Home > Member Services > Question of the Month > November 2007


Question of the Month

November 2007

What happens in the Midwestern states when a fiscal year begins without a budget in place?

Over the past three years, this situation has arisen in two Midwestern states, and it came within hours of occurring this fall in a third.

In most cases, based on statutory or constitutional language requiring that appropriations be authorized by the legislature, some type of government shutdown occurs when the fiscal year or biennium begins without a budget agreement in place (the extent of the shutdown often is decided by the executive branch and/or the courts).

The lone exception in the Midwest is Wisconsin. There, state government continues to operate at previously authorized levels of appropriations. While this law eliminates the chances of a government shutdown, it also removes an incentive for getting a budget deal done.

During its first few months of the new biennium, which began July 1, Wisconsin operated without a new budget. Concerns about the legislative stalemate have led some lawmakers to call for a statutory change that makes a shutdown possible.

In 2005, state government in Minnesota partially closed because of a budget impasse between legislators and Gov. Tim Pawlenty.

The shutdown of government services in that state was only "partial" for two reasons. First, the Legislature had passed a separate bill to fund state parks, public safety and colleges. Second, a Minnesota district court ruled that essential services must be funded. An ex-Supreme Court judge was then brought in to help determine what services were "essential." Questions linger in Minnesota over whether the court had the constitutional authority to order the funding of services without legislative approval.

This year, a government shutdown was a real possibility in Michigan. Lawmakers there finally reached a budget deal early in the morning on the first day of the fiscal year, Oct. 1. The near-miss led Gov. Jennifer Granholm to develop and release a plan on the extent of the shutdown. About 35,000 employees would have stopped working, including many state police. Some officers would have stayed on duty, and certain other functions (the staffing of state prisons, for example) considered fundamental to public health and safety would have continued.

In many other Midwestern states, the chances of a shutdown are highly unlikely, in part because the legislatures adjourn months before the beginning of their respective fiscal years.

Return to Question of the Month



For more information, contact:
CSG Midwest


The Council of State Governments  Midwestern Office
 701 East 22nd Street 
·  Suite 110  ·   Lombard, Illinois 60148
Tel: 630/925-1922 
·  Fax: 630/925-1930·  E-mail: csgm@csg.org