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Where the standoff between the governor and Republican legislative leaders goes from here

MinnPost photo by Briana Bierschbach
House Speaker Kurt Daudt speaking to the press on Friday afternoon as Senate Majority Leader Paul Gazelka looks on.

The relationship between Gov. Mark Dayton and the Minnesota Legislature has been through plenty of tests.

In just the last year, it’s been through a long legislative process; a special session of the Legislature; and a court case brought against the governor by legislative leaders — including an appeal all the way up to the Minnesota Supreme Court. Most recently, it’s been tested via the intervention of a professional mediator, a person trained in solving even the toughest disputes between clients in high-stakes scenarios.

But after a day and a half of court-ordered private mediation over the issues raised in the Legislature’s lawsuit late last week, discussions broke down. And once again, the two sides have proven their differences are very real, and very unlikely to get solved anytime soon. In dueling press conferences Friday afternoon, legislators accused Dayton of breaking his word while Dayton accused Republican leaders of lying to him over the last four months.

“This has been a farce, and I’m deeply offended,” Dayton said Friday. “I was angry at them, I expressed my anger. The mediator himself has issued a statement saying we are at an implacable impasse and I finally said, ‘Enough of the sham.’” 

“It’s the governor’s actions that got us here, and unfortunately the governor is the one who has cut this off,” Republican House Speaker Kurt Daudt said.

The latest impasse has left plenty of questions, not only about what led to the latest meltdown but where things go from here.

You may ask yourself, ‘Well, how did we get here?’

In May, after a long session of disagreements on everything from tax cuts to the state’s two-year, $46 billion budget, the Republican-controlled Legislature and Dayton reached a handshake agreement on a deal with an hour left until adjournment.

As part of the deal, Dayton immediately called a special session, and after four more days of nonstop negotiations, legislators passed a $650 million package of tax cuts, a bonding bill and a two-year state budget. 

Four days later, on May 30, Dayton signed all of the budget bills and the tax bill. But he also surprised everyone by line-item vetoing about $130 million in funding for the House and Senate over the next two years. Dayton did that, he said, because he wanted to avoid a government shutdown while compelling lawmakers back to the table to discuss problems he still had with the final budget and tax bills. 

In his veto letter, Dayton laid out the problems with the tax bill: including breaks on certain tobacco taxes (including one on premium cigars); changes to the state’s estate tax; and business property tax cuts that he said would be too costly in the years to come. Dayton also wanted to re-examine two provisions in the budget bills: changes to state teacher licensure laws and a proposal that bars the Department of Public Safety from issuing driver’s licenses to undocumented immigrants.

Dayton also said legislators forced his hand in signing the tax bill because of a provision in another bill that defunded the state’s Department of Revenue if he didn’t. 

Legislators, not surprisingly, didn’t bite on the offer to come back and renegotiate. Instead, the took Dayton to court, arguing that his line-item veto of the Legislature’s funding effectively abolished co-equal branch of government. Ramsey County Chief Judge John Guthmann agreed, ruling Dayton’s veto “null and void” and restoring their funding. 

Dayton appealed that ruling to the Minnesota Supreme Court, which didn’t reverse the lower court’s ruling, but instead said they thought the veto was constitutional and ordered the two parties into mediation to try and resolve their differences. 

So what happened during mediation?

Dayton and the Legislature picked retired Hennepin County Judge Rick Solum to mediate their dispute, and they set up private talks at the Dorsey & Whitney law firm in downtown Minneapolis Thursday and Friday. Dayton and legislators sat in separate rooms throughout most of the mediation, while Solum shuttled between the two parties trying to find a resolution. 

Gov. Mark Dayton
MinnPost file photo by James NordGov. Mark Dayton

For the first day, Dayton said they went back and forth on what legislators would be willing to negotiate in the tax bill. Republicans said they wanted reductions in state spending, but they were also frustrated that they were “negotiating things we’d already negotiated” during the session, said Senate Majority Leader Paul Gazelka. “We went back in our notes and found that the governor absolutely said he would support the tax bill as is on Saturday evening before the end [of session],” he said. 

But the final break came when legislators revealed that they could tap into additional funds and keep the Legislature running until the next session starts on Feb. 20. After he learned that, Dayton left, saying legislators had lied to him about how long they could operate and no longer had any incentive to work out a deal. “They owe the Minnesota Supreme Court and the people of Minnesota an honest explanation of why they have dragged all of us into their costly theatrics over the past four months,” he said.

