Veto of tax measure, failure of bonding bill upend legislative session — five days before it’s supposed to end

Gov. Mark Dayton vetoing the tax bill on Thursday morning at Bruce Vento Elementary School.

Two of the supposed must-dos at the 2018 session of Minnesota Legislature were undone in a single day — five days from session’s end.

Within an hour of the Senate adopting the House-Senate tax bill on Wednesday, Gov. Mark Dayton said he planned to veto it, which he did Thursday morning. Also on Wednesday, Democrats voted against the Senate bonding bill, which pays for public construction projects, denying it the super majority vote needed for new state debt. It was too small, they said, echoing a complaint Dayton has been making for weeks.

Soon after, the Senate GOP staffers had prepared a poster listing projects that might be popular in DFL districts that went down to defeat, at least temporarily. When a reporter commented on the quick turnaround, Senate Majority Leader Paul Gazelka joked: “We’re just that good.”

Yet the optimism Gazelka expressed at noontime was soon replaced by a darker mood, one that spoke to a realization that time is running out to get anything substantive done this session.

“Hearing the tax bill might go down; hearing the bonding bill did go down. It’s just difficult,” Gazelka said Wednesday. “I don’t know what we’re going to do at this point. I think we can still get there — it’s just that the timing is starting to run out.”

GOP: Dayton’s demand ‘next to impossible’

The drama surrounding the tax and bonding bills started Monday, when what appeared to be a routine press conference by Gov. Mark Dayton quickly became something else. At the time, it was expected that Dayton would make another impassioned request for emergency school funding, something he announced two weeks ago in response to news of budget cuts in at least 59 school districts across Minnesota.

What wasn’t expected was an ultimatum, though that’s what happened. Dayton said he would not accept any tax legislation unless Republican leaders agree to his school funding call. With one week to go, and with the governor reiterating his promise not to call a special session this year, Dayton had suddenly changed the dynamics of a session that already presented a difficult path to completion.

“My position is I will not engage in any negotiations on the tax bill or signing the tax bill until we have an agreement to provide emergency school aid,” he said. “There’s plenty of money in the tax bill, more than enough to keep teachers in front of school children.”

Dayton already had many issues with the tax bill, which began life as a way to sync Minnesota’s state tax code with the federal one after sweeping changes were made by Congress last year. The bill has since become more than that, and that was before the DFL governor decided to link it to any other issue.

Dayton appeared frustrated that his attempt to light a fire under lawmakers on the issue of pending school cuts had been met with, well, not much response at all. GOP leaders said that they didn’t have time left in the session to address the issue, and they didn’t share the governor’s urgency for sending $138 million to the state’s school districts. House Speaker Kurt Daudt, a Republican from Crown, had sent Dayton a letter suggesting that if the issue were to be taken up at all, it would need to happen in a special session.

Dayton’s ultimatum came as part of his first public comments since that letter. After the governor’s pronouncement, GOP leaders were at the ready to respond, and neither Daudt nor Gazelka appeared ready to give in. “One hundred and thirty eight million dollars at this late place in what we are doing is next to impossible,” Gazelka said.

Senate Majority Leader Paul Gazelka
MinnPost photo by Peter Callaghan
Senate Majority Leader Paul Gazelka said he didn’t think Gov. Mark Dayton should hold the tax bill “hostage” to the school funding issue.

Gazelka then quoted from the governor’s own early April letter that listed what needed to be done — a list that didn’t include supplemental school funding. “We got that at such a late date that I don’t see how that possibly can happen and do all the other things that we agreed to,” Gazelka  said.

But as part of the end-of-session dance, leaders have to express confidence that they can complete the work on time. Daudt said he thought things were “progressing nicely” and would be meeting with Dayton shortly, a meeting Dayton had already said he wouldn’t attend. Daudt and Gazelka even left a press conference shortly before the appointed time to make sure they were on time for the meeting that wasn’t to be.

Part pique, part realpolitik

By Wednesday, however, it was harder to cover the stresses. Gazelka said he didn’t think Dayton should hold the tax bill “hostage” to the school funding issue. The GOP leader said the House and Senate had already given in on several aspects in response to Dayton concerns, such as a “trigger” that would reduce future tax rates should the economy improve and an expansion of tax exemptions under the estate tax.

“This bill should stand on its own,” Gazelka said. Linking it to school money is “a major shift from his April 9 list of what he wanted. Even then, we’ll try to figure out if there’s something we can do to accommodate the governor. I don’t know that we’ll find a solution, but we’re gonna give it our best shot.”

Dayton’s position on emergency school aid is part pique and part realpolitik. He remains angry that GOP leaders don’t see pending budget cuts in many school districts as an emergency. But he also contends that divided government means no side gets all that they want, but that everybody gets something.

“If they are willing to compromise and provide emergency school aid, I’m willing to concede some matters on the tax bill,” Dayton said. “I recognize they need to get some of what they want. … I have my priorities and they have theirs. We’re co-equal branches of government and we need to both acknowledge each other’s priorities.”

After vetoing the bill at Bruce Vento Elementary in St. Paul, Dayton sent a letter to the Legislature. While he cited the failure to act on the school funding issue, he also took issue with the bones of the bill itself.

