As Legislature heads for final weeks, Dayton agenda in question

Gov. Mark Dayton's political winning streak faces a tough test in the final weeks of the legislative session, as ambitious education and transportation spending proposals collide with the radically different priorities of the House Republican majority.

Still fresh off a decisive re-election victory last fall and as popular as ever according to opinion polls, Dayton crafted a 2015 legislative agenda that would build on a hefty list of first-term accomplishments. But with just six weeks until legislators adjourn, those plans face uncertain prospects at the Capitol.

The DFL governor's call to plow most of a $2 billion budget projected surplus into government programs, the majority of it for schools, is miles apart from the House Republicans' goal of hefty tax cuts.

Dayton has won none of the GOP support needed to pass the wholesale gas tax increase that was to have been the funding centerpiece of his $11 billion transportation proposal, despite bipartisan proclamations about the importance of rebuilding roads and bridges.

His signature priority — a $343 million spending boost to provide a preschool option at every public school statewide — has not won universal backing even from members of the Senate's DFL majority.

"I don't expect to get everything I proposed," Dayton said in a recent interview. But, previewing a theme he promised to elaborate on in his annual State of the State speech Thursday, he said the projected surplus vindicates decisions made in his first term.

"The fact we have a $2 billion surplus is not because we raised taxes," Dayton said. "It's because Minnesota's economy is expanding. I think we're on the right track, and I think we need to continue and take advantage of the situation we find ourselves in now."

Dayton wants to build on his successful 2013 effort to fund all-day kindergarten statewide. But House Republicans are not on board with what would be an expansion of the K-12 school system to accommodate 4-year-olds. When Senate DFLers set parameters for education spending in their budget blueprint, they chose not to fully fund Dayton's preschool plan.

"It's just the economic reality, that it's got to be trimmed back," said Sen. Chuck Wiger, DFL-Maplewood, who chairs the committee that sets the Senate's education budget.

Senate Assistant Majority Leader Katie Sieben, DFL-Newport, supports Dayton's preschool initiative, but she said many senators, including herself, represent school districts that already face budget deficits this year.

Dayton has proposed 1-percent increases in the per-pupil aid formula in each of the next two years. Some districts already offer preschool, which has led some House Republicans to suggest means-testing. Sieben said Senate DFLers might try to phase in preschool funding over several years.

If Dayton has work to do in selling fellow DFLers on his preschool initiative, the hill is that much higher with Republicans on nearly every major proposal. Leaders of the new House majority have rejected most aspects of Dayton's 2015 agenda: his call to spend most of the surplus; his gas-tax-fueled transportation proposal; his $330 million initiative to upgrade rail safety; and his plan to require 50-foot buffer strips around the state's lakes, rivers and streams to protect water quality in the face of agricultural runoff.

"The number of full-time state employees has grown exponentially" under Dayton, said Rep. Sarah Anderson, R-Plymouth, chairwoman of the House State Government Finance Committee. "There's a whole host of areas that are ripe for right-sizing. I think that's what our charge is, putting state government in perspective with our true priorities."

There is a massive gulf — about $1.5 billion — between Dayton and House Republicans over how much to spend on health and human services programs. The GOP is tinkering with a proposal to eliminate MinnesotaCare, the state's subsidized insurance program for workers without other affordable health care options. Rep. Matt Dean, chairman of the House Health and Human Services Finance Committee, said releasing those individuals into the state's health insurance exchange could serve to make the latter program more viable because it would have more participants paying premiums.

"We're spending $1 billion over two years for 50,000 family policies," Dean, R-Dellwood, said of the MinnesotaCare subsidy. "We absolutely can't afford it as it is currently, and we need to find a sustainable way for lower-income Minnesotans to afford private health insurance long-term."

Dayton said that eliminating MinnesotaCare "is not going to happen" on his watch. "I'm not going to let Minnesota's health care policies, which have received nationwide acclaim, be dismantled without some thought," Dayton said.

Then there's Dayton's $11 billion transportation proposal, unveiled to much fanfare at the beginning of the session. House Republicans have called transportation a top priority, but their $7 billion proposal includes none of the transportation tax or fee increases included in Dayton's plan or a similar proposal from the Senate DFL. Instead the Republican proposal depends on money diverted from the general fund, along with accrual of bonding debt.

Dayton has not abandoned his transportation proposal. But there are signs it's become less of an emphasis.

Asked in the interview his bottom line for what would make a successful session, Dayton — after noting he won't get everything he wants — ran through his early-learning initiative; tuition freezes at public colleges; and nearly $200 million in tax cuts he's seeking tied to child care expenses, for working families and for education expenses. He did not mention his transportation plan.