DFL Gov. Mark Dayton, heading into his final year in office, says he is ready to make a major concession to Republican leaders in the Legislature in order to win approval of several major initiatives on his wish list.

The governor said he will no longer insist that they repeal some recently enacted tax cuts and policy provisions in order to restore the House and Senate operating budgets. Dayton line-item vetoed those budgets in May, triggering a constitutional standoff.

He said he’ll still fight against the GOP’s tobacco tax reductions and other provisions he opposes, but he made it clear he’s ready to restore the Legislature’s full funding.

“I don’t want to protract this,” Dayton said in a wide-ranging interview with the Star Tribune. “We have the people’s work to do.”

Instead, the governor wants to shift the focus to issues like expanding prekindergarten access in public schools, passing a public works construction package and overhauling standards for senior care.

Having prevailed over the Legislature at the Minnesota Supreme Court after a monthslong legal and political battle, Dayton says he hopes to rebuild his tattered relationship with Republican legislative leaders — but won’t shelve his own priorities in the name of making peace.

Dayton’s court battle with the Legislature cast a shadow that threatens to linger into the 2018 legislative session. His relationships with House Speaker Kurt Daudt, R-Crown, and Senate Majority Leader Paul Gazelka, R-Nisswa, are at a low point. A handful of recent departures by top aides and Cabinet secretaries — with more possible as his term winds down — will leave Dayton without some trusted advisers as he navigates those and other emerging challenges, like the wave of allegations about sexual harassment in state government.

Around the Capitol, it’s not hard to find people already wagering that Dayton’s last legislative session, which starts Feb. 20, will be an uphill battle for both the governor and lawmakers.

“Both sides seem pretty dug in right now,” said Senate Minority Leader Tom Bakk, DFL-Cook.

A clean slate?

The House and Senate have been in financial limbo since Dayton vetoed their budgets. The Legislature sued in response, arguing that Dayton violated the state constitution by effectively “abolishing” the legislative branch. After months of legal wrangling and hundreds of thousands of dollars in attorney’s fees, the Minnesota Supreme Court handed Dayton what he sees as a clear victory: ruling that the veto was within his powers and that the Legislature has enough money to stay in business at least until late February.

In Daudt’s estimation, the Supreme Court ruling failed to settle the dispute because it didn’t determine if the governor’s maneuver had been an attempt at coercion, only that it hadn’t deprived the Legislature of the funding necessary to keep operating for the next few months. Minutes after the court’s decision was released, Daudt led the charge to pass a rule that restricts legislative staff from helping the governor’s office or the rest of the executive branch to draft bills for the next legislative session.

“I could probably lay down on the tracks and do whatever the governor wanted, but that’s going to damage the coequal balance of government,” Daudt said.

Gazelka, who could not be reached for comment, has said publicly that he is also open to meeting with other GOP and DFL legislative leaders, as well as the governor. But he also expressed deep concerns over the court’s decisions and the lingering implications of Dayton’s veto.

Daudt said he doesn’t expect a special session this year. He said he is still frustrated with Dayton and doesn’t trust him. And while he’s open to meeting with Dayton and working on shared goals like a construction bonding bill, he said it’s Dayton who needs to mend fences first.

“We will meet in session and pass another funding bill,” Daudt said. “If he wants something, if he wants to talk about it, he knows my phone number.”

The governor said he is determined to push hard on his agenda during his final regular legislative session.

Dayton has a list, 13 bullet points long, of what he wants to accomplish in the last of his eight years in office.

“I have 411 days left until Jan. 7, 2019, and those are all important days,” Dayton said in an interview. “And I’m going to go out with all guns blazing on behalf of what I was elected to do and what I still want to accomplish.”

‘Incredibly motivated’

As Dayton wrangles with the Legislature’s Republican majorities, he’ll also have to consider the concerns of DFLers in the House and Senate. Bakk said the uncertainty around the House and Senate budget has weighed heavily on DFL lawmakers and staff, as it has with their GOP counterparts. He said it’s clear Dayton and Republican leaders will have to find a way to move past their old disputes, such as the battle over the tax-cut bill, to make any progress next year.

“The Legislature has to go home with a budget,” Bakk said. “We’ve got to figure out how we accomplish that, so people are going to have to be willing, if they’re not willing to reopen the tax bill, to consider some other things that might build a bridge to a resolution.”

For his part, Dayton said he’s ready to consider new ideas while keeping up the fight for the issues he’s championed for years. He said he’s feeling optimistic and energized; 10 months after receiving a prostate cancer diagnosis and collapsing during his State of the State address, the governor said he is cancer-free. He said he’s determined to leave the state on solid footing when he leaves office and is still too focused on his current job to consider what will come next.

“I’m incredibly motivated,” Dayton said. “I have a big agenda before me. Each day, I’m always mindful of what a phenomenal gift I was given to be in this office for eight years, and I intend to give it my utmost and work in a cooperative, constructive way with legislators and interest groups. I don’t want to go out throwing bricks. I want to go out building castles for Minnesotans.”