State DFL leaders and House Republicans are edging toward a high-stakes showdown Monday over a hotly debated proposal to repair roads and bridges, an effort that is already testing political will in a pivotal election year.

How to fund the state’s transportation needs over the next decade has emerged as the linchpin for any global agreement to come together in the final week of the legislative session.

Gov. Mark Dayton’s administration is working over the weekend to craft what he is calling a last-ditch compromise to at least partly address billions of dollars in needed road and bridge work.

“Transportation will be the tipping point,” Dayton said in a Thursday interview. “If that falls apart, I don’t know that we can pull the rest of it together. On the other hand, if we pull that together, I think the framework can be there for the other pieces.”

The latest offer is likely to include higher vehicle license tab fees and possibly a scaled-down gas tax hike. Fearing that might be the case, House Republicans hastily called a news conference Friday to reiterate their unbending opposition to a gas tax increase.

“The bottom line here is: His offer on Monday needs to not include a gas tax to be considered seriously,” said House Speaker Kurt Daudt, R-Crown.

Time is dwindling at the Capitol; the legislative session must adjourn May 23. Dayton’s new proposal Monday is expected to touch off a frantic final round of negotiations. With a state budget already in place for another year, lawmakers are under no legal obligation to do anything more. But in an election year when all 201 legislative seats are in play, state leaders are eager to keep campaign promises and show results.

Daudt is fighting to hold his House majority this fall, after sweeping into power urging transportation fixes and vowing to cut government spending. In recent months, Daudt has steadfastly opposed a gas tax hike, but he has shown a sliver of openness to raising license tab fees to create an ongoing stream of money for roads and bridges.

Under pressure from constituents and business groups, state leaders are hoping to cap a yearlong push with a transportation package to fund an estimated need of $600 million annually over 10 years. About $400 million would maintain Minnesota’s existing road-and-bridge infrastructure, and the remaining $200 million would go toward expansion.

Other priorities

Settling on the size and scope of a transportation deal would determine how much of the state’s $900 million budget surplus would be available for other priorities, such as rural broadband expansion, racial equity proposals and tax reductions. It could also bust up the political stalemate over a bonding package for new projects around the state, with a yawning gap of nearly $1 billion between DFLers and the GOP.

Other top priorities for Dayton and some legislative leaders include approving funding for staffing increases at mental health hospitals in St. Peter and Anoka, bolstering cybersecurity for state government and funding a voluntary prekindergarten program.

These more modest proposals have been overshadowed by the transportation debate in recent weeks.

Business groups say the state’s crumbling roads and bridges impede economic growth because farmers, manufacturers and other producers rely heavily on the state’s infrastructure to bring their goods to market.

A powerful coalition of business leaders has also backed the Southwest light-rail extension that would connect Minneapolis to Eden Prairie, a project whose eligibility for nearly $1 billion in federal dollars is about to expire. House Republicans have opposed the project, saying the state should not provide a $135 million local match that would unlock the federal cash.

DFL leaders are pushing for a half-cent metro-area sales tax that could provide the necessary local contribution, a proposal that has drawn a more favorable reaction from GOP leaders. A local tax could be more palatable to GOP legislators in rural districts where there is little support for light-rail transit in the Twin Cities.

Hope for a deal

Despite the wide gulf between competing plans on transportation, a public works bill and tax cuts, some leaders say a compromise could still come together in the final days.

“There’s a deal to be had,” said Minnesota Management and Budget Commissioner Myron Frans, one of Dayton’s top advisers in negotiations. “There’s a pathway to get there.”

Senate DFLers are also pushing to establish a statewide paid family leave program, and they share Dayton’s goal of resisting large ongoing spending obligations that could push the state into deficit in the future.

House Republicans, meanwhile, are pushing for tax cuts, an effort that, like transportation, began last year and has now spilled into the second legislative session of the biennium.

The status of a bonding bill is also unclear, partly because it’s likely to include local transportation projects. Until leaders establish the size of a transportation bill, the fate of dozens of public works projects are still unclear. DFL leaders have criticized House Republicans for not unveiling details of their $600 million bonding proposal.

In recent weeks, several interest groups have launched lobbying blitzes at the Capitol, hoping to put pressure on the Legislature for state bonding and transportation spending.

Cities and municipalities around the state are clamoring for fixes to their drinking water systems, warning that without a public works bill, they will be forced to raise water rates. Leaders of outstate cities met with legislators this week to press for clean water funding, transportation work and a boost to local government aid.

Already, legislators are working behind the scenes on areas that could bring compromise.

Rep. Pat Garofalo, R-Farmington, said he is optimistic that a deal could still come together, but insisted that House Republicans will not budge in their opposition to new gas taxes.

“Nothing is going to change in the next week to make Republicans support a gas tax increase,” Garofalo said, adding that if “the Democrats drop that, things will move very rapidly.”