Dayton rejects GOP-backed tax bill as session wanes
ST. PAUL, Minn. (AP) — Gov. Mark Dayton on Thursday vetoed a GOP-backed bill that would have aligned Minnesota’s state tax code with federal changes passed last year, paving the way for an around-the-clock weekend of work in search of a deal that may not materialize before time runs out on the session.
The Democratic governor rejected the bill with about 20 grade-school students standing behind him at St. Paul’s Bruce Vento Elementary School, who counted down and shouted “Veto!” as he stamped the legislation. Dayton said the bill tilted toward the wealthy and corporations and left “crumbs to people who need it.”
Dayton had warned he wouldn’t sign the bill unless the Legislature provided $138 million in emergency aid to schools facing financial shortfalls. Republicans have resisted, saying the Democratic governor’s request came too late and would provide money to all public schools — not just those with budget trouble.
Compromise happens fast and late at the Capitol. But with less than four days of work remaining, Dayton and Republican leaders were still trading barbs in press conferences. The two sides just started negotiating Thursday in search of a deal on drastically different tax plans and other spending proposals.
There’s not the same level of pressure to agree because Dayton and the Legislature already met their constitutional obligation to pass a two-year budget last year. Dayton isn’t running for a third term this fall, and state senators won’t face voters until 2020; only the 134 House members are on the ballot.
Still, there is plenty on the line. A tax bill could help avoid a logistical nightmare for tax filers next year as well as some incidental tax hikes. Lawmakers hope to pass bills addressing opioid addiction and abuse of elders at state-regulated facilities. Dayton said his school funding request was necessary to forestall layoffs at 59 school districts across the state.
“Teacher layoffs are going to be draconian around the state if this funding doesn’t go through,” Dayton said.
Republicans who control the Legislature had hoped Dayton would sign their tax bill, which would cut taxes for lower- and middle-income Minnesotans through modest reductions to income tax rates. But after resisting Dayton’s call for school funding for weeks, Senate Majority Leader Paul Gazelka suggested Thursday some form of additional money for schools could help break the legislative logjam and win Dayton’s approval on a tax bill similar to the one he just vetoed.
Gazelka said lawmakers were exploring some options to fund schools in need.
“We have to work out, is there a way to find the resources or solutions that we haven’t seen yet that can answer his education question?” he said.
Conforming to the major federal tax overhaul passed late last year has been a mammoth undertaking for state lawmakers. And failing to do so would make tax filing more complicated for Minnesotans and hit them with higher bills.
School funding and taxes are just two of many priorities the Legislature is aiming to accomplish before adjourning May 21. Top lawmakers were also working to put the finishing touches on a package of government spending increases, including $28 million to help schools improve security in the wake of the fatal school shooting in Florida this year.
Sen. Julie Rosen said she and other GOP lawmakers planned to meet with the Dayton administration Thursday night to start removing provisions Dayton wouldn’t support. But she said she planned to include funding to tackle opioid addiction and revamp oversight of senior care facilities.
Both were some of Dayton’s top priorities for the year that he had insisted be sent as stand-alone bills. But wrapping them into a larger bill could make it tempting to sign.
“The bill looks attractive, then, to the governor,” Rosen said.
The Legislature adjourns Monday, but Sunday night is the deadline to pass bills. Dayton warned again Thursday that he will not call a special session.