Gov. Mark Dayton vetoes jobs, environment bills

Gov. Mark Dayton vetoed two major budget bills Saturday that would fund environmental protection and jobs programs, further complicating the state budget picture and the dynamics of a special legislative session that he is expected to call in the coming weeks.

The DFL governor already vetoed the education budget, the largest piece of the budget pie, demanding that the Legislature provide more funds for his signature prekindergarten proposal.

Dayton also made a public offer to House Republicans at a Saturday news conference: He asked for $650 million in new money for education, which is $250 million above what the Legislature passed, while also offering a temporary $250 million tax cut. He dropped his demand that the prekindergarten program be universal and lowered the cost about 40 percent.

"This is an attempt to give them something they want in exchange for something I want," he said.

The need to negotiate and pass environment and jobs bills means a more complicated special session, as those two budgets, taken together, add up to more than $750 million of the state's more than $40 billion budget, including money to deal with the bird flu outbreak. Just as important, both vetoed bills have contentious policy provisions related to energy and environmental regulation that have been the source of heated debate all year.

In his veto letter to House Speaker Kurt Daudt, R-Crown, Dayton said the environment bill "undermines decades of environmental protections."

His veto of the major jobs and economic development and energy bill was mostly related to what he said was inadequate funding of the Department of Commerce and a broad array of other agencies and programs including a rural broadband initiative.

Although Daudt did not immediately respond to Dayton's offer of a scaled-back prekindergarten program and a tax cut, he expressed disappointment in the vetoes while pledging to continue to work with him toward a solution.

The Dayton tax cut proposal comes from the Republican tax bill that would exempt the first $1,000 of income of every tax filer for two years, though Dayton cut the cost in half by proposing a one-year exemption. It would save $70 per single filer making $50,000 a year, more for those with dependents.

Dayton said he and Daudt will meet Tuesday to begin negotiations.

Other Republicans reacted swiftly to the vetoes.

"Minnesotans chose shared government last November and expect legislators as well as the governor to compromise and work together on the issues facing our state," Reps. Dave Baker, R-Willmar, and Dale Lueck, R-Aitkin, said in a joint statement.

The environment and energy bills were the outcome of a negotiated agreement between Daudt and Senate Majority Leader Tom Bakk, DFL-Cook, who finalized a budget deal and then pushed the Legislature to pass it in its final hours.

Bakk "looks forward to partnering with Gov. Dayton as they work together to resolve remaining challenges outlined today by the governor's veto letters," spokeswoman Alyssa Siems Roberson said Saturday.

The jobs budget bill funds the state's Department of Commerce and a host of programs intended to juice the Minnesota economy, while the environment budget bill pays for the Department of Natural Resources, the Pollution Control Agency and other key regulators of air, land and water.

The veto of the environment bill comes after a lengthy and complex negotiated agreement between Dayton and legislators on his most sought-after environmental proposal to require the state's waterways to be surrounded by buffer zones to protect them from pollutants. Despite agreeing to that deal, Dayton said he never consented to the many other provisions that would affect environmental regulation.

Dayton's veto letter on the environment lays out nine objections. Among them are taking money from a landfill cleanup fund; requiring a three-week notice before discretionary environmental reviews can be ordered of a regulated party; placing "lengthy, expensive and unnecessary" new steps in the rule-making process; allowing amnesty for polluters who self-report; and, eliminating the Pollution Control Agency's Citizens' Review Board, a group of Minnesotans appointed by the governor and confirmed by the Senate who have final say on the permitting of controversial projects, a board that has been in place since the late 1960s.

"Any regulatory agency that is universally popular with the people it regulates isn't doing its job," Dayton said.

His objections to the jobs and energy bill were more fiscally focused and dealt with the minutia of programs and agencies. He wants more money for health care personnel who determine if insurance rates are fair and actuarially sound; health care civil and criminal enforcement; the Securities Unit; the Fraud Bureau; the Bureau of Mediation Services; the Workers' Compensation Court of Appeals; the Department of Employment and Economic Development and the Minnesota Finance Agency to help people with disabilities or mental illness become economically independent.

Dayton said a plan to provide broadband to outstate Minnesota was inadequate and sidestepped the competitive bidding process by improperly earmarking a $2 million grant.

Dayton also signed a veterans and state government finance bill that funds a number of departments but wants language changed in the special session that State Auditor Rebecca Otto said will undermine her ability to audit local units of government.

Legislators will also likely take up a bill to authorize spending on Legacy programs for the arts and environment, which did not reach Dayton's desk, as well as a bonding bill. The House and Senate had two different bonding bills. Dayton said he is opposed to a Senate provision by Bakk that would authorize $7.2 million for an underground parking garage for 30 spaces on the grounds of the Capitol.