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To be continued: Dayton’s budget moves set up another showdown with legislative Republicans

On Tuesday, Gov. Mark Dayton signed all of the Legislature’s budget bills, even while vetoing $65 million to fund the operations of the state House and Senate.

Gov. Mark Dayton wants to renegotiate several provisions in the tax bill, including business property tax and estate tax cuts, as well as tax breaks on tobacco and cigars.
MinnPost photo by Briana Bierschbach

It’s all over — or is it?

That’s been the lingering question around Minnesota politics in 2017, first after a handshake agreement on a two-year, $46 billion state budget to end the regular session of the Legislature, followed by a touch-and-go 75-hour special session that seemed like it could go on forever. 

On Tuesday, it became a question of whether lawmakers would have to come back yet again, after DFL Gov. Mark Dayton signed all of the Legislature’s budget bills, though he vetoed millions of dollars to fund the operations of the state House and Senate.

It was a politically shrewd move that — at least according to Dayton — was inspired by another shrewd move by Republicans in control of the Legislature: to make funding for the Department of Revenue contingent on the governor signing a $650 million tax bill they wanted. 

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Dayton signed the tax bill to protect funding for the department, he said, but he eliminated funding for the Legislature in a state government bill in order to compel lawmakers back to the negotiation table to discuss a number of provisions. Under Minnesota law, governors cannot eliminate policy language in bills, but they do have the line-item authority to veto individual budget appropriations.

“I consider this provision … to be a reprehensible sneak attack, which shatters whatever trust we achieved during the session,” Dayton said in a letter to lawmakers. “Because of your action, which attempts to restrict my executive power, I am left with only the following means to raise my strong objections to your tax bill, which favors wealthy individuals, large corporations and moneyed special interests at the expense of the state of Minnesota’s fiscal stability in the years ahead.”

Avoids a government shutdown

In a special session, Dayton wants to renegotiate several provisions in the tax bill, including business property tax and estate tax cuts, as well as tax breaks on tobacco and cigars. On Twitter, Senate Taxes Chairman Roger Chamberlain said Dayton’s response to the tax bill was “outrageous.”

“We agreed to tax bill,” Chamberlain said. “I sat at table [with him], he agreed to compromise.”

Dayton also wants to discuss a teacher licensure provision he signed into law in the education budget bill, as well as a controversial provision to bar the Department of Public Safety from issuing driver’s licenses to undocumented immigrants, which was tucked into the public safety budget bill. In the final hours of the special session, Dayton was the subject of intense lobbying from progressive activists, who urged him to veto all the budget bills and their objectionable provisions and start over again. 

But on Tuesday, Dayton hearkened back to 2011, his first session as governor, when he and a Republican-controlled Legislature battled over how to solve a $6 billion budget deficit. That disagreement stretched into a historic, 20-day government shutdown. This year, Dayton signed the budget bills to avoid that scenario, even though he disagreed with provisions in each bill, he said. Without a budget agreement, a government shutdown would have happened automatically after June 30, the last day of the fiscal year.

“Having been through 20 tumultuous days in July 2011, I understand the enormous uncertainties and disruptions that even the threat of another shutdown would cause for many thousands of Minnesotans,” he said. “I also know from prior experience that it is extremely unrealistic for any of us to imagine we would achieve any better results from protracted budget negotiations well into June.”

The move leaves a lot of unanswered questions. Top Republican leaders said Dayton was violating the constitutional separation of powers between the legislative and the executive branch, and legal challenges are likely forthcoming, reports MPR News. The Legislature also has a carry-forward fund — reserves of between $3 million and $7 million saved up over the years — that could be used for paychecks for lawmakers and staff for at least a few months.

“I am disappointed in the governor’s behavior — eliminating funding of the Legislature in order to get his way on policies he has already agreed to,” Daudt said, noting that the Senate has 67 members who each represent nearly 80,000 residents and the House has 134 members who each represent nearly 40,000 people. “Ultimately, I believe the governor is acting unconstitutionally by defunding a separate branch of government that represents the voice of the people at the Capitol.” 

Pre-emption vetoed

In the budget bills he did sign, Dayton approved things like a 2 percent increase on the education formula each year for the next two years, tax reductions on Social Security income, more funding for higher education institutions, $300 million for road and bridge projects and increased funding for the courts, local governments and broadband access. His administration was involved in negotiating those bills until the final hours of the special session.

Dayton also signed a nearly $1 billion package of bonding projects and a bill that funds projects through the Legacy Amendment, but he issued a veto on a bill that included a pre-emption proposal, which would have blocked local governments from setting their own wage and paid leave laws. (One budget bill included a single pre-emption measure: Dayton signed a jobs and economic development budget that bars local governments from banning plastic bags in grocery stores.)

“Local governments can be more adept at responding to local needs with ordinances that reflect local values and the unique needs of their communities,” Dayton said in his veto letter. “State government does not always know what works best for every community, and may lag behind when improvements are needed.” 

During the first special session of the Legislature, Republicans followed through on a promise to Dayton not to tie the pre-emption bill to budget bills, but they did try to sweeten the deal by adding other things Democrats wanted, like paid parental leave for state workers, wage theft provisions and changes to state pension plans. 

Yet Dayton’s administration claimed the parental leave and ratification of worker contracts were effective immediately upon the final votes of the House and Senate, leaving even more legal questions in the wake of the 2017 session. “The veto of this bill has no legal effect on the on the bargaining agreements and compensation plans,” he wrote.

It was a messy end to another messy year at the Capitol, after voters gave Republicans complete control of the Legislature last fall. Regardless of legal outcomes, however, the session didn’t end in a government shutdown, as many predicted earlier in session.

“I’ve done what I’ve done,” Dayton said. “I signed the rest of the budget because I wanted to remove any possibility that those jobs and the whole function of state government would be put into jeopardy and used as a political bargaining chip in what ensues.”