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Gov. Mark Dayton said he and GOP leaders “have some significant differences on the tax bill.”

Glen Stubbe, Star Tribune

Senate Majority Leader David Senjem, left, and House Speaker Kurt Zellers, who said, “Moving parts haven’t changed.”

Glen Stubbe, Star Tribune

Minn. Legislature: Session-ending deal elusive

  • Article by: BAIRD HELGESON and RACHEL E. STASSEN-BERGER
  • Star Tribune
  • May 1, 2012 - 1:05 PM

Republican legislative leaders blew past their self-imposed deadline to end the session Monday as DFL Gov. Mark Dayton urged lawmakers to stick around to finish their work.

"There is more that needs to be done," Dayton told journalists gathered outside his office. "I encouraged them to stay as long as they need to get all this resolved."

Dayton and Republicans who control the Legislature have been unable to broker a global solution on business tax breaks, a bonding package and a new stadium for the Minnesota Vikings.

Legislators recessed for several hours Monday afternoon so leaders could huddle with the governor to see if a deal could be reached. By early evening, leaders emerged to say they could no longer predict when the session might end and that they had made no significant progress toward an overall agreement.

"The three moving parts haven't changed," said House Speaker Kurt Zellers, R-Maple Grove. "I think I'm going to quit guessing on days." The Legislature's constitutional deadline for adjournment is May 21, although they had hoped for months to adjourn in April.

While GOP leaders toiled over the framework of an eventual deal, legislators made a last-ditch effort to patch together a tax relief bill that could stick.

"The time for compromise is over; we are giving him our best work," said House Taxes Chairman Greg Davids, R-Preston. "This is the bill."

Republicans are proposing $200 million in business tax breaks over the next three years that would freeze the statewide business property tax, increase incentives for investors in start-up businesses and offer a sales tax break on capital equipment purchases. Republicans added a Dayton proposal for tax breaks to companies that hire veterans.

To pay for all that, Republicans would pull about $43 million from the state's emergency budget reserves. GOP legislators are banking that new tax revenue from a strengthening economy would quickly refill the state's cash account.

Dayton opposes tapping the state's one-time reserves for ongoing tax breaks and has expressed concern the proposal could dramatically increase the state's projected deficit in coming years.

Davids and Senate Taxes Chairwoman Julianne Ortman, R-Chanhassen, said they believe the tax breaks would spur economic activity and not be a drain on the state budget. "We need to do our best to help generate economic activity in this state," Ortman said.

Dayton said they remain a long way from agreement on a tax bill, a chief GOP priority. The governor has said he won't sign the tax bill without an agreement on a bonding bill and the stadium.

"We have some significant differences on the tax bill," Dayton said.

Both the House and Senate will come back into session Tuesday.

Dayton vetoed two bills Monday, one that would have required a physician to be present when an abortion pill is administered and another that would have allowed the state to opt out of the federal health care overhaul.

Dayton, in a letter to legislators, called the Legislature's health care bill "a drastic departure from our current system of shared state and federal responsibility for delivering health care services."

In what was a rare fit of bipartisan harmony, GOP legislators and Dayton's administration brokered a deal on this year's health and human services budget measure to restore funding for programs that had been slashed as part of last year's budget agreement.

"It's really an extraordinary accomplishment, especially in the context of the other difficulties we've had this session," Dayton said at a ceremonial signing. To applause, he said, "This is cooperative and this is bipartisan all the way."

The measure restores $4.7 million to the Emergency Medical Assistance program, which helps those who need dialysis and cancer treatment, and delays a $5.9 million cut to personal care attendants, who help people with disabilities attend to basic daily needs.

It also delays a rate cut to long-term care facilities, which means paying out an additional $20.6 million. That could give the state time to negotiate a deal with the federal government that could make the reduction unneeded.

Republican Sen. David Hann, R-Eden Prairie, said the cooperation shows that bipartisan agreement is possible.

"We're glad to be here and be a part of something good," said Hann, the chairman of the health and human services committee.

Baird Helgeson • 651-925-5044

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