Gov. Mark Dayton vetoes tax, spending bills

Gov. Mark Dayton on Wednesday vetoed two measures that together comprised much of the work of this year's Legislature, leaving the DFL governor few accomplishments for his last year in office and Republican leaders with little to show for three months of work.

Dayton's vetoes killed tax cuts for the two lowest income brackets and Minnesota businesses, along with a state-federal tax code alignment intended to prevent major filing headaches for Minnesotans next year. Also dead is additional money for public schools and for treatment and prevention programs meant to address the opioid-addiction epidemic.

The DFL governor had warned GOP legislative leaders in the final days of session that the vetoes were likely. Legislators passed the bills anyway and publicly asked him to reconsider. With just over seven months left in office, Dayton's relationship with the Republicans who control the Legislature may have reached an all-time low.

"This session was not about working out agreements with me," Dayton said Wednesday. "It wasn't even about working out the best interest of the people of Minnesota. It was about the House Republicans cozying up to the moneyed special interests."

Republicans were even more withering in response.

"This session wasn't a failure. Our governor was a failure," said House Speaker Kurt Daudt, R-Crown. Sen. Roger Chamberlain, R-Lino Lakes, chairman of the Senate Taxes Committee, said in a news release that Dayton "behaved like a toddler — emotional, impulsive and unreasonable."

Republicans noted that the tax bill Dayton vetoed would have meant savings for many Minnesotans and shielded others from the tax increases that are expected to result from last year's major changes to the federal tax code.

Dayton said the Legislature's tax bill would benefit multinational corporations at the expense of families.

In the final weeks of the session, Dayton's main focus was securing $138 million in additional funding for school districts, some of which are facing budget gaps. Lawmakers instead voted to allow schools to access $225 million mostly from existing state accounts that support teacher training and community education.

"It's not new money," Dayton said of the Republican plan. "It's just robbing from one pot and putting it into another."

The tax plan and the nearly 1,000-page spending and policy bill that Dayton vetoed did include measures the governor supported. It would have dedicated $16 million to opioid-addiction treatment and prevention, and it included money to fix the state's problematic vehicle licensing and registration system. It included some small changes to state regulation of elder-care facilities following stories of abuse, although critics called the measures toothless. It would have allowed the Minnesota secretary of state to access more than $6 million in federal money for election cybersecurity.

Dayton said some of those provisions reflected the undue influence of special interests. The money for opioid treatment came from the state's general fund, despite support by Dayton and legislators from both parties for a new tax or fee on pharmaceutical companies.

The elder-care provisions were weaker than advocates wanted and faced pushback from the nursing home industry. Dayton also criticized Republican leaders' unwillingness to consider new restrictions on gun sales such as background checks, which according to a recent Star Tribune Minnesota Poll are broadly supported by Minnesotans.

The vetoes also bring consequences such as a 7 percent cut for disability services. Dozens showed up at the Capitol in response on Wednesday, including Julie Weaver and her son Charles. He has a new job that he loves at Anoka County, Julie Weaver said, and she fears he could now lose it.

"Instead of helping get more people with disabilities employed, I can't see any way a 7 percent cut is going to help," she said. "We have to keep fighting."

The number of disparate policy and spending proposals crammed into the voluminous spending bill angered Dayton. He found 117 items he opposed in it. Legislators attempted to work through those concerns in the final days of the session and said they removed more than half the items Dayton found objectionable.

But Dayton suggested a political motive by House Republicans, who are defending their majority in this November's election.

"They wanted to be at an impasse," Dayton said. "They wanted to go out and blame on me everything people rightfully wanted and should have received."

Senate Majority Leader Paul Gazelka, R-Nisswa, said lawmakers added so many items in part because they were short on time but also to entice Dayton to pass it.

"In the end this time, nobody got what they wanted and Minnesota is the one that suffers," Gazelka said.

Dayton has not yet made a decision on a public works infrastructure borrowing bill. It's backed by $825 million in general obligation bonds and another $675 million from other accounts. It would fund repairs and construction of local roads, water systems and college and university buildings, and it includes money for school safety measures. To the frustration of DFL lawmakers, it does not include transit projects.

Dayton said again Wednesday that he would not call a special session to try to revive the tax or spending plans. But Dayton and Gazelka said they might be open to a special session after the November election, to try again to at least align the state tax code and its federal counterpart in hopes of easing the burden on filers next year.

Revenue Commissioner Cynthia Bauerly said Wednesday her office will update the tax filing system to accommodate the differences between state and federal tax laws. She said they will make sure taxpayers and others have the information and services they need to file.

Jessie Van Berkel • 612-925-5044