Mediation between Dayton, legislative leaders breaks down

Court-ordered mediation between Gov. Mark Dayton and Republican legislative leaders collapsed Friday, ending hopes that their lengthy, expensive legal battle would end soon.

The mediation, ordered by the state Supreme Court, was short-lived. The DFL governor and GOP leaders met for a day and a half before Dayton announced that no progress could be made in the stalemate over his line-item veto of the House and Senate budgets. The mediator agreed.

"After the parties expended significant efforts and exchanged proposals through a full day of mediation on [Thursday] and a half day on [Friday], I concluded that the mediation was at impasse, the understandable views of the parties being irreconcilable," said Rick Solum, the retired judge and trial attorney who had attempted to broker a deal.

Friday afternoon, both sides blasted each other in hastily called news conferences, revisiting arguments over budget bills and tax cuts that have divided them since May, and which prompted Dayton's veto. House Speaker Kurt Daudt, R-Crown, and Senate Majority Leader Paul Gazelka, R-Nisswa, said Dayton was wrong to walk out of the talks, and wrong to have threatened the legislative branch by vetoing its funding amid the budget dispute.

Dayton, meanwhile, accused GOP leaders of drawing him, the state, and the Minnesota Supreme Court into a "charade" in which they'd concealed information about the Legislature's budget to try to score political points.

"I was angry," Dayton said of how the mediation session ended, "and I told them why. I have never, ever, ever, in my 40 years of government, seen this kind of duplicity."

A short time later, Daudt fired back, charging that it was the governor who hadn't made his motives clear.

"It seemed like [Dayton] was angry that he wasn't successful at completely eliminating the Legislature," Daudt said.

Both sides expressed uncertainty about what comes next. Later Friday afternoon, they filed a short joint statement with the Minnesota Supreme Court, noting that the mediation sessions had failed.

Now, the court will weigh how to move forward; earlier this month it found that Dayton's veto was allowed under the state Constitution, but did not formally rule on whether that veto — and its cut to state House and Senate funding — would stand.

In the meantime, Daudt and Gazelka said they are sorting out how to keep the Legislature running without new money coming in.

While they said as recently as last week that the governor's veto would force the Senate to shut down Dec. 1 and the House to close Feb. 1, the GOP leaders now say they believe the Legislature has enough cash on hand to survive until Feb. 20, the start of the next legislative session. At that point, the full Legislature could attempt to override Dayton's veto and restore its full budget, though it's less than clear whether the Republicans could muster votes from DFL lawmakers that would be needed to do that.

"We're hoping that the courts don't force us into extraordinary measures," Gazelka said. "We don't think that's in the best interest of Minnesotans."

Leaders said those "extraordinary measures" could include layoffs of some of the hundreds of legislative employees and reduced per diem and travel allotments for the 201 state lawmakers. The Senate has temporarily stopped sending its members on tours of potential bonding projects across the state.

The legislative leaders said the updated funding estimates reflect new numbers provided by the state's budget office, along with plans to cut costs. But Dayton charged that the legislative leaders deliberately hid that information as they tried to persuade the court system and the state's residents that the governor's veto would shut down that branch of government much sooner.

"That infuriates me, it deeply offends me, because it just violates all the principles on which I try to conduct myself in public life," Dayton said, "which is to be honest and straightforward. And to carry this on for four months, to subject taxpayers to several hundred thousand dollars in legal fees, when they had known ... that they had the moneys available to them."

The full cost of the legal dispute is still unknown, but Dayton's office had been billed for $245,000 in legal fees through the end of August. The Legislature will get its own legal bill at the end of the dispute. The approximately 12 hours of mediation cost at least $1,088 per hour in legal fees, between the hourly rates for the mediator and the two sides' lead attorneys.

Dayton and the legislative leaders said there were attempts in mediation to discuss the handful of issues that Dayton hoped to raise by issuing his veto months earlier.

But both sides found little room for agreement on a handful of issues that includes tax cuts related to cigarettes and estates, teacher licensing standards and driver's licenses for undocumented immigrants.

The mediation apparently veered into a re-litigation of the differences on those issues and of the budget wrangling that sparked the legal battle. Dayton pointed to lawmakers placing a "poison pill" in the tax bill — a requirement that he sign it if he wanted to fund the state Department of Revenue. GOP leaders noted, again, that Dayton signed all of the bills before vetoing the Legislature's funding to try to reopen negotiations.

The news conferences held Friday took a similar path. At one point, Daudt pulled his cellphone from his pocket, scrolling through to read a four-month-old text message from Dayton's Chief of Staff Jaime Tincher, in which Tincher apparently agreed to the terms of the tax bill.

Dayton pledged to continue to raise the issues linked to his veto — tax cuts, teacher licensing and others — in the next legislative session.

Erin Golden • 612-673-4790