Gov. Mark Dayton signed the final three budget bills approved by the Legislature in the early hours of Saturday morning, ending the potential for a partial government shutdown that threatened the livelihoods of nearly 9,500 state workers.

Those final bills funded public schools, economic development and energy programs and the departments of agriculture and natural resources. He has signed three other bills as well: a $373 million public works bonding bill, Legacy legislation that distributes sales tax proceeds for clean water, natural resources, arts and cultural heritage initiatives, and a bill that makes technical corrections to other legislation.

"As I have noted before, a sign of true compromise is that no one is happy with it," Dayton said. He expressed dismay at the final version of the environmental protection bill that emerged from the Legislature, calling it "terrible."

He criticized Republicans for policy provisions that fellow DFLers attempted late Friday to undo, including the elimination of a citizens' board at the Minnesota Pollution Control Agency (MPCA).

"There won't be a citizens' board, which I regret," Dayton said, adding that he will champion environmentalists' causes moving forward.

One positive outcome of the special session, he said, "is that the remaining surplus, combined with the budgeted reserve and cash flow account, has left the state with a positive balance of almost $2.5 billion. It stands in welcome contrast to the financial uncertainties of recent years."

Despite the makeup of the Legislature — a Republican-led House and a DFL-led Senate — "legislators achieved significant progress," he said.

Tightly packed into temporary quarters for the special session because of massive renovations at the Capitol, Minnesota's political leaders worked into the early morning Saturday to finish voting on nearly half the $42 billion two-year state budget.

Their work, which began Friday morning, included a struggle over a spending and policy plan for environmental and agricultural programs, with the House and Senate volleying versions late into the night before it was approved, avoiding a state government shutdown.

Friday was a long and unusual day at the Capitol, with nearly 200 state senators and representatives — a handful was absent — jammed into two committee hearing rooms in the lower level of the State Office Building for the overtime session. Dayton had called the session Thursday night, summoning lawmakers to vote on replacements for three spending bills he vetoed at the end of last month's regular session.

The environmental protection bill, which pitted a coalition of DFL senators against their majority leader and the governor, carried Dayton's last priority from the regular session — a requirement that farmers install natural buffers along lakes, creeks and rivers to block pollutants. To retain that victory, after seeing his preschool and transportation proposals go down to defeat, Dayton was forced to make trade-offs with House Republicans to preserve the buffer language.

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Those concessions, which included elimination of the MPCA's Citizens' Board, deflated environmentalists and prompted Dayton's criticism on Saturday of the legislation as "terrible."

In floor speeches Friday, Sen. John Marty, DFL-Roseville, called the bill "environmental vandalism." Sen. Scott Dibble, DFL-Minneapolis, called it "a historic step backwards." The Citizens' Board was unusual in that it had a determining voice on regulatory decisions, and was seen as a vehicle for greater public involvement in environmental oversight.

Earlier Friday, House Republicans and DFLers bickered over the public schools funding bill that derailed the regular session on its last night, as the two sides fought over total spending. With a nearly $2 billion projected budget surplus this year, Dayton had sought a hefty school spending hike, including $350 million to provide universal prekindergarten classes at schools statewide.

Republicans first approved a $400 million school spending increase. Dayton eventually bargained them up to $525 million, but with no money for universal prekindergarten, and a much smaller sprinkling of cash for early learning programs. Most of the new money goes to 2 percent increases in each of the next two years in per-pupil state aid payments to schools.

Star Tribune staff writer Patrick Condon contributed to this report.

Ricardo Lopez • 651-925-5042

Gov. Mark Dayton said in a Saturday news conference that he will sign the final bills approved by the Legislature hours earlier, ending a budget stalemate that had gripped the state for nearly four weeks. (Star Tribune/The Minnesota Star Tribune)

Minnesota House aides and members chatted and chilled as the chamber was in recess. The session went well into the morning hours on Saturday. For more photos from the overnight session, visit startribune.com. (Star Tribune/The Minnesota Star Tribune)

Sen. Barb Goodwin didn’t wait to exhale after voting on the agriculture and environment bill was done. The bill wound up passing in its original form. (Star Tribune/The Minnesota Star Tribune)

Senator Paul E. Gazelka , assistant minority leader in the senate watched the voting on the agriculture and environment bill that wound up passing in its original form. (The Minnesota Star Tribune)