So how much money does the Legislature actually have?

On Friday, Republicans said that hadn’t kept any funds private, and Daudt said the governor was just upset that “he hadn’t successfully eliminated us.” Due to Dayton’s veto, legislative funding technically stopped in July, the start of the next two-year budget. But the district court agreed to a temporary funding stipulation to keep the House and Senate running at their current levels until Oct. 1.

As part of information requested by the Supreme Court, lawmakers had to report last week exactly how long they could keep running after Oct. 1, using funds in little-known carryforward accounts kept by both the House and the Senate. In the filings, the House reported it had about $10 million in reserves, enough to keep paying legislators and hundreds of staffers until Feb. 1. The Senate reported less on hand, with about $6 million in its reserves, enough to keep them running until Dec. 1. 

But after advice from their counsel, legislators said this week they could also use about $3.6 million in carry forward funds from the branch’s Legislative Coordinating Commission, which wasn’t subject to Dayton’s veto. That would be enough to avoid layoffs until the 2018 session starts, but the Legislature will still need a new appropriation sometime after then to keep them going for the next two years.

“We consider ourselves to be in survival mode,” Daudt said. “We will look at any other option to make sure people have a voice here at the Capitol in their elected representatives.”

What happens now?

For now, the case heads back to the courts. The Minnesota Supreme Court specifically left the case open and they’ve asked the governor and Legislature to report back on the status of their mediation by Friday. Since the mediation didn’t exactly go well, the Supreme Court might have to make a more definitive ruling on the case. While they stated Dayton’s veto was constitutional, they also raised concerns about the ongoing operation of the Legislative branch. 

In filings last week, Dayton’s attorney Sam Hanson argued the courts should provide the Legislature with temporary, essential funding until the political issue is resolved, but the Legislature’s attorney, Doug Kelley, argued only the Legislature has the power to order funding under the Constitution. Kelley argues the courts should affirm the lower court ruling that the veto is unconstitutional and void. The Supreme Court could also rule that legislators have time to figure out a solution during the next legislative session.

Couldn’t the Legislature just override Dayton’s veto and get their funding back?

Republicans lost their chance to attempt an up or down override of Dayton’s veto when they adjourned the special session of the Legislature sine die, or indefinitely. 

When regular session convenes on Feb. 20, Republicans said they plan to immediately introduce a bill to restore their funding and send it to the governor, hoping he’ll sign it. If Dayton vetoes their funding again, only then would legislators have the option to try and override his veto. But even that’s not a simple task: Overriding a governor takes a two-thirds vote in the House and Senate, meaning Republicans will need help from Democrats in the minority. Neither Daudt or Gazelka expressed confidence they could get enough votes to override his veto. 

So what happens when the Legislature convenes in 2018?

Much of the same. Dayton has promised to “forcefully” push the issues he outlined in his May 30 veto letter to the Legislature. And don’t expect anyone to be too friendly when things do start back up. Dayton was visibly angry after mediation on Friday, accusing Republicans of lying to him about their finances. Republicans repeatedly called into question Dayton’s word on the tax bill, which they claim he clearly approved. All this boils down to a significantly broken relationship as Dayton heads into his final year as governor.

How is this affecting state government?

Well, the whole affair is costing the taxpayers hundreds of thousands of dollars in legal bills, although the total price tag is not yet known. The Legislature’s fees won’t be known until the lawsuit concludes, but Dayton’s office has reported about $245,000 in legal fees through August. 

This article has been edited to correctly identify how a possible veto override of the Legislature would work after a special session. 

Comments (13)

  1. Submitted by James Hamilton on 09/25/2017 - 11:25 am.

    Has the GOP sealed its fate?

    Given the existence of sufficient funding to carry the Legislature into the next session, it seems to me that their legal claims have been rendered moot. The court already has ruled that the veto was within Dayton’s power. Absent any threat to the ability of the Legislature to operate until it resumes in 2018, the court should dismiss the claim as one seeking an advisory opinion which is beyond the court’s power to render.

  2. Submitted by Hiram Foster on 09/25/2017 - 11:44 am.


    What I have been telling anyone who will listen is that the Supreme Court tossed the governor a somewhat unexpected and somewhat unlikely constitutional life lines, and throwing it back at the court isn’t without it’s risks.

