With no budget deal in place, the state government shut down at midnight, forcing more than 22,000 state employees out of work, halting highway construction projects and closing state parks and rest stops.
Only the state government functions deemed critical by a Ramsey County judge are continuing as usual.
A shutdown seemed all but certain late Thursday night when Republican legislative leaders and DFL Gov. Mark Dayton broke off negotiations. Both sides showed few outward signs of progress toward closing a $5 billion budget gap for the next two-year budget cycle, which begins Friday.
Dayton and Republican lawmakers held separate news conferences Thursday night. Both sides argued that they were not responsible for the failure to reach a budget agreement.
Dayton blamed Republicans for refusing to accept tax increases to close the state's $5 billion budget gap, while Republicans said Dayton should agree to a "lights on" bill to keep the government functioning for ten more days.
Republican leaders delivered the temporary funding proposal to the governor's office Thursday night.
"The answer to the shutdown is now in the governor's office," said Republican Senate Majority Leader Amy Koch, R-Buffalo, at a news conference a few minutes later.
Dayton refused to sign the bill, calling it a "publicity stunt" designed to shift blame for the stalemate. The DFL governor, speaking at a news conference at the Capitol, said he offered two budget proposals Thursday, but both were rejected by Republican lawmakers.
"This is a night of deep sorrow for me because I don't want to see this shutdown occur," he said.
The governor has proposed raising taxes on the wealthiest Minnesotans to support more spending, but Republicans have rejected the plan. The Legislature passed a $34 billion budget with no tax increases, but Dayton vetoed it.
On Thursday, Dayton said he offered additional spending cuts and then proposed raising taxes only on the roughly 7,700 Minnesotans who earn more than $1 million a year. Republicans, he said, rejected the proposals.
Instead, he said Republican lawmakers offered a $1 billion revenue raising option that consisted of delaying $700 million in payments to schools and borrowing against funds from the state's tobacco companies' settlement. Dayton said he rejected those options as not really raising revenue.