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Special session now has a site: State Office Building

Gov. Mark Dayton met separately Tuesday with the Legislature’s two top leaders, starting to plot out a special session that threatens to resurrect most of their major political disputes of recent months.

The DFL governor and GOP House Speaker Kurt Daudt met privately for about an hour Tuesday. They emerged afterward to announce that, while they made no progress in their dispute over education funding and several dozen other spending and policy measures, they did agree on a physical location for the so-far-unscheduled overtime session.

With the Capitol itself about to close entirely for repairs, 201 lawmakers will cram into several hearing rooms in the uncreatively named State Office Building. Directly adjacent to the Capitol, it holds offices for all 134 House members, the 28 members of the Senate Republican caucus, some House and Senate employees and a series of House committee rooms. Several of the larger hearing rooms will stand in for House and Senate floor sessions.

“This is going to be a historic event,” said Matt Massman, commissioner of the state Department of Administration. “The best we can tell, this will be the first time, outside of maybe a fire in the late 1800s, that the Legislature will meet outside the Capitol building.”

The decision on the State Office Building — commonly referred to as “the SOB” around the state government campus — was the only agreement in sight Tuesday. Dayton and House Republicans are mired in a dispute over a $17 billion school funding bill that the governor vetoed because he considered its spending increases insufficient, particularly when it came to spending on his top priority, increased access to early-learning opportunities.

Over the weekend, Dayton added more to the special session agenda by vetoing two additional budget bills that together fund the state departments of Natural Resources, Agriculture, Commerce, Employment and Economic Development along with a dozen smaller state boards and commissions.

Dayton priority list grows

On Tuesday, after the Dayton-Daudt meeting, Dayton’s office released a new, lengthy list of the governor’s special session priorities. He now wants a $650 million education spending increase, after vetoing the education bill with a $400 million increase and more than a dozen spending and policy adjustments in the other two vetoed budget bills.

The governor also is seeking:

• A bonding bill to pay for state construction projects.

• Passage of the bill to distribute constitutionally dedicated “Legacy” funds for arts, outdoors and clean water projects, which lawmakers failed to pass on the last night of session.

• A bill to restore voting rights for felons.

• Repeal of a provision approved by lawmakers last week that strips much of the authority of the state’s elected state auditor.

“I think what we’ll do is probably focus on the bills that we have already passed and make the adjusted changes to those that would be required by the governor to get his signature,” said Daudt, R-Crown, after the meeting. He and Dayton plan to meet again Wednesday.

Senate Majority Leader Tom Bakk, the third principal in the negotiations, met separately with Dayton later in the afternoon. Before the meeting, Bakk said he could see the scope of the special session quickly ballooning.

“It’s getting a lot more complicated,” said Bakk, DFL-Cook. Over the weekend, Dayton offered to go along with some tax cuts sought by House Republicans in exchange for a bigger school spending boost. That in turn could also revive efforts to achieve a major transportation spending boost, which emerged late in the regular session as Bakk’s top priority.

“Opening it up as much as it is now potentially opens it up to taxes and transportation discussions, too,” Bakk said. Daudt said he hadn’t yet decided whether he’d be willing to back more education spending in exchange for tax cuts.

Layoff notices going out soon

Meanwhile, the time pressure is growing. Next week, about 10,000 state government employees will get layoff notices in the absence of replacement budget bills for the three that Dayton vetoed. Failure to approve new budgets by July 1 would mean a shutdown of the agencies in question. The result would be smaller in scope than the 2011 shutdown, but still likely to force the closure of state parks and the Minnesota Zoo, among other high-profile consequences.

Minnesota Management and Budget Commissioner Myron Frans said contingency planning is underway. He said if it becomes necessary, officials would rely on a court ruling dating to the 2011 shutdown to determine which state services would be considered critical. If no budget agreement is in sight by mid-June, state officials would form so-called incident teams to coordinate state office closures as needed.

“Unfortunately we know how to do it,” Frans said.


Patrick Condon • 651-925-5049

Ricardo Lopez • 651-925-5044

Minnesota State Auditor Rebecca Otto says hurried new bill would leave counties without an auditor

(This story has been updated.) 

State Auditor Rebecca Otto, whose office audits 59 of 87 Minnesota counties among other responsibilities, said a technical glitch in the state government finance bill that passed in the final hours of the legislative session could leave those counties without any auditing.  

The intent of one section of the bill, which runs to more than 90 pages, was to allow counties to hire private auditing firms to complete the required review of their accounting and finances. By doing so, they would opt out of the current system wherein they pay the state auditor to complete their audit. 

The section of the bill that allows for private audits says it takes effect August 1, 2016. Meanwhile, Otto said she's been advised by her counsel that the bill would repeal a current section of law that gives Otto her auditing authority, but would do so immediately. Otto said this would prevent her office from conducting any audits beginning July 1. 

In other words, there would be a one-year gap wherein counties could not use Otto or a private company to audit their books. This would be especially problematic for counties her office has already begun to audit for a Sept. 30 deadline whose programs could lose federal funding without proper auditor sign-off. 

"It's a total mess," she said. 

The crafters of the measure to allow counties to seek a private auditor say counties can save money by using private auditors, as is currently the case with 28 counties, including Hennepin County. A partial privatization measure was adopted in 2003. 

Otto, who is engaged in a furious lobbying effort to get Gov. Mark Dayton to veto the bill, said her office can better protect taxpayers and taxpayer dollars than private firms without proper oversight. 

Dayton has thus far declined to commit to signing or vetoing the bill. 

Rep. Sarah Anderson, R-Plymouth, who was a chief author of the bill, said she would consult with nonpartisan legislative staff about Otto's charge. She said any drafting error like that could be easily fixed in the upcoming special session. 

Anderson said Otto is "missing the whole point of this legislation." She said counties could save $30,000 to $40,000 by using a private auditor instead of Otto's office. 

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