    The two governing branches of our government have recklessly and unfairly put the courts on the spot. Courts aren’t supposed to legislate. Courts know that there just isn’t a law that tells us what the law should be. Politics is what judges went into judging to get away from, with certain notable exceptions. The mediation ruling provided an out for the judges and a second chance for the governor and the legislators to do what the constitution mandates them to do. It was a mildly courageous decision on the justice’s part. And one thing bitter experience has taught me is that supreme court justices are not folks you want to get on the wrong side of. That being the case, I wouldn’t ever one to be the one to walk away from the break the court gave me. The governor isn’t paid by the hour. He should have sat in that room for as long as it takes if not longer. He just shouldn’t have been the guy to walk out first.

  3. Submitted by Michael Hess on 09/25/2017 - 11:56 am.

    What did they know and when did they know it?

    The Governor accuses the GOP of lying that they were going to run out of money. When did they get the legal opinion there were extra bridge funds they could access?

    If they got that advice pretty recently, as they explored options, his accusation is off target. If they knew that for example before they filed suit, then it’s valid.

    Since we are in new territory here I don’t know that we should automatically assume the legislature knows every pot of money they can access if the Governor shuts their funding off.

    Even if they survive till the new session and got a new funding bill or were able to override the veto, they would have spent down these reserves which would normally come into play should a shutdown or other impasse occur – and I think nothing the past few years gives us any confidence we can avoid this in the future.

    • Submitted by Frank Phelan on 09/25/2017 - 05:52 pm.

      Makes No Difference

      For at least a generation, the GOP has been tooting it’s own horn about how they are the party of fiscal responsibility. And now their legislative stewards just happen to find millions of dollars they didn’t know they had? Who cares if the found it in June or September? These clowns couldn’t audit my 17 year old kid’s 1040EZ if I gave them his W-2.

      Why does the GOP-led legislature even have this surplus money? These are the folks always yammering on about how any surplus is just overcharging taxpayers and the money should be returned to hardworking MN families. Hey Daudt, give it back! It’s my money!

      And does anyone know if the MN GOP is out of debt yet?

  4. Submitted by Bill Willy on 09/25/2017 - 12:09 pm.

    “This has been a farce . . . Enough of the sham”

    June 28th:

    “In an agreement made public Friday afternoon, the governor’s lawyer — former Supreme Court Justice Sam Hanson — and the Legislature’s lawyer — high-profile private attorney Doug Kelley — asked a Ramsey County district judge to order the Legislature funded for a time. The funding would stop the legislative shutdown while the court case goes on.”

    In essence, the Legislature’s attorney was telling the judge that the Legislature had enough money in reserve to function until sometime in October.

    One week ago today, on September 18th, the Glean reported that MPR reported:

    “The Minnesota House has $10.7 million in reserve and the Senate has $6 million, according to a document filed with the Minnesota Supreme Court on Monday.

    “The money would fund the House through January and the Senate through November.”

    So, at the end of June, the Legislature, through its attorney, told the judge it would run out of money in October.

    Then, in the middle of September, the Legislature told the Supreme Court the House had enough money to function through January and the Senate had enough to make it through November.

    But now we find out the Legislature “revealed that they could tap into additional funds and keep the Legislature running until the next session starts on Feb. 20.”

    So which is it?

    Why the confusion?

    Did Kurt Daudt and Paul Gazelka forget those funds were there?

    And what, exactly, are the Legislature’s “little-known carryforward accounts,” how much of Minnesota taxpayer’s money is in them, what is their purpose, why are they secret and how are they accounted for?

    And, maybe most importantly of all, is it okay for the Speaker of the House of Representatives and the Majority Leader of the Senate to mislead a district court judge and the Supreme Court?

    What do you think would happen to you or me if we did that and did it in conjunction with a case that involved the handling of $10 million to $20 million of taxpayer’s money?

    And, as usual, Kurt Daudt has the audacity to stand up in front of the public and say “the governor was just upset that he hadn’t successfully eliminated us.” He says that the Legislature is operating in survival mode, implying that they are barely and heroically hanging on “for the people” and, as usual, blaming Mark Dayton:

    “It’s the governor’s actions that got us here, and unfortunately the governor is the one who has cut this off.”

    Yeah . . . Sure . . . It’s the governor’s actions. Kurt Daudt’s actions had nothing to do with it because they never do.

