Dayton, GOP hammering out tax deal

DFL Gov. Mark Dayton and Republican legislative leaders have been holding a series of closed-door meetings Tuesday on some tax policy changes that they might be able to agree on before the end of the 2012 session.

The House and Senate have already passed significantly different tax bills that are aimed at boosting the economy through some tax breaks for businesses. The governor has been critical of the proposed funding sources in the bills, which includes dipping into the state's budget reserves in the Senate version.

Following a morning meeting with GOP leaders, Dayton said leaving the reserves alone is a basic requirement for a deal.

"Very important that we not have huge consequences for the next biennium, because we're already looking at a projected $1.1 billion deficit for the next biennium," Dayton said. "We need to make sure that we're not further digging ourselves into deeper hole for that."

Republican Sen. Julianne Ortman, the chair of the Senate Tax Committee, said she thinks an agreement can be reached to repeal the marriage penalty, lower property taxes and provide some credits for businesses.