Dayton: No limits, no special session

Gov. Mark Dayton delivered an ultimatum to GOP legislators Tuesday: He won't call a special session unless they agree to limit its scope to approving disaster relief and repealing a much-criticized tax on farm machinery repairs.

Dayton sent the written proposal for a limited session to Republican leaders after a week of behind-the-scenes talks between his office and legislative staffers failed to broker a deal on the terms of the session.

Republicans are pushing for a more wide-ranging session to repeal other new taxes, which could blow a hole in the state budget and touch off a new round of budget fights.

Dayton is insisting on a session starting 2 p.m. Sept. 9 with a guaranteed adjournment by 10 a.m. the next day. No other bills or significant amendments could be considered, under the proposal.

The governor doesn't want the session to become "a complete free-for-all that could last who knows how long," said Bob Hume, a Dayton spokesman.

Republicans want more.

"If we are going to do some tax relief, we should look at a broader array of those taxes," said Senate Minority Leader David Hann, R-Eden Prairie.

Dayton had initially insisted legislators limit the agenda to storm relief, usually a routine, brief and strongly bipartisan event. State leaders need only about $5 million to pay the state's share of the damage from storms that socked more than a dozen counties in southern Minnesota earlier this summer.

But the governor changed his mind last week and also wants to repeal a sales tax on farm and agricultural machinery repair.

The agriculture tax is part of a menu of more than $300 million in new business taxes that Dayton and DFL legislative leaders approved this spring.

Wiping out the sales tax on farm machinery repair only costs about $28 million, a tiny fraction of the state's multibillion-dollar budget. Legislators could simply use money expected to be left over at the end of the budget cycle and spare legislators from a more complex and time-consuming rethinking of the state's finances, Hume said.

Republicans like Hann are pushing for deeper tax relief, however, including a repeal of the warehousing tax, about which many business owners have complained loudly. They say the commercial warehousing tax will trickle down and eventually cost all consumers.

Dayton has said he didn't like any of the business taxes but agreed to them as part of a much larger tax bill that included his long-sought income-tax increase on high earners.

The governor has said he'd consider repealing the warehousing tax next legislative session, once budget officials have a better sense of the economy and the pace of tax collections. The warehousing tax kicks in next April.

Republicans have been calling this a do-over session for DFLers, a chance to quickly and quietly fix part of new taxes that came up only in the closing moments of the last legislative session.

"We should undo two of Governor Dayton's damaging tax increases — sales tax on warehousing and on equipment repairs — to prevent hardworking taxpayers from paying more," Hann said.

House Speaker Paul Thissen said their willingness to reconsider the businesses taxes is proof that DFLers are listening to Minnesotans.