Gov. Mark Dayton on Monday dropped his insistence that state lawmakers repeal a just-passed state law stripping many of the duties of the elected state auditor, likely clearing the way for a special legislative session by the end of the week. 

"Legislators should expect a special session at the end of this week," Dayton said Monday, saying he would drop his objections to the changes to the auditor's office "with great reluctance" and intends to press the issue again next year. 

That came a few hours after GOP House Speaker Kurt Daudt reiterated that he would not accede to Dayton's demands that the Legislature revisit the auditor issue. "There will be no action taken on this provision in special session. Period," Daudt said. 

While retreating on the auditor issue, Dayton said there's still several outstanding disagreements between himself and House Republicans that need to be settled before he calls lawmakers back to St. Paul. He mentioned three in particular: $5 million he wants for two state programs, one that helps people with disabilities find employment and another aimed at preventing homelessness among the mentally ill; a House GOP push to eliminate a cost-saving benefit for people who power homes or businesses with wind or solar energy; and a provision governing electric rates for businesses. 

At the end of session, lawmakers approved a broader bill that included language allowing Minnesota counties to use private audits instead of submitting to examinations by the auditor's office. It's currently occupied by a DFLer, Rebecca Otto. 

Dayton signed the larger bill but then raised objections about the auditor provision, later vowing he wasn't willing to convene a special session unless the House GOP would agree to repeal it. He later offered to accept a further revision, saying he'd sign off on the changes if they were delayed an additional year, to 2017. Again Daudt refused.

"As I should have learned from your Caucus' intransigence in other matters ... you remain unwilling to accept a reasonable compromise between our differences," Dayton wrote to Daudt Monday, in a letter provided by the governor's office. 

Daudt on Monday noted the rising stakes of the standoff, noting some 9,400 state employees got layoff notices last week and would temporarily lose paychecks if July 1 were to arrive without resolution to the state budget. 

This week, another wave of notices is being mailed out warning of implications of a partial shutdown. Private contractors and vendors who do business with the state will be notified that payments are likely to halt as of July 1. 

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