    “They owe the Minnesota Supreme Court and the people of Minnesota an honest explanation of why they have dragged all of us into their costly theatrics over the past four months.”

    I don’t know if there are laws against shamming district and Supreme Court judges about tens of millions of taxpayer dollars, but if there are, I, for one, would like to hear that honest explanation from Speaker of the House Daudt and Senate Majority Leader Gazelka (and their defense attorneys) when they’re under oath in a court of law.

  5. Submitted by Howard Salute on 09/25/2017 - 12:35 pm.

    Mark Dayton again acts like spoiled child

    Remember when Dayton walked out of a meeting with the Capitol Preservation Commission because they did not agree with him? And remember in retaliation he then tried to strip power from the Minnesota Historical Society? .

    So Dayton doesn’t keep his word, deflects and blames others for lying to him. Then he abruptly walks away from the Supreme Court ordered mediation. Wow, aren’t you special!

    • Submitted by ian wade on 09/25/2017 - 06:39 pm.

      Of course…

      If Trump had done what you suggest Dayton has, I think you would been praising him for his “take no prisoners” stance and “telling it like it is.”

    • Submitted by LK WOODRUFF on 09/25/2017 - 07:08 pm.

      No, the REPs overplayed their hand

      The REPs have become increasingly aggressive, which imo is a total waste of time, money, energy and resources. Their primary objectives now appear to be to UNDO everything any DEM ever did. This isn’t mature or professional. This isn’t just happening in MN; it’s happening in other states and in Washington DC, too.

      The REPs have clearly decided that they are no longer interested in playing by the rules. They are hellbent on garnering perceived ‘wins’ by any means possible. If that means breaking the rules, overriding them, ignoring them, making new ones at will, or robbing Peter to pay Paul (e.g., healthcare: taking it away from the little people to give additional and unnecessary tax breaks to the already wealthy) …well, so be it.

      But let anyone subject the REPs to the same treatment, and oh my the sky is falling! This is awful! How can you treat us this way! This isn’t fair! Whine, whine, whine….complain, complain, complain.
      In America, we have a republican form of government with democratic processes. It behooves all of our elected officials to remember this at all times. Those who choose not to: should be voted out. They are not representing their constituents, their allegiance is to others. They are not being honest, they are lying, playing games and cutting backroom deals.

      All government at every level has processes, procedures and policies that must be adhered to. My strong recommendation is that we all insist that our elected officials do precisely that. The Founding Father showed great wisdom when they wrote our guiding documents. They must be rolling over in their graves over all of the maneuvering happening these days.

  6. Submitted by Ron Gotzman on 09/25/2017 - 01:35 pm.

    Imagine the outrage is a GOP member had behaved like Dayton

    The same” media” that is providing Dayton political cover today for his outrages actions would have also provided him political cover for shutting down the State government in not signing the bills this spring.

    BTW – this “media” article is a very good

  7. Submitted by Mike Downing on 09/25/2017 - 05:39 pm.

    Legal but not lf it’s results are illegal…

    I may have misinderstood the recent MN Supreme Court’s decision.

    Yes it said the governor’s line item veto is constitutional. However, it also said his line item veto could not be used if the result was unconstitutional, i.e. eliminating a coequal branch of government.

    In the end, Dayton’s line item veto of the Legislature’s budget will be an example of his childish behavior similar to him walking out of meetings and mediation.

    • Submitted by Frank Phelan on 09/26/2017 - 10:27 am.

      Fire With Fire

      Was it childish for Daudt to slip in a poison pill, so that if Dayton vetoed the entire bill there would be no budget for the Revenue Department to operate? Daudt claims Dayton is trying to eliminate the legislature. If the government can’t collect any revenue, aren’t they trying to eliminate the entire government? If it’s legal and proper for the legislature to do that, doesn’t that give them the power to pass any bill over the objections of the governor?

      This modern day GOP loves to legislate by crisis, crisis they manufacture themselves.

    • Submitted by ian wade on 09/26/2017 - 04:27 pm.

      “Childish behavior”

      is in the eye of the beholder. You might want to look at who’s presently occupying the Oval Office for an example.

  8. Submitted by Nick Foreman on 09/26/2017 - 10:15 am.

    Anyone in rural MN who

    Voted for republican legislative clowns like Daudt and Gazelka will receive nothing from them unless they are rich. Corporations and the rich are the only players recognized by republicans.

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