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Update: Gov. Dayton signs budget agreement, shutdown ends

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ST. PAUL, Minn. (AP) -- Minnesota Gov. Mark Dayton signed a new budget Wednesday, ending the nation's longest state government shutdown in the past decade.

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Dayton's signature came just hours after lawmakers gave their own approval to the deal after meeting in special session that started Tuesday afternoon and lasted until early Wednesday morning. All sides formalized an agreement that Dayton struck with leading Republicans late last week.

The two sides argued bitterly over taxes and spending for months. When government shut down July 1, it closed state parks and rest stops, laid off 22,000 state employees, stopped road projects and much more.

The end to the shutdown began when Dayton moved last week to accept a borrowing plan offered by the GOP shortly before the stoppage began.

After signing the budget, Dayton said he was "not entirely happy" with it.

"It's not what I wanted, but it's the best option that was available and would be for any time," he said. Dayton said the budget "gets Minnesota back to work."

Details were still emerging Wednesday about how quickly state operations would restart.

A day earlier, Tina Smith, Dayton's chief of staff, told reporters that state employees would get 24-hour notice before reporting back to their jobs.

Jim Schowalter, the state's budget commissioner, added that it will take longer to restart some state agencies than others since some have continued partial operations during the shutdown. He predicted it would take weeks for agencies to work through paperwork backlogs, clean up parks and other sites and return to normal operations.

"There is a backload of work," Schowalter said. "There is a backload of issues that are going to have to be addressed."

His division had earlier estimated that the state was losing millions of dollars, including lost revenue from lottery sales, tax audits and state park fees, money spent preparing to shut down and the cost of unemployment and health benefits for laid-off workers. The full cost wasn't expected to be known for some time.

The budget was widely panned for setting up a new problem down the road. It borrows money from schools and from future payments on a legal settlement with tobacco companies to erase a $5 billion deficit through mid-2013. Republicans and Democrats have been at odds for years over how to address persistent deficits, with GOP leaders pushing for deeper spending cuts and Democrats arguing for new taxes.

It includes slightly more than $1.3 billion in new revenue from delaying $700 million in state aid checks to schools and borrowing $640 million against future payments from the tobacco settlement. The budget also continues a previous delay in school payments worth $1.4 billion and eliminates the rest of the shortfall through cuts in projected spending.

Minnesota became a national example of political dysfunction, mirroring in miniature the partisan standoff in Washington over raising the debt ceiling. State leaders are more accustomed to being recognized for efficiency and innovation.

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Associated Press writer Patrick Condon contributed to this report.

Update 9 a.m.: Gov. Dayton signs budget, ends state shutdown

ST. PAUL, Minn. - Minnesota Gov. Mark Dayton has signed a new budget that ends the nation's longest state government shutdown in the past decade.

Dayton's signature came Wednesday after lawmakers met in special session starting Tuesday afternoon to give their own approval to the deal. All sides formalized an agreement that Dayton struck with leading Republicans late last week.

The two sides argued bitterly over taxes and spending for months. When government shut down July 1, it closed state parks and rest stops, laid off 22,000 state employees, stopped road projects and much more.

The end to the shutdown began when Dayton moved last week to accept a borrowing plan offered by the GOP shortly before the stoppage began.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.

Minnesota Gov. Mark Dayton plans to sign budget bills on Wednesday that would end a nearly three-week state government shutdown and put thousands of public employees back to work.

Dayton's signature on the budget bills will formally end the 20-day shutdown, the nation's longest by a state government in a decade. But officials in his administration cautioned that they will need time to call 22,000 state employees back to work, reopen state parks, restart road work and get back to normal.

The Democratic governor is scheduled to sign the legislation at 9 a.m., which would be less than six hours after lawmakers finished voting on it during a special session that began Tuesday afternoon. His signature will formalize an agreement he reached with key Republican legislative leaders last week.

Once back on the job, state workers will re-open state parks, restart highway construction projects and turn the state lottery back on. They'll also get back to issuing drivers licenses and permits for alcohol sales, and get dozens of other government services going again.

Dayton Chief of Staff Tina Smith said a day earlier that state employees would get 24-hour notice before returning to work, likely on Thursday. Top Dayton adviser Jim Schowalter told reporters it could take weeks to work through paperwork backlogs and clean up parks and other sites.

The shutdown dented Minnesota's reputation for good government. Democrats and Republicans had for months argued bitterly over taxes and spending, and the impasse became a crisis when government shut down July 1 because no budget was approved.

In the end, Dayton gave up on tax increases but Republicans in turn agreed to soften spending cuts with $1.4 billion in new revenue by delaying state aid payments to schools and borrowing against future payments from a legal settlement with tobacco companies.

"This represents a compromise," said Sen. Julianne Ortman, R-Chanhassen, as she argued in favor of the tobacco borrowing. "I think there are 201 of us plus a governor who would say this isn't our best option on how to proceed, but it is the best option for bringing Minnesota government back to work."

In less than 12 hours, lawmakers passed nine budget bills that together fund all major state operations. Individually, many of the bills stretched to hundreds of pages, leaving legislative Democrats to complain they were voting based on little knowledge of what was contained within.

While praising Dayton for agreeing to a compromise that would end the shutdown, Democrats - who were relegated to House and Senate minorities in last November's election - said the Republicans' decision to lean on tobacco borrowing and the school aid delay was delaying a permanent solution to Minnesota's persistent budget deficits.

"It simply defers important budget decisions into the future," said Rep. Frank Hornstein, a Minneapolis Democrat. He and colleagues complained that the bills would force tuition increases for college students, painful cuts to recipients of social services, pressure on local governments to raise property taxes and other consequences.

Legislative leaders and Dayton agreed before the votes began to limit the scope of the special session and lawmakers' ability to tinker with the bills in an effort to keep the budget pact from unraveling once legislators get involved. The Minnesota Vikings' longstanding push for partial public funding of a new stadium did not come up in the brief special session.

During floor debate, Republicans tweaked Democrats for voting against the only available option to end the shutdown. A vote against the budget bills "is a vote to continue the shutdown," said House Majority Leader Matt Dean, R-Dellwood.

In addition to the nine budget bills, lawmakers approved a pension bill and legislation allocating dedicated sales tax money to outdoors and cultural programs. They approved a $498 million construction bonding projects bill that includes $51 million for a new physics building at the University of Minnesota, $42 million for a new science and engineering laboratory at St. Cloud State University, $50 million for flood control projects around the state, and $56 million for transportation projects with more than half to local bridge replacement and repairs.

While Democrats bemoaned the spending bills as not generous enough, some conservative Republicans had resisted to committing their support after months in which they insisted no new revenue was needed in the next state budget. But in the end, House Republicans held together on all the budget bills while Senate Republicans suffered only a few defections on a handful of the bills.

Dayton said Tuesday he was relieved to see an end to the shutdown on the horizon.

"Everyone will look at this, including ourselves, and say, `Well, we didn't have this, we don't have that, we have this we don't want, we have that we don't want' - that's just the essence of compromise," Dayton said.

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Associated Press writer Patrick Condon contributed to this report.

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