“I am vetoing this bill because of its misguided priorities for corporations and the wealthy over the education of our children,” the letter stated. “Yet I remain hopeful that we can come to an agreement in the final days of the Session to fund Emergency School Aid and provide tax cuts that better serve our Minnesota families.”

On Thursday morning, the two GOP leaders sent Dayton a letter saying it is “imperative” they meet with him today. The same letter asserted that the Legislature has boosted school funding over the last two budgets and said that most of the state’s school districts are managing their budgets with money already available. That funding, they wrote, will be revisited in the next budget cycle starting in 2019.

“Despite our differences, we know there is a path to work together this year to make progress on issues that are important that are important to Minnesotans,” they wrote before asking for a meeting Thursday afternoon. Dayton earlier said he had spoken with Gazelka on the phone the previous evening and said the Senate leader is “sincerely trying to work things out.”

On Wednesday, Gazelka had conceded that perhaps the next Legislature would have to hurry into session in 2019 and take up meshing the state tax code with the federal rules before people and businesses start filing their returns.

Of course, that will be after an election that both parties hope will advantage their position on the issue — and many other issues. A Republican governor, for example, might be easier for GOP leaders to work with than Dayton. But a DFL Senate and another DFL governor would do much to weaken the Republican position.

It’s also worth noting that tax conformity and the bonding bill are just two of the big things still pending. There is some thought that a response to the opioid crisis could pass, with or without assessments on the drug industry to pay for it. And there is still a need to shore up public pensions. A supplemental spending bill that contains much of the rest of the legislative agenda for Republicans is still hanging around, as is a legislative response to reports of abuse in private homes for the elderly.

Comments (12)

  1. Submitted by Neal Rovick on 05/17/2018 - 10:30 am.

    It seemed clear that job # 1 for the legislature should have been conforming the state to the federal tax policy, which would have been a “technical ” bill that was a bipartisan recognition of reality

    Instead–game-playing and the blame-game.

    ….the next Legislature would have to hurry into session in 2019 and take up meshing the state tax code with the federal rules before people and businesses start filing their returns…

    Ha !

    By my real world calendar, taxes are filed from Jan 1 2019 to April 15. The legislature, in the best of all worlds, with a clean, technical bill agreeable to all, would not have a bill passed until mid-March–at earliest. And then, forms would be available…when ?

    Thanks to all of legislative leaders who claim to represent the people….

  2. Submitted by John Ferman on 05/17/2018 - 10:50 am.

    Tax Conformance Bil

    The legislatures job was to be very simple, “Restore That Which Congress Hath Taken Away.” That is, no Minnesotan should experience a State tax increase due to the Federal tax law. That is not true for some will suffer a State tax increase. The Federal tax law granted corporations and the weakthy substantive tax reductions, the tax bill expands these these tax reductions further. What we need is an article by a real tax expert, not politicians.

  3. Submitted by Ray Schoch on 05/17/2018 - 11:27 am.

    Amateur hour

    I’m reminded – again – of Minnesota’s delusional desire for a part-time legislature, a concept dating from the 19th century, when it might have actually worked. Here in the 21st century, most state legislators spend far more than 5 months of the year on legislative matters, and policy committees regularly convene when the legislature is not in session to do the important behind-the-scenes work necessary to put bills before both legislative bodies when they **do** convene. Until we have an acknowledgment that legislative service is a full-time job, and make all the necessary adjustments and provisions for reality to intrude upon the fantasy world of some members of each major party, we’ll continue to run up against deadlines that bear no relation to what’s going on outside the legislative chambers in St. Paul.

    More than any other of the multiple flaws in the process, this insistence on repeated part-time sessions to complete tasks that ought to be finished in a single session of serving the public that elected them, marks Minnesota’s legislature (and that of several other states, as well) as an amateur operation, with predictably uncertain consequences as a result. That legislators were not able (or perhaps were unwilling, for ideological reasons) to revise the state tax code to conform to the new federal guidelines is simply inexcusable.

  4. Submitted by Patrick Tice on 05/17/2018 - 12:11 pm.

    Every time we are stuck with a GOP legislature

    …We see them fiddling around with ways to punish poor people on Medical Assistance, constitutional amendments designed to institutionalize discrimination and defund government, and (of course) unsustainable and unfair tax cuts. They should have worked out the tax plan from day one, but this is what you get when you elect people who hate government and who have no ability to manage complex processes. Remember this in November.

    • Submitted by ian wade on 05/18/2018 - 11:53 am.

      It’s basically the core tenet of their ideology.

      Punitive measures against people they don’t like. They have no other platform at this point.

      • Submitted by Frank Phelan on 05/18/2018 - 02:18 pm.

        Means to an End

        Punitive measures, and manufacturing a rural-urban divide, are only a means to an end, and not tenets in and of themselves. The real tenet is catering to the point one percent, primarily by allowing them to dodge the taxes that pay for the economy the richly benefit from.

        There not being enough one percenters to get them elected, they need to gin up other reasons for people to vote for them.

