Nobody said it was going to be easy.

Heading into the 2016 session, the Minnesota House and Senate are still split between Republicans and Democrats, and an intense Capitol restoration project has delayed the start of session to March 8. That gives the divided Legislature just 10 weeks to take care of business, a timeline that should be put in perspective: State lawmakers haven’t gotten all their work done in so few calendar days since the early 1990s. 

Even more challenging, perhaps, is that all this will be happening during an election year, when both the House and the Senate are on the ballot and control of the Legislature is at stake. That means all session long, just about every one of Minnesota’s 201 state legislators will have campaigning on the brain.

There’s also this: It was announced on Friday that an expected $1.2 billion budget surplus has shrunk to $900 million, which means less money to deal with the vast chasm between Republicans and Democrats over everything from how to address education gaps and racial disparities to long-term transportation funding and tax cuts.

When confronted with the news Friday, DFL Senate Majority Leader Tom Bakk put it simply: “I think everything got a little harder.”

A recipe for gridlock

No two sessions are the same, but lawmakers and Capitol watchers say the current dynamics are setting up the state for one of its most challenging legislative situation in years — even more challenging than last year, when a newly elected House Republican majority clashed with DFL Gov. Mark Dayton and the DFL-controlled Senate over what to do with a $2 billion budget surplus. 

Back then, Republicans proposed giving it all back in tax breaks, but Democrats wanted a deal on passing a gas-tax increase to fund long-term transportation projects. They didn’t get it, and in June, both sides agreed to leave $865 million on the bottom line to deal with those questions in 2016. That number grew to $1.2 billion in the November forecast, but the revised $900 million puts legislators almost back to where they left off.

Legislative leaders have picked up their disagreements where they left off, too.

The huge divide remaining between the parties was on full display last Thursday, during an unusually combative session preview event, where all four legislative leaders flanked Dayton. They sparred over just about everything: raising the gas tax, racial disparities, transit, tax cuts, how to close the state’s achievement gap.

During a particularly testy exchange, Dayton singled out a recent survey from the Minnesota Chamber of Commerce, the state’s largest business group, which found its members were concerned about Minnesota being a competitive state to do business. Dayton said the report was a “hatchet job” from the group, which tends to support Republicans, and noted the state lands on a lot of lists as one of the best places to live and work.

Daudt fired back: “I get really sick of people who want to pit this group of people against that group of people for their own political gain.”

A few minutes later, Dayton pulled out a piece of paper he came prepared with and read a recent quote from Daudt about universal preschool in Minnesota, one of Dayton’s top priorities. In the quote, Daudt said the main reason for the push was to help bolster the rolls of the state’s teachers union, which would then support Democrats’ campaigns: 

“And I stand right by it, governor,” Daudt said in response.

“So the reason to oppose universal pre-K is because it’s going to add more Democrats to the voting rolls, not what looking at what 47,000 kids could benefit from?” Dayton asked.

“No governor, the reason to oppose it is because it doesn’t show that it closes the achievement gap,” Daudt said, his voice getting louder.  

“It does,” insisted the governor, interrupting Daudt. “You’re wrong.” 

Both Dayton and Bakk said they were “pessimistic” about getting a major transportation-funding bill, but both reiterated their support to raise the state’s gas tax to pay for long-term projects. Daudt and Senate Minority Leader David Hann said opposition to a gas tax is just as strong as it was last year among Republicans.

Daudt said his caucus will continue to push for tax relief and singled out a personal priority — eliminating the state’s income tax on social security. But Bakk repeatedly warned about the perils of ongoing tax cuts, noting that he was around in the early 1990s when big tax relief proposals led to years of deficits in Minnesota. 

In the course of the hour-and-a-half long conversation, the two parties agreed on just a few things: They will take up a long-debated bill to extend unemployment benefits to out-of-work miners on the Iron Range in the first week of session; they will start work on making the state compliant with the federal Real ID Act; and they will pass a substantial bonding bill (legislators almost always pass bonding bills during election years).

Election-year politics

Some Capitol watchers are already predicting a session similar to 2004, when a Republican-controlled House and DFL-led Senate deadlocked on most budget issues and accomplished little to brag about, much less trumpet on the campaign trail. The gridlock was so bad, legislative leaders couldn’t even agree on a bonding bill — one of the only years in recent history when no bill passed.

Dayton said the news of downturn in the global economy — which sliced surplus predictions here in Minnesota — is “concerning” and will make it harder to pass most bills, including his universal preschool proposal. “I think we’re still healthy, but in my opinion we don’t have a surplus to just throw around,” he said. He plans to rework his own supplemental budget proposal to focus more on one-time spending instead of proposals that will continue to need funding in coming years. He will release his plan on March 15.

But the real challenge of 2016 is the election, he said.

“The chances of a successful session have less to do with this forecast and more to do with the dynamics of a Legislature that is entirely up for re-election and a government that is clearly divided,” said Dayton, who is not on the ballot this fall and serving his final term. “People said they wanted divided government, well they got it.” 

Daudt, for his part, said he’s optimistic that the 2016 session will go down as a successful one. “I know there’s a lot of posturing here for potential negotiations and people staking out areas as negotiating positions,” he said after the Thursday panel. “We feel optimistic, and frankly, they should too, but I can tell it’s an election year.”