Lawmakers reach tentative budget deal; Dayton not on board

At the state Capitol, legislators started calling them “Summit Avenue decisions.”

The reference was to the governor’s residence just two miles away, where a scrum of top political leaders had been working all week to reach an agreement on how to spend roughly $40 billion over the next two years. Because of the slow progress being made in negotiations, not to mention the lack of information about the talks, business at the statehouse had come close to a halt.

But on Friday evening, the big decision finally came down.

That’s when DFL Senate Majority Leader Tom Bakk and Republican House Speaker Kurt Daudt said they’d reached the broad terms of a budget deal — one that both parties can live with, and one that the respective chambers of the Legislature will pass by May 18, the constitutionally required date on which lawmakers must adjourn. The agreement would mean spending money out of a nearly $2 billion budget surplus on early and higher education; would preserve MinnesotaCare, the subsidized health care program for low-income residents; and would leave “significant” money on the bottom line to work out a deal later on two of the session’s thorniest issues: transportation funding and tax cuts.

And while Bakk and Daudt expressed confidence the bills would pass, the two legislative leaders were light on the details, as they had yet to brief their members and respective committee chairs. “We are as close as we can possibly be to having an agreement on [the budget],” Bakk said outside the governor’s residence, just before heading to an appearance on TPT’s “Almanac.”

Dayton still pushing for universal pre-K

One of the details they were light on was education spending. Bakk said there’s significant new spending in early-through-high-school education, but the figure legislative leaders agreed to is less than what DFL Gov. Mark Dayton wants.

Dayton had been in negotiations with the legislators all week, but he was reviewing the final deal as lawmakers briefed reporters Friday evening. He sent the leaders at least one counteroffer soon after: He wants no less than $550 million more spent on education over the next two years, or $150 million more than legislative leaders have proposed, according to spokesman Linden Zakula. That new funding must include a 1.5 percent increase on the per-pupil spending formula each of the next two years, and another $173 million for half-day, universal pre-kindergarten education, the governor’s top priority. Dayton must sign all of the budget bills for them to be enacted into law. 

“With a $1.8 billion surplus, there is no excuse not to make this critically important investment in Minnesota’s children and our collective better future,” Dayton said in a statement released late Friday night. 

Other than Dayton’s final approval, the main obstacle ahead is a logistical one: the House and Senate revisor offices must process massive amounts of paperwork before the bills can go up for a full vote. “We know it’s going to be a lot of work in the next three days, but we’re eager to get to work and I think Minnesotans will be happy to hear we are going to end on time,” Daudt said.

Earlier in the day, the full Senate passed a resolution allowing conference committees to meet throughout the evening and over the weekend, and leaders said the House was expected to pass the same resolution later Friday night. Bakk anticipated conference committees would start working out final bills immediately, with more detailed budget numbers due Saturday morning.

A special session still a possibility … eventually 

That will get things in motion at the Capitol on a budget bill. Yet leaders said little time has been spent talking about a DFL plan to raise a gas tax and other fees to pay for billions of dollars transportation projects over the next decade — or about Republicans’ plan to cut taxes by $2 billion. Bakk said leaders would continue to talk about those issues over the next few days, but the priority was getting a budget deal done as soon as possible.

Leaders said they may leave a “significant” amount of money on the bottom line to deal with transportation and tax cuts later. That could mean a special session at some point, but not immediately. Crews working on a massive restoration project in the Capitol plan to get to work restoring the House chamber immediately after lawmakers adjourn on Monday. Bakk said any possible special session would have to wait until at least December, when construction on a new office building for senators is complete.

“There is going to be significant money left on the bottom line unspent, assuming we don’t reach some agreement on taxes and transportation,” Bakk said. “We really can’t give you that number yet, because they are putting the spreadsheets together. But there will be enough left on the bottom line to do a pretty significant tax bill or a pretty significant transportation bill if we can find a path in the next few days.”

Here are other details gleaned about the tentative agreement so far:

●      Republicans will get a task force to look at the future of the MinnesotaCare. GOPers originally proposed eliminating the program, noting that its funding source will sunset in 2019, but Democrats refused to budge in negotiations.

●      There could be a “bare bones” bonding bill passed as part of the deal.

●      A deal on the governor’s buffer proposal between waterways and farmland is still on the table, but a final compromise hasn’t been worked out yet.

●      Two budget targets have been finalized, with sign off from all three leaders. Higher education will get $166 million in new spending over the next two years, some of it for new medical research at the University of Minnesota, but not enough to freeze tuition on college campuses. The courts and public safety will also get $111 million in new spending.

Legislative leaders will now return to the Capitol to finish their work, after five days spent mostly at the governor’s home. They were clear that not everyone is going to be happy with the final deal, but they expressed confidence the budget bills would pass out of both chambers on time.

“You always like the outcome to be something where people get what they need, maybe not what they want, but people get what they need,” Bakk said. “Sometimes the best negotiations are when everyone walks away from the table grumbling a little bit.”