Gov. Mark Dayton, in an effort to break the stalemate that has shuttered the Capitol and brought state government to a screeching halt, today reversed himself. He agreed to the Republicans’ June 30 offer, which he rejected just before the shutdown deadline was reached at 12:01 a.m. on July 1.

Speaking before a collection of current and former of Hubert H. Humphrey public policy fellows—yours truly included—Dayton read a letter he sent to Republican legislative leaders. The letter said that he would reluctantly agree to, “although I do not agree with,” Republicans’ signed offer of June 30.

That offer bridges the $1.4 billion budget gap that shut down state government through two very Tim Pawlenty-styled maneuvers.

It borrows $700 million by increasing a shift in school aid funding. Far from balancing the budget, that move merely shifts education costs to the next biennium–an absolute replay of the Pawlenty years.

The GOP offer also would issue a $700 million bond against future tobacco revenues. In other words, the state would sell off to private investors its rights to collect on a massive settlement against tobacco companies, foregoing any possibility of collecting the proceeds of that settlement in the future. A one-time infusion of cash in exchange for years of lost revenue.

Dayton says that he will accept the deal with several conditions. First, Republicans must drop their demands that such hot-button social issues as abortion and stem-cell research bans be dropped from their demands. They must also drop a demand that 15 percent of state workers be arbitrarily fired. He also would require that the Legislature adopt a minimum $500 million bonding bill, which he positioned as a jobs bill. Dayton:

We started the session talking about jobs. Now we’re talking about numbers. But real people in Minnesota are not working who could be working right now if we would pass the bonding bill, as I proposed at the end of January. So I remain convinced, and most experts agree that this is a great way to stimulate economic growth throughout the state and put people back to work

However, as moderator Larry Jacobs noted at the session today, Republican leaders have already indicated that a bonding bill this year “would be inappropriate.”

Dayton, reading from his letter, appeared to signal that his change of heart came as a result of pressure from the citizenry, who he insisted agreed with his position that the budget should be balanced not strictly with budget cuts—the Republicans’ current position—but with a combination of cuts and increased taxes on the richest Minnesotans. Dayton:

During the past two weeks, I have been listening carefully to people throughout Minnesota. They are telling me that, overwhelmingly, they want this budget dispute resolved. While they strongly prefer my proposed solution to that of the Republican Legislature, more than anything, they want this government shutdown to end. Now.

In a stalemate that in so many other ways mirrors the budget showdown at the federal level, Dayton’s move is a seismic shift away from the approach of President Barack Obama. The president is working with similarly intransigent Republicans whose only answer to any fiscal problem is to never raise taxes on anyone evereverever. Last night, Obama stared those Republicans down, dared them to call his bluff, and got up and left the room.

Dayton, on the other hand, appears to have capitulated. Despite what he termed the “inadvisability” of the bill’s financing structure that he is now agreeing to, Dayton appeared to signal that Republicans had simply waited him out. Dayton:

“The reality as I see it, with no response for two weeks and no other proposals, that this is the only viable option that’s potentially available.”

This decision plays into the impression many of have him that he is driven by emotion and acts on impulse. It would seem that the pressure of causing personal pain to some Minnesotans as a result of the shutdown was too much for him to bear personally. And so he caved, indicating that while the deal was a bad one, it is better than an indefinite shutdown.

However, he did so at a point when the state’s business community was starting to pressure the GOP caucus to compromise on its no-taxes pledge in the state’s overall best interests.

At last report, Republicans had not responded to Dayton’s offer. It will be fascinating to see whether they will accept their own offer, or if they will stiffen even further, and insist that the budget must be balanced on program funds cuts alone. After all, their offer is now Dayton’s offer and they are therefore free to refuse it.

Will they snatch defeat from the jaws of the victory that Dayton has just handed them?

I doubt it. But I would not lay a bet on it.