Minnesota lawmakers, Gov. Dayton at odds as finish line nears

Minnesota's legislative session tipped into political dysfunction late Saturday, as disputes between DFL Gov. Mark Dayton and Republican legislators left in doubt a state income tax cut along with new state money for schools and legislative action on the opioid epidemic and elder care abuse.

"I'm not optimistic there's going to be a budget bill or a tax bill. I'm not optimistic I'm going to get education funding," Dayton said after a short, private meeting with Republican leaders. "I think this session has been a shambles."

Dayton — in his last legislative session as governor — has only Sunday left to somehow revive a deal. "The next year's Legislature and new governor are going to have to deal with some leftover, which I regret. I wanted to leave it clean and wrapped up, but it's not going to be, so they'll have to deal with that."

Dayton and GOP leaders traded offers at the Saturday night meeting, hoping to strike a deal that would give Republicans the income tax cuts they wanted and Dayton the additional money he sought for schools facing budget troubles. After the meeting, both sides said the other didn't go far enough.

"The governor used the word 'compromise,' but we can't throw it around as if there were real compromise in that tax proposal," said House Speaker Kurt Daudt, R-Crown.

The breakdown left Republican legislators planning for late-night floor sessions Saturday to pass a broad spending and policy bill that Dayton promised to veto. The governor also said he would veto any new tax bill, after already vetoing the GOP's initial effort Thursday. Additionally, Dayton also vetoed a bill to toughen penalties on protesters who block transportation routes, calling the measure's wording too vague.

"Once again, the governor has failed to support Minnesota's law enforcement community, putting them at serious risk," said Rep. Nick Zerwas, R-Elk River, who sponsored the measure.

Without a tax bill, Minnesotans will face massive headaches come next year's tax season. That's because, in addition to rate reductions on the lowest two income brackets, the GOP-crafted tax bill aligned Minnesota's tax code with major federal changes signed into law last year by President Donald Trump.

Tax experts have said it could be a confusing mess for tax filers to try to reconcile state taxes with the new federal code.

Also left undone if Dayton follows through on his vow to veto the budget-and-policy bill is new money for schools to improve safety measures in response to mass shootings, including the latest on Friday in Texas. Both parties agreed it's needed, but Dayton objected to its inclusion in the broader "omnibus" bill that may still include provisions to which he objects.

Republicans slashed some items from their bills in an attempt to win support from Dayton, who earlier outlined a list of problems with the expansive GOP bill.

Money for two other priorities, responding to the opioid epidemic and abuse in the elder-care system, was also to be in the budget and policy bill that Dayton said he'd veto.

One possible piece of legislation still in play, even as others looked imperiled, was a bonding bill for public works. Sen. Roger Chamberlain, R-Lino Lakes, said Saturday afternoon that negotiators were "very close" to striking a deal. Still, Dayton's proposed $1.5 billion bonding bill is about twice the amount sought by Republicans.

Because Dayton and lawmakers approved a two-year state budget last year, there's nothing they absolutely must do this year. But the heightened possibility of walking away from a three-month legislative session with few major accomplishments is a daunting prospect for state House members, with all 134 seats on the ballot in November.

For those legislators not in the top leadership jobs, the final days of a session involve a lot of waiting and, often, a lack of information. Republican Rep. Ron Kresha of Little Falls was optimistic that priorities like the tax and bonding bills would yet be finalized — although he expressed that hope before the outburst of acrimony late Saturday night — and he downplayed expectations for much else.

"This is not the year for big movements on things," Kresha said. "That's just the way it is. We all know that next year is when we really get back to work, so you do the best you can."

Negotiations on the big issues were complicated by maneuvering on a host of other high-profile items, from a proposed ban on using handheld phones while driving to the highway protests bill that Dayton vetoed Saturday night.

The massive omnibus measure facing Dayton's veto did get a late addition of a provision to tighten penalties for texting while driving — though falling short of requiring the use of hands-free devices. The bill includes money for opioid prevention efforts, to be paid for out of the general state treasury rather than through a tax on pharmaceuticals, as Dayton and a bipartisan group of lawmakers had originally sought.

A little over a week ago, seeking an alternative to the "penny-a-pill" tax, the Senate on a broad bipartisan vote approved a licensing fee on opioid manufacturers to be used to fund treatment and prevention efforts. But that measure also did not survive House-Senate negotiations, which seemingly angered some Senate Republicans.

"This was not a compromise. The House eviscerated the Senate bill," tweeted Sen. Scott Newman, R-Hutchinson.

With so many moving pieces, some lawmakers were pessimistic about the likelihood of compromise or action on many of the big topics. Rep. Laurie Halverson, DFL-Eagan, said Republicans in control of the House and Senate had blocked debate on issues she sees as priorities. She worried that complicated issues would be packed into bills that most lawmakers would have little time to read before a vote.

"There's so much that has been promised that is being left undone," she said. "Don't worry, we'll get to the opioid issue. Don't worry, we're going to get to elder abuse, the hands-free cellphone bill. [They are] pushing things off again and again and again."

Staff writer Jessie Van Berkel contributed to this report.

Erin Golden • 612-673-4790

J. Patrick Coolican • 651-925-5042