican proposal closes the $1.4 billion budget difference by delaying payment of school funds and borrowing against the state's tobacco settlement. That will increase the school aid shift by $700 million and sell $700 million in tobacco bonds to close the budget gap.

But Dayton also said he had three conditions if he's to accept the Republicans' June 30 budget solution, and those might prove to be a substantial stumbling block.

The GOP, Dayton said, would have to take all policy issues off the table for the time being; drop a 15 percent, across-the-board reduction in the number of employees at all agencies, regardless of their funding source; and after all the budget issues have been resolved in a special session, the GOP must support and pass a bonding bill of at least $500 million next session.

Senate GOP spokesman Michael Bordkob told the Star Tribune that Senate Republican leaders were "still studying Dayton's offer, and were not ready to comment."

The governor has said he will be meeting with Republican leaders in his office at 2 p.m.

But in a hint that some GOP leaders may not accept the offer, State Sen. Dave Thompson (R-District 36) of Lakeville, said on his Twitter page: "Let's be clear. Governor did NOT 'accept' the June 30 offer. He has simply attached new conditions to the June 30 framework.

The move signals, though, that Dayton has all but dropped his plan to raise taxes on the roughly 7,700 Minnesotan's making more than $1 million annually.

Dayton made the surprise announcement while speaking before alumni at the University of Minnesota’s Hubert H. Humphrey Institute of Public Affairs. During the speech, the governor read the he sent to Koch and Zellers.

“During the past two weeks, I have been listening carefully to people throughout Minnesota … they want this budget dispute resolved. While they strongly prefer my proposed solution to that of the Republican legislature … they want this government shutdown to end. Now,” he said.

A statewide government shutdown began July 1.

Listen to the press conference here, courtesy of MPR.

Video, courtesy of our friends at The Uptake, can also be watched here.

Lakeville Patch will have more as the story develops.

All told:

Details of the GOP June 30 offer include:

• Shift school aid payments from 70/30 to 60/40 ($700 million)
• Issue tobacco bonds to cover remaining gap (to be determined)
• Increase per student formula by $50 per year to cover additional borrowing costs ($128 million)
• Add $10 million to University of Minnesota to equalize reductions with MnSCU ($60 million)
• Restore funding to Department of Human Rights and Trade Office