Gov. Mark Dayton vetoed the GOP's tax bill on Friday, which he said would add to future deficits and was not fair to homeowners, renters, seniors and farmers.

"It has been my consistent position throughout this session that any new spending increases or tax reductions had to maintain the current budget reserve and avoid increasing future deficits," he wrote in his veto letter.

He said the bill would add $145 million to an already out-of-balance budget in the next biennium. And he said it would provide $45.4 million in tax relief to businesses, but only $4.1 million in relief to homeowners "and virtually none to renters, seniors and farmers. This imbalance is unfair...."

The Republican-controlled Legislature marked this bill as one of their top priorities this year. They argued that freezing property taxes for businesses and cabin owners, sweetening tax credits for startups and other business-friendly improvements would do more to create jobs than bills Dayton is supporting. Those include a new stadium for the Minnesota Vikings and a statewide capital projects bill.

Both those bills are awaiting action next week, and GOP leaders have made it clear that Dayton's veto of their top priority could hurt the chances of passage of his priority items.

Dayton said the GOP tax bill, which drew a smattering of DFL votes, "would not begin to undo the damage" from last year's property tax changes, including reductions in aid to cities and elimination of the homestead credit. He denied Republican charges that he had agreed to this bill and then gone back on his word, saying there were back-and-forth negotiations which eventually broke off without an agreement.

"I remain committed to broad-based, comprehensive property tax relief for all property taxpayers, including -- but not limited exclusively to -- businesses,'' he wrote.

Minnesota Chamber of Commerce President David Olson said he was deeply frustrated by Dayton’s veto. The tax bill was a top priority of the business community and Dayton nixed it as he is counting on them to help muscle a few more votes for the Minnesota Vikings stadium proposal.
“We are actually taken a little pause,” Olson said of the stadium effort. “He vetoed one of our top priorities. I am saying myself, ‘Gee, I am helping him with his top priority and he isn’t helping us with ours.' ”
Senate GOP leaders were angry at the governor's veto and suggested it could affect remaining issues. "The governor has burned what may be the last bridge to working with legislators at the Capitol this year," said a statement by Sen. Julianne Ortman, R-Chanhassen, the Senate's Deputy Majority Leader and chair of the Senate Taxes Committee.