After a week of meetings with little movement toward an agreement to close out the 2016 session of the Minnesota Legislature, legislative leaders emerged from closed-door meetings last week looking for help from an unlikely dealmaker: Gov. Mark Dayton.
Standing with Senate Majority Leader Tom Bakk and rank-and-file Democrats on Thursday, the DFL governor promised to work over the weekend to find a middle ground on transportation funding, a massive outstanding issue between Democrats and House Republicans. By Monday, a week before the deadline for adjournment, Dayton promised to have a solution that would be a “true compromise.”
“It’s going to have to involve elements that each side is not willing to accept at this point,” Dayton said, without revealing any of the details that would be included. “But that’s the nature of compromise.”
It’s a strange sight for Capitol regulars, who last year watched Bakk and Republican House Speaker Kurt Daudt team up to strike a deal on the $40 billion state budget. At the time, Dayton felt he was cut out of the final dealmaking, and he ended up vetoing several of the Bakk-Daudt budget bills, though the impasse was ultimately resolved in a one-day special session of the Legislature in June.
But 2016 is one of the strangest political years in recent memory. Amid construction cranes and workers restoring the 111-year-old Capitol, the 10-week legislative session has whizzed by. Now there are only seven days until lawmakers are required to go home, an event that will essentially kick off the 2016 election, when all 201 lawmakers will be on the ballot. That’s heightened tensions between the parties this session, with constant whispers that both sides want a do-nothing session to put the blame on the other party this fall.
Dayton, however, is not facing the voters this fall — or ever again, for that matter. He’s serving his second and final term. And before he goes, it’s clear, he wants to check off one of the big items on his wish list: a transportation funding package.
The sticking point
Transportation has become the linchpin of the 2016 session, the one item everything else depends on. Daudt has said the two sides need to figure out that piece before they can move on to the other major outstanding issues, namely tax cuts and the bonding bill, the large borrowing package of construction projects passed every other year.
“We feel like transportation is something that everyone wants and there should be no excuse to leave here without accomplishing at least that,” said Daudt after a 90-minute meeting with top leaders at the governor’s residence last Monday. “My hope is that we can at least do that, if nothing else.”
Lawmakers have a $900 million budget surplus to spend this year, but Daudt said it’s still unclear how much, if any, they are going to spend out of that on transportation projects. That makes it uncertain how much they can spend on things like tax cuts. “I think once transportation comes together, all the other pieces will fall into place,” he said. “The biggest elephant in the room is are we going to spend general fund dollars on transportation or not?”
Last week, efforts to resolve differences over a transportation package in a conference committee went nowhere. Democrat Sen. Scott Dibble offered a deal that would raise vehicle license fees and drop a DFL proposal for a 16-cent wholesale tax on gasoline, replacing it with a 12-cent per gallon tax on gasoline, phased in over three years. But Republicans said any bill with a gas tax was a non-starter for them.
On Wednesday, the Republicans countered Dibble’s offer with one that included most of what they were already asking for: diverting auto parts sales taxes and other revenues into a fund for transportation; bonding dollars dedicated for transportation; and some spending from the state’s budget surplus.
Their proposal also left out funding for mass transit, a critical piece for Democrats, and included several changes they want to make to the Metropolitan Council, the Twin Cities regional planning body, including making members local elected officials instead of appointed by the governor.
Dibble called the Republican response a “political document,” and not a real offer. But House Republican Transportation Chairman Tim Kelly said because Democrats didn’t take the gax tax completely off the table, Republicans didn’t make any concessions on transit. “To come out and put transit funding in immediately didn’t make sense to us, if that’s the way our offers are going to go,” he said.
Bonding and taxes at a standstill
Meanwhile, progress on the other two big outstanding issues — bonding and taxes — has ground to a halt in St. Paul.
A $1.8 billion Senate DFL bonding bill, one of the largest proposed in state history, failed on the floor by a single vote, and House Republicans haven’t unveiled their proposal yet, which they said should be around $600 million.
The lack of details in the Republicans’ bonding plans have led to a chorus of complaints from Democrats — and newspaper editorial boards — calling on GOP leaders to put their bill on the table. House DFL Minority Leader Paul Thissen tried to get Republicans to reveal the math on the floor about their “super secret” bonding bill, but those efforts didn’t seem to work. “A wise man once told me, never do math in public,” Rep. Paul Torkelson, chair of the Capital Investment Committee, said in response to Thissen.
Meanwhile, on Wednesday, Senate Democrats passed one of two tax bills they’ve proposed this session. The bill would provide property tax breaks for the proposed soccer stadium in St. Paul and offer paid family leave to workers across the state, among other things. But it’s still unclear what will happen in the House; a target still hasn’t been set for their tax bill this year.
For his part, Dayton knows nothing will move forward until they figure out transportation. “We agreed,” Dayton said Thursday. “Transportation had to get done before the rest of the target setting.”
‘A true compromise’
On Friday, Republicans held a press conference that urged Dayton to leave the gas tax out of his proposal. Daudt, flanked by members of his caucus, also used Dayton’s own words against him, standing next to a poster board quoting the governor saying, “A gas tax increase is dead.”
A frustrated Dayton did say those words last winter, after he spent months trying to get legislators to accept his transportation proposal, which included a gas tax increase. He’s pulled back on the statement since then, but he’s generally left it up to state legislators to figure out a transportation solution this year.
Now, he’s back in the mix. And Dayton said he wouldn’t pre-judge what he will include in his transportation offer. He said it would dedicate about $600 million a year over the next decade to transportation and it will include “real money.”
“It will be a true compromise, he said. “Involving things that the House doesn’t like and the Senate doesn’t like.”