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Gov. Mark Dayton reported no progress after brief talks with GOP legislative leaders Tuesday at the State Capitol. Dayton said he has not given up on his proposal to raise income taxes on the state’s 7,700 millionaires but is considering other options.

Leah Millis , Star Tribune

'Same gulf' divides Dayton, GOP

  • Article by: RACHEL E. STASSEN-BERGER, ERIC ROPER and MIKE KASZUBA
  • Star Tribune staff writers
  • July 7, 2011 - 6:41 AM

Hopes for a deal to end the state budget stalemate dimmed Tuesday, with Republicans saying they have reverted to a $34 billion, no-new-revenue budget proposal.

"That's the only thing that we have on the table right now," House Speaker Kurt Zellers, R-Maple Grove, said after emerging from a brief resumption of negotiations after the holiday break.

DFL Gov. Mark Dayton confirmed that after meeting with GOP leaders, "We've got the same gulf between us that we've had all along." Dayton has repeatedly said that a $34 billion budget is "draconian" and wants to spend about $2 billion more.

Meanwhile, a clan of Minnesota political elders moved to step into the budget dispute as Minnesota heads into its sixth day of a widespread government shutdown.

Former two-term Republican Gov. Arne Carlson and former U.S. Vice President Walter Mondale, a Democrat, on Tuesday convened an ad hoc budget group chaired by bipartisan former lawmakers and commissioners charged with developing a "third way" to end the impasse by week's end.

"Today, we are being challenged," Mondale said. "We're in a place where both sides have to sit down and think freshly about how we can come out with a result that serves Minnesota."

Dayton, who previously sought a court-appointed mediator for the budget dispute, gave the group his help, aiding in its formation over the weekend and offering Budget Commissioner Jim Schowalter as a resource.

Carlson said he had called Dayton over the weekend about forming a bipartisan group. Dayton called Mondale and by Tuesday a group had formed that includes former Finance Commissioners Jay Kiedrowski, John Gunyou, and Wayne Simoneau; former Wells Fargo CEO Jim Campbell; Affinity Capital Management President B. Kris Johnson, and former state Sen. Steve Dille.

Mondale and Carlson said they will not be part of the group, which will hold its first meeting Wednesday.

News of the group brought an acid response from the state Republican Party, which issued a news release that characterized Carlson as ego-obsessed and Dayton as "befuddled."

Senate Majority Leader Amy Koch, R-Buffalo, offered a more measured response. "Dayton, House Speaker Kurt Zellers and I were elected to be the principal negotiators on how to best solve the state budget deficit," she said, but added, "I am always open to hearing thoughts and suggestions from all Minnesotans."

As the consequences of a shutdown began to ripple across the state, Dayton expanded his definition of "critical services" to include special education aid, child care assistance, services for the homeless and disabled, and other services for the poor.

That request now awaits a ruling from the court-appointed "special master," retired Justice Kathleen Blatz, who now has about 40 appeals stacked before her and more to come.

On Tuesday alone, Blatz heard from auto dealers wanting to restart transfers of vehicle title and registration information, from the state Human Services Department, which wants to reopen the licensing division that conducts criminal background checks and monitors facilities for 23,000 human service providers.

Others appearing Tuesday were Store to Door, a grocery service for the elderly, along with the Minnesota Trucking Association, which wants state rest areas to reopen so that long-haul truckers have a place to rest and sleep.

Truck drivers "would have to make one of two illegal choices" should the state's rest stops stay closed, said John Hausladen, the president of the Minnesota Trucking Association. They could park on the side of the road, creating a hazard for motorists, or violate state regulations that require them to rest for 10 consecutive hours after 14 hours of driving.

Blatz has yet to issue recommendations on any requests for continued state funding.

Weekend organizing

Dayton spent part of his weekend trying to shake loose some moderate lawmakers to support a compromise deal. He wouldn't name names Tuesday.

"We've had some conversations with some moderate lawmakers," Dayton said. "We're just asking them what their ideas are, if there's any willingness to consider any possibility, nothing specific." Dayton said he has not given up on his proposal to raise income taxes on the state's 7,700 millionaires, but said he is entertaining other possibilities.

"We've talked in the past about tobacco and alcohol tax increase," Dayton said. "We talked just briefly in our previous meetings about the sales tax, broadening the base, and even broadening the base enough to make up some revenue and lower the overall sales tax rate. I'm willing to consider any possibility. ... We're out of desirable options, from my perspective."

Republicans say their options are also limited, since Dayton rejected their last offer to raise non-tax revenue.

"That offer was refused by the governor,'' Zellers said Tuesday. "If it's asked to be put back on the table, that's something we'll have to consider at that point in time."

Despite the deep differences, state negotiators plan to get back to the table Wednesday at a 1:30 p.m. meeting. That meeting will focus on the thorny Health and Human Services budget. On Thursday, they will take up education spending, which eats up about 40 percent of the state's budget.

Rachel E. Stassen-Berger • Twitter: @rachelsb Mike Kaszuba • 651-222-0673

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