Dayton seeks spending for U, buildings and transit in special session; puts tax bill on hold

Gov. Mark Dayton said Wednesday that his price for summoning state legislators back to St. Paul is nearly a quarter of a billion dollars in additional spending over the next three years, and almost as much in additional borrowing for public construction projects.

Dayton's list of spending and bonding demands primarily benefits public colleges and universities, transit in the Twin Cities metropolitan area, economic development initiatives and the state security hospital in St. Peter, along with a handful of smaller projects, including Fort Snelling renovations.

The DFL governor said legislative leaders must agree in writing to these conditions before he would call them back for a special session, which many lawmakers want in order to take another shot at passing a construction bonding bill that stalled in the session's final minutes last month.

"These are my requirements," Dayton said at a news conference. "Not to satisfy me, but for the needs of Minnesota."

While many Republican legislators have been among those calling for a special session, Dayton could struggle to get them behind that much additional spending. House Speaker Kurt Daudt, R-Crown, predicted it would go over "like a lead balloon" with his Republican colleagues. Senate Minority Leader David Hann, R-Eden Prairie, was even more dismissive. "I cannot agree to your multi-page list of nonnegotiable spending demands," Hann wrote to Dayton. "This can only be interpreted as an attempt to scuttle the compromises reached by the Legislature on major bills passed this session."

Daudt was a bit more conciliatory, declining to categorically refuse Dayton's requests and saying he wanted to hear more details from the governor.

Separately on Wednesday, Dayton signed off on $182 million in new state spending over the next 13 months with recipients that include prekindergarten programs at public schools, rural broadband expansion efforts and programs intended to eliminate racial economic disparities.

But Dayton put a hold on $260 million in tax relief for targeted constituencies that include rural property owners, child care customers, college debt holders and student loan applicants, veterans and cigarette smokers. That's because the 150-page tax bill that laid out those provisions included a drafting error that the Dayton administration believes, if enacted, would cost $101 million and drain a funding stream for the state's contribution to the Minnesota Vikings stadium.

The error itself was small: an "or" where there should have been an "and."

But Dayton says his advisers believe it would take another legislative vote to correct it. He also wants one provision added to the tax bill: reinstatement of a sales tax exemption for the Minnesota State High School League (MSHSL) that has been used to fund scholarships for low-income student athletes.

Daudt said House Republicans are on board with those changes. He urged Dayton to sign the tax bill; he has until next Monday to do so.

"Once he's done that, we are happy to visit with him about the other provisions in his bill," Daudt said. If Dayton and lawmakers can't reach a wider agreement, Daudt said, he's also willing to hold a special session simply to fix the tax bill error and reinstate the MSHSL exemption.

In all, Dayton wants lawmakers to sign off on an additional $240 million in spending in the next three years, above the $415 million they already authorized for that time period during the recently ended session. He also wants them to tack on an additional $183 million in bonding projects to the roughly $1 billion borrowing bill that collapsed on the last night of the session.

That bonding bill included about $300 million in cash for a list of road and bridge construction projects; Dayton says he wants some of those projects replaced with others that have been higher on Department of Transportation planning lists. He also wants the Legislature to boost funding for Twin Cities transit, and in a way that would accommodate the raising of a $135 million local share for the Southwest Light Rail Transit project.

The solution does not need to involve state money, but must at a minimum authorize the Metropolitan Council to raise funds from metro-area taxpayers, he said.

Some of Dayton's larger specific requests include:

• $67 million in bonding for a new health sciences building at the University of Minnesota, and $32 million more spending over three years for health training at the school.

• $28 million in bonding for repairs and replacements at Minnesota State Colleges and Universities campuses, and $12 million specifically to build a new learning center at Bemidji State University.

• $41 million over the next three years for the Minnesota Investment Fund and Job Creation Fund, which he called "two of Minnesota's most effective economic development tools."

• $99 million in the next three years to boost staffing at the St. Peter Security Hospital, and $14.5 million for the Minnesota Sex Offender Program to ramp up its efforts to prepare some offenders for less restrictive settings.

• $34 for design and construction costs for Fort Snelling to close and replace its visitor center in preparation for its 2020 bicentennial.

The spending package that Dayton did sign on Wednesday includes $25 million for the voluntary prekindergarten program, which has been a top priority for the governor in his second term. The administration said it would help about 3,700 additional 4-year-olds "gain access to high-quality preschool programs in school districts that choose to offer it," according to a news release.

A couple of other Dayton administration priorities also got funding, although at a lower level than he requested: $35 million to improve high-speed Internet access in rural communities, and $35 million for programs aimed at shrinking gaps in income and economic opportunity between white and nonwhite Minnesotans.

Patrick Condon • 651-925-5049