Policy battles between Dayton, GOP threaten to derail state budget

Gov. Mark Dayton and Republican lawmakers have exactly one week to agree on billions of dollars in state spending, but that's not the only huge dispute sitting between the state's political leaders and a timely end to the legislative session.

"If we focus this last week on our budget differences, we'll resolve those differences and the Legislature can end on time," Dayton told the Star Tribune on Monday. But the DFL governor said for that to happen, Republicans must stop insisting on more than 600 policy changes currently tucked inside hundreds of pages of GOP-crafted spending bills.

At issue are Republican measures to delay implementation of Dayton's treasured water-quality "buffer" law, lessen seniority as a factor in teacher layoffs at public schools, change the structure of the Metropolitan Council, eliminate the MNsure state health insurance exchange, and toughen legal penalties for protesters that block interstate freeways, among many others.

And on Monday, GOP legislative leaders renewed a vow to keep pushing perhaps their most controversial policy change of the session, the bill to block cities from setting their own minimum wage and sick-leave rules.

If Republicans don't drop those measures and talk spending, Dayton said, "We'll be negotiating until January."

The impasse comes at a pivotal time. Spending talks between Dayton and GOP leaders have slowed in recent days as the May 22 deadline approaches. Failure to strike a spending deal by then would force a special legislative session and start a countdown to July 1, the end of the current state fiscal year. Without a new budget by then, state government would go into partial shutdown.

Talks between Dayton and GOP leaders are supposed to finally resume Tuesday morning. Dayton is already in the process of vetoing the first wave of GOP spending bills, which the House and Senate passed in recent days absent an overall deal with the governor.

Republican leaders argue it's not unusual for lawmakers from both parties to insert policy changes into spending bills. They said they are ready to defend their ideas, calling them central to their vision for the state's next two-year spending plan.

"Frankly, we're not just going to write a blank check to the governor and not have any policy provisions that reflect the kinds of reforms that are necessary in state government," said House Speaker Kurt Daudt, R-Crown.

Republican leaders note that of the 609 policy provisions included in the 10 GOP budget bills, state commissioners and agencies under Dayton's control originally proposed 536 of them. But it's the smaller handful that originated with Republicans that prompted outcry from Dayton, his staff and outside interests closely following each twist and turn of the budget process.

With Republicans now in full control of the Legislature, a host of DFL-aligned groups are calling, e-mailing and meeting with Dayton and his staff hoping the governor can minimize damage to their causes.

The Sierra Club wants the governor to stand firm against GOP moves to lessen environmental regulations and state oversight of pipeline projects. Teachers union Education Minnesota is worried an overhaul to teacher-licensing requirements that Senate Majority Leader Paul Gazelka, R-Nisswa, said could end up in the education budget bill. The Minnesota AFL-CIO, concerned about GOP plans to trim spending on health and human services programs, wants Dayton to reject one of Republicans' top priorities: more than $1 billion in tax reductions.

Leaders of those groups say Dayton must hold firm even if it means not finishing the session on time, dragging into the summer and bumping up against another shutdown.

"I think it's worth taking as long as they need to get it right," said Justin Fay, senior chapter representative for the Sierra Club's North Star Chapter.

A broad coalition of progressive groups is worried about the so-called "pre-emption" bill, which would undo Minneapolis and St. Paul's new sick-leave ordinances and prevent cities from raising the minimum wage.

Members of Isaiah, a faith group that advocates on policy issues, held a religious service — complete with songs and prayer — outside Dayton's office, urging him to veto the bill if it lands on his desk. JaNae' Bates, a spokeswoman for the group, said Isaiah would keep pushing on behalf of what she believes is a majority of Minnesotans who disagree with blocking local government from setting workplace standards.

"He needs to do what the people want," Bates said.

Dayton said he's listening and trying to be responsive to groups that see him as their only hope.

"Since I'm the only one in a position to stand up for their causes, the pressure is particularly intense," Dayton said, "but to be expected."

Even if Dayton and Republicans settle their differences over policies, major divisions remain over how much to spend and what to spend it on. The governor will strongly resist GOP efforts to trim spending on health and human services programs — an area Republicans say has grown too much in recent years — and to dismantle the prekindergarten program he launched last year and hopes to expand.

Gazelka said he hopes for a broad spending agreement between Dayton and Republicans by Wednesday, leaving a few days to sort out specifics before the final race to the finish.

"The end goal in my mind needs to be a win-win, which means that the governor gets some of the things he wants, but that the House and the Senate also get some of the things they want," Gazelka said. "I really think that's where we need to be and I think Minnesotans are counting on us to get it done."

Erin Golden • 612-673-4790