Dayton, State Legislature Closer To Budget Deal As Deadline Looms

ST. PAUL, Minn. (AP) — Minnesota's Republican legislative leaders plan to make a second attempt at passing a budget that Gov. Mark Dayton hasn't approved, a maneuver that will test both the Democratic governor's resolve and the state's recent streak of requiring special sessions to finalize a budget.

The two sides have spent much of the week behind closed doors, chipping away at the differences between Dayton and the GOP for a $45 billion-plus spending package with a deadline at midnight Monday. With more than a $1 billion gap and objections about the scope of health care cuts, funding for preschool programs and other policy changes, they reported little progress.

House Speaker Kurt Daudt and Senate Majority Leader Paul Gazelka said the ticking clock forced their hand, announcing their own framework for a roughly $45.5 billion budget they hoped could win Dayton's signature. It contains $660 million in unspecified tax breaks — half of what their original budget called for — and enough money to boost funding for an overburdened state court system, a top priority for the governor. Their budget would also limit the scope of cuts to public health care programs Dayton had objected to by tapping funds from a separate health care account, a budgetary shift the GOP had previously resisted.

"This represents what we think is a real, true compromise," Daudt said.

But Dayton didn't quite see it that way, saying he was blindsided by the maneuver, which came after the two sides traded another round of offers and while he was attending a family member's funeral.

While he said the GOP proposal wasn't far off the mark in its funding for public schools, government agencies and other areas, he signaled he wouldn't accept the tax measures or transportation spending. The GOP's plan would put nearly three-quarters of the state's remaining $1.3 billion surplus toward tax cuts and road and bridge repairs. Dayton said removing that amount of money in state tax revenues would risk plunging the state back into recurring budget shortfalls.

"There's not enough room in the budget, even with the surplus, to have both the kind of tax cuts they want and the kind of transportation funding from the general fund," he said.

It's a repeat tactic from earlier this month, when the Legislature sent Dayton its own version of a slimmed-down, tax cut-heavy budget that Dayton promptly vetoed. Daudt stressed that the Legislature will have sent Dayton two complete budget packages before the Legislature adjourns Monday night.

But the speaker also said Friday's action was different, noting their concessions on tax cuts, education spending and more. Even as committees of lawmakers set off to start reassembling budget bills, he said they'd continue working with Dayton to tweak bills to get his final approval. The two sides planned to meet again Saturday morning.

"We have to start that process, but it doesn't mean that we won't continue to engage with the governor," Daudt said.

Their budget framework leaves $86 million unspent, money they could to help "fill in the gaps" and address any of Dayton's remaining priorities.

If the plan falls short and the Legislature requires an overtime session, it wouldn't be the first time. Lawmakers needed a one-day special session in 2015 to finish up several budget bills that Dayton vetoed. And the two sides would have more than a month to strike a final deal before a government shutdown would take hold on July 1.

But Republicans clearly felt a sense of urgency to start getting bills together and pass them before the midnight Monday deadline.

"It's Friday, whatever time it is now," an exasperated Gazelka joked. "We've got to get going."

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