Minnesota's state government shut down at midnight on Thursday as Democratic Gov. Mark Dayton was unable to strike a budget compromise with the Republican-controlled legislature.

The standoff over how to close a $5 billion deficit followed a well-worn partisan storyline: Dayton wanted to raise taxes on the state's highest earners, while Republicans wanted to cut services. In the end, neither side got their way.

I cannot accept a Minnesota where elderly widows are denied the at-home services that permit them to remain healthy and able to live in their own homes, or a Minnesota where local governments have to further slash their firefighters and police forces, or a Minnesota where special education is being cut, so that millionaires do not have to pay one dollar more in taxes, Dayton said in a statement.

All but the state's essential services will close down, and the shutdown will cripple parts of Minnesota's tourism and leisure industry over the Fourth of July weekend, as roadside rest stops and public parks will be shuttered. The Department of Natural Resources estimated tourism losses of $12 million for each week the government is closed, and about 20,000 employees will subsist on unemployment insurance.

Republicans had offered a package that would have laid off teachers and other state workers while delaying about $700 million in payment to public schools, but deep cuts to health and human services spending ultimately scuttled the deal. Republican House Speaker Kurt Zellers said Dayton's plan would have saddled the state with unsustainable debt and said the governor threw in the towel as the time to make a deal expired.

This is about shutting down government for a political purpose, Zellers said. This is going to I think be one of those moments in our state's history that we'll look back on and be very disappointed.