  5. Submitted by Brian Scholin on 05/17/2018 - 12:27 pm.

    Omnibusted?

    It seems the clear disfunction in the legislature in recent years is related to the way all actual votes taken are all really high-stakes. This appears to be partly due to rolling everything into an omnibus bill, partly due to so few votes happening until the final days of session, and almost entirely due to political jockeying, which includes the two earlier factors.

    I’m not sure how this can be done, but somehow we need to get back to a lot of small actions, which can stand on their own and be more carefully reasoned, and for which a “win” or a “loss” is not career-ending (or perceived as such) for legislators. This no-holds-barred, winner-take-all stuff is bad for the process, bad for legislators and staff, and really bad for us citizens.

  6. Submitted by Joel Stegner on 05/17/2018 - 10:41 pm.

    .Pass a bill Dayton will sign

    Republicans function in a dream world where they get to pass anything they want and the Governor will sign it. How did that go last year? Dayton showed he would not be messed with and after you sued, he won the court case, because he used all the tools he had at hand following the letter of the law. Aren’t Republicans capable of learning from their mistakes. Did you think he wouldn’t do it again in his last year of office if you sent him bad bills?

    And now you are saying you don’t have enough time left to act? Did he set your schedule? No that was doing. If you have things to do and limited time, you plan accordingly. Once again is it a race to the finish. Didn’t that happen last year as well and many years in the past?

    How much time have you spent taking stupid time-consuming votes? Here is a Republican priority. Passing a bill to require doctors to ask women seeking an ultrasound if they “want” to see an ultrasound of their fetus. Do you think that Dayton was not going to veto that one?

    Why are you boys so cruel – and I do mean boys? How about you instead require doctors to describe in gory details what happens if your Viagra is a little too effective? And you love to talk about excessive regulation limiting people’s freedom? That bill was both and a liberal government had to prevent you from breaking your basic brand promise.

    Please spare us from wasting time on petty political votes to spice up your political pep talks and start making first things first? You guys say you love tax cuts and you are incapable to doing that early in the session? Explain why. Never been done that way. Sorry, if the status quo is not working, you change it. Isn’t Greater Minnesota the part of the state that benefits from state borrowing. You cannot deliver projects out there because you cannot play nice with Governor and give him some of his priority projects – just pick a few.

    He had one clear expectation – support education in school districts with severe budget problems. How hard is it to vote for that? Really.

    Consider your relationship with Dayton and the DFL like a marriage where too many harsh things have been said and done. You are not Donald Trump – you cannot “forget” about what is basic respect – remembering the mother of your children on Mother’s day,,buying her a present on birthday or keeping it zipped in both places when she is on the DL recovering from a pregnancy.

    Sometimes a guy has to apologize and make amends. Your got 5 days to figure out how to fund bills that have Dayton’s priority. Just get it done and have a real record to run on. Incompetence combined with excuses and finger pointing is no way to win elections.

    • Submitted by Tom Anderson on 05/18/2018 - 05:59 pm.

      Actually

      A legislator’s job isn’t to support a bill that the Governor will sign, it is to put forward and pass a bill that their constituents would sign. Some people in the state aren’t real keen on overspending (our budget grows at over 4% per year unlike our incomes) King Mark is done after this term and hopefully the next Governor will realize that bills that make to her desk are the result of a majority of legislators elected by a majority of their constituents creating something that the majority wants.

      • Submitted by RB Holbrook on 05/24/2018 - 10:40 am.

        Not Even Close

        “A legislator’s job isn’t to support a bill that the Governor will sign, it is to put forward and pass a bill that their constituents would sign.” If that’s true, the Republicans have no right to kvetch about bills being vetoed. They can say they passed the bills their constituents wanted, and the Governor exercised his constitutional prerogative to veto them.

        The Governor is given the veto power so that he or she can act as a check on legislative actions. If the Governor is of a different party or governing philosophy than the Legislature, there will be vetoes. It’s really that simple. Our state and federal constitutions do not so much as imply an obligation on the part of the executive to approve bills because of a claim that they are “something the majority wants.”

        “King Mark is done after this term . . .” Is that supposed to be clever?

  7. Submitted by Tom Anderson on 05/17/2018 - 11:06 pm.

    “What wasn’t expected was an ultimatum”

    Anyone surprised by an ultimatum hasn’t been paying attention the last 8 years. The number of bills that have been declared “dead on arrival” or “non-starters” may only be surpassed by all the artificial deadlines (stadium bills), references to “theater of the absurd” or “not serious” comments uttered by the Governor. The number of lines drawn in the sand have created a moat. Incredibly, this won’t be the first time that a special session might be necessary because there “wasn’t enough spending” which has to be a Minnesota exclusive. Please Governor, hold fast and refuse to call a special session, complete your “legacy”.

  8. Submitted by Dennis Wagner on 05/24/2018 - 09:12 am.

    One would

    Expect that the “R’s” would be happy with a guy like Dayton, unyielding in his resolve to get what he thinks is right. A man after their own heart! As noted above though, Dayton lacks the, got to have winners and losers and must punish folk’s in the other party approach.

Leave a Reply