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Minnesota Governor, GOP Have Deal to End Government Shutdown

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July 14: Gov. Mark Dayton speaks to the media at the University of Minnesota's Hubert H. Humphrey School after announcing he would seek a budget deal with GOP leaders in Minneapolis. (AP/The Star Tribune)

Minnesota's Democratic Gov. Mark Dayton and Republican legislators struck a deal Thursday to end a budget impasse that led to the longest state government shutdown in recent history.

The deal came after a three-hour negotiating session that followed major concessions by Dayton. If details are worked out and approved by state legislators, it would end a two-week shutdown.

The two sides agreed on a proposal that would raise $1.4 billion in new revenue, half by delaying state aid checks to school districts and the other half by selling tobacco payment bonds.

Dayton's concession was contingent on Republicans dropping a list of policy changes and a plan to cut the state workforce by 15 percent.

The date of the special session to officially end the shutdown has not been set. Some terms of the deal still need to be filled in.

"We're on a fast-track to getting this resolved permanently," Dayton said.

The governor, who had previously made raising taxes on high earners the centerpiece of his proposal to solve a $5 billion budget deficit, sounded weary earlier Thursday when he announced he would embrace the old GOP proposal.

After the deal was announced, both he and Republican leaders looked somber.

"No one's going to be happy with this, which is the essence of real compromise," Dayton said. "I think the people of Minnesota won today."

"This is an agreement that is, I think, difficult for both sides," Senate Majority Leader Amy Koch said.

The deal is contingent on approval by the Legislature, no easy task after an election in which a more conservative Republican caucus took power. But Koch said she believed rank-and-file legislators would approve it.