Abortion rights activists picketed at the entrance of a tunnel that leads to the State Capitol and the Senate Office Building. (The Minnesota Star Tribune)

Just hours after DFL Gov. Mark Dayton and GOP legislative leaders shared breakfast Thursday, Dayton ripped into their priorities and threatened to veto budget measures if they include provisions related to abortion and other controversial social issues.

"It's not going to happen," the governor said.

House Speaker Kurt Daudt, R-Crown, said Dayton is being intransigent: "We need to see some compromise out of the governor. And we're not seeing that right now."

On Thursday, lawmakers tackled budget bills that illustrated the wide chasm between the GOP-controlled House and Dayton and his allies in the DFL-majority Senate. The Senate passed its bill, but the House voted to continue its marathon discussion past midnight.

Legislators arrived in St. Paul tasked with deciding what to do with a $900 million surplus and debating taxes and transportation, which were the unfinished business of the 2015 legislative session.

Those issues — and a traditional even-year borrowing package for infrastructure projects — remain largely untouched, while the House spent hours Thursday debating issues that break along party lines, including abortion, gun background checks and the status of MNsure, the state's health insurance exchange.

Republicans say MNsure has been a failure and their measure would seek to root out fraud and waste in public programs outlined in a recent public audit.

Dayton said he relented on a few policy provisions in 2015 because they were tucked inside key budget bills needed to keep state government running for two years.

Not this year, Dayton said, refusing any negotiation over GOP measures like restrictions on which bathrooms transgender people can use and the defunding of Planned Parenthood. He called these provisions "pandering to their extreme right wing base."

Daudt replied: "We had a very pleasant breakfast, and he didn't bring up any of those things to me, so I wonder if he was potentially doing it for the cameras. I don't know."

Daudt gave no indication of backing down. "We feel like we're in a great position because we're on the side of the public," he said, citing support for tax cuts and transportation spending that are at the heart of the GOP agenda.

Setting aside that verbal parrying between Dayton and Daudt, the House GOP and Senate DFL remain far apart with 25 days left in the session, as illustrated by the budget bills each body considered Thursday.

The GOP-led House took up health, human services, public safety and government operations, mostly holding the line on new spending.

The bill included a number of other provisions anathema to Dayton and the DFL, like ending MNsure and moving Minnesotans who use the health insurance program to the federal government's insurance exchange; cutting government salaries and travel; negotiating a sale or lease of a currently shuttered private prison in Appleton; and requiring licensing of abortion clinics, pulling state funding of Planned Parenthood and prohibiting state spending on abortions for low-income and disabled women.

The budget package passed by the Senate would allocate $85 million this year for outstate broadband Internet; add more than $100 million on education including spending on pre-K; and add money to an array of small programs like $5.5 million for the state film board to draw movie sets to Minnesota.

The Senate DFL is expected to release a significant borrowing package to pay for infrastructure projects early next week. Dayton has proposed a $1.4 billion bonding package. The Senate DFL's plan is expected to be the same or larger. The House GOP has said its bill will be $600 million. Passage requires votes from both parties because a supermajority is needed in both chambers. Senate Republicans say they want a smaller package, while House DFLers say a $600 million package will garner no votes from them.

Both sides have signaled a willingness to defend their position if the Legislature goes home without any deal on big-ticket items like taxes, transportation and bonding.

Daudt finished a news conference with pre-emptive blame for the other side. "If for some reason we leave here without accomplishing funding for roads and bridges, it will be because Democrats have laid down a line in the sand that they won't leave here unless we fund controversial trains in the metro area that are incredibly expensive and incredibly inefficient," he said, referring to DFL demands for money for the Southwest Corridor light-rail line.

Star Tribune reporter Patrick Condon contributed to this report. J. Patrick Coolican • 651-925-5042