A state budget showdown between Gov. Mark Dayton and Republican state lawmakers was on hold Wednesday, when one GOP senator’s unexpected absence highlighted the fragility of the party’s small Senate majority.
GOP leaders had hoped to keep up momentum from Tuesday evening, when they pulled out of talks with Dayton and began to pass a series of spending bills that the DFL governor is promising to veto.
On Wednesday, the state House continued to process bills with billions in spending plans, along with a raft of policy changes. But in the Senate, where Republicans have just a one-seat majority, Republican Sen. Carla Nelson of Rochester left St. Paul to be with her gravely ill father.
Senate Majority Leader Paul Gazelka, R-Nisswa, conceded that his party would be unable to pass any budget bills until Nelson returned. “We can’t pass any budget without 34 Republican votes,” he said. It’s unclear when that process could resume, or for that matter when Dayton and legislative leaders will start talking budget again. Dayton and a number of prominent legislators have plans to participate in festivities related to the fishing opener this weekend in the St. Cloud area.
Meanwhile, the state House on Wednesday approved the Republican-crafted transportation funding plan, and a $1.1 billion tax break package. The tax plan, focused on targeted cuts and credits for business and property owners, senior citizens, college students, parents paying for child care and other groups, accounts for the bulk of how Republicans want to use the state’s $1.65 billion surplus.
The debate over whether that surplus should be returned in the form of tax breaks or used to help fund state services is at the heart of the Republican-DFL divide over the $46 billion budget. Arguing for the tax bill, GOP lawmakers said a large surplus means the state has forced taxpayers to contribute too much money — and should return it.
“We would like to give back to the hardworking Minnesotans who toil in their labor every year to get ahead, in the face of inflation that is eating them up,” said Rep. Steve Drazkowski, R-Mazeppa.
But DFLers said similar moves in previous years when Minnesota had a budget surplus, as is the case now, were followed by years of budget deficits. Some took issue with specific tax incentives that were included or left out of the measure.
Rep. Laurie Halverson, DFL-Eagan, criticized a provision that rolls back tax increases on cigarettes, which she said would help tobacco companies broaden their customer base in Minnesota.
“This isn’t a tax break for the people of Minnesota,” she said. “This is a tax break to ensure big tobacco companies can keep coming into our state, hook our kids on their products, and reap hundreds of millions in profits on suffering of people in our state.”
Others argued that Republicans had shortchanged critical state programs in order to deliver tax breaks. Dayton’s budget plans focus much of the surplus on priority areas like early education and human services, while GOP plans aim to rein in annual growth in state spending.
Rep. Paul Marquart, DFL-Dilworth, said Republicans should reduce the size of tax cuts and embrace ideas like Dayton’s plan to spend $175 million expanding prekindergarten programs in public schools.
“We have a budget where 70 percent of it is a tax cut,” he said. “It doesn’t leave much more for helping people around the state.”
DFLers were also critical of Republicans’ transportation spending plan, although changes made late Tuesday night attempted to address some of Dayton’s top concerns. Among them: GOP leaders removed a provision that would have required legislative approval to build new light-rail lines and included more funding for buses.
It’s unclear if those adjustments will be enough to win Dayton’s approval; DFL lawmakers said Wednesday that they are still concerned about how Republicans plan to fund roads, bridges and transit.
Dayton did not take action Wednesday on five budget bills — including those for health and human services, environment and education — that reached his desk the night before. The governor has three days to sign or veto those measures.