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The Minnesota Legislature hit its self-imposed 7 a.m. Wednesday deadline to end its special session without sending a single bill to DFL Gov. Mark Dayton, leaving major questions about what will happen next.

In the wake of the second missed deadline was acrimony, finger-pointing and lingering deep partisan disagreement over policy and dollars contained in the proposed new $46 billion two-year state budget.

Lawmakers began what was supposed to be a one-day special session just after the stroke of midnight Tuesday. Twenty-four hours later, not one of the seven outstanding bills had passed nor had a single vote been held. A 7 a.m. adjournment as promised in a signed agreement with Gov. Mark Dayton moved out of reach when architects of a massive $14 billion health funding bill conceded it wouldn't be ready until noon at the earliest.

Even as they filled in details of their budget deal, the pace of action was slow and a bill seeking to change local labor standards set off a fury even though Dayton pledged a veto.

The House took up its $650 million tax-cut bill after 1 a.m. and passed it by a wide margin after 5 a.m. The Senate immediately brought it up for consideration but didn't vote before 7 a.m.. Most of the other bills weren't even made public by then.

House and Senate Republicans pushed hard this session for more than $1 billion in tax cuts, but they reduced the number to reach a compromise with Dayton. Republican Sen. Roger Chamberlain of Lino Lakes, the chair of the Senate tax committee, was pleased with the bill.

“We certainly wanted more. The citizens needed more. We still think they need more, but compromise is necessary. It still has a lot of good components in it for farmers, small business, students, families. In the art of compromise, we still have a bill that will work," he said.

Chamberlain is still stinging over the loss of one of his initiatives: a tax credit for private school scholarship donations. Dayton said the credit amounted to vouchers and he threatened to veto the bill if it wasn't removed.

Democrats blasted the bill as a giveaway to big business, citing the freeze in a commercial property tax inflation clause now in state law. The change is due to cost $94 million in lost tax revenue the next two years and jump by $100 million more the following two. Rep. John Lesch, DFL-St. Paul, said main-street businesses wouldn't make out as well as large corporations and real estate managers.

"Folks who own skyscrapers and malls who live out of the country are getting an ore boat's worth and your folks are getting a row boat's worth," Lesch said.

The bill also includes tax cuts for Social Security recipients, college graduates paying off loans, tobacco distributors, farm land owners and others. There are also exemptions for a new professional soccer stadium in St. Paul and for Super Bowl events to be held next year in Minneapolis.

An education bill was also awaiting final action.  Under the proposal, Minnesota schools are in line for 2 percent increases in their per-student allowances in each of the next two years. The increase in what's called the basic formula comes at a cost of more than $330 million dollars. That's what Dayton sought in his budget and is higher than the Republican-led Legislature had planned.

The allowance increase is important because other state aid is tied to that amount.

If the bill becomes law, schools would receive a minimum of about $6,188 per pupil next year and slightly more the year after. The bill also contains more money for preschool programs, though not as expansive as the DFL governor sought.

House Education Finance Chairwoman Jenifer Loon, R-Eden Prairie, said the plan delivers on "putting students first in Minnesota."

The plan also includes changes to the teacher licensing system and policies for how school districts weigh seniority when considering layoffs.

The labor bill was kept out of the budget plan. It aims to prevent cities from requiring higher minimum wages or employer-offered benefits than demanded under state law. Called a uniform standards bill by supporters and a preemption plan by others, it would roll back sick-time ordinances adopted in Minneapolis and St. Paul and head off drives for $15 an hour minimum wages.

Under a signed agreement for the special session, the Legislature was allowed to consider the bill. But Dayton vowed to veto it.

Some lawmakers were caught off guard Tuesday when the bill was released. It also included ratification of some state worker contracts, measures to combat wage theft, pension fund revisions and reinstatement of expired paid parental leave benefits offered to state workers.

Dayton reacted angrily in a written statement.

"It is unconscionable that Republican legislators would pit the earned financial security of hardworking state employees and retirees against the rights of local officials to make the decisions for which they were elected by their citizens," he said. "Nevertheless, I have said that I will veto the preemption bill, and I will honor that commitment."

Outside the House chamber Tuesday evening, dozens of state employees gathered to press their case for the parental leave measure. Health Department epidemiologist Jenna Bjork is due on May 30th and was counting on the offering.

"This is a benefit that has been in place for employees since last July 1st. It would be something they are ripping away from me right at the last moment," Bjork said "It's stressful. I want to prepare for my maternity leave as much as possible and I would really appreciate this benefit."

State employees can take unpaid leave or use up accrued vacation and sick time, but some had built the paid leave into their financial planning.

Rep. Laurie Halverson, DFL-Eagan, addressed the gathering and told them to keep up the pressure.

"Preemption takes away benefits from minimum wage workers in Minneapolis and St. Paul. And this, if we don't pass it, takes away earned benefits from our state employees," Halverson said.

"People have made their plans. And any family who has brought a baby into their family knows that you plan way far ahead for your leave, you plan way far ahead for day care, you plan your budget way far ahead," she said. "If this is a benefit you are counting on and it is getting taken away and you're home with your baby, you're making choices about whether you come back to work early ... it really throws families into chaos."

The agreement to conclude by 7 a.m. must be altered at some point. House Minority Leader Melissa Hortman, DFL-Brooklyn Park, said she wouldn't consent without concessions. That drew rebukes from the Republicans.

"Your side has decided apparently to slow-roll this whole process," House Majority Leader Joyce Peppin, R-Rogers, accused Hortman during a prickly exchange around 2:30 a.m.

Hortman, DFL-Brooklyn Park, said she was living up to the agreement but wouldn't stop her members from having legitimate policy debates.

"People have election certificates. And they don't work for us," Hortman said. "They work for the people of Minnesota."

Several other bills, from a transportation plan to a funding bill for state agencies, hadn't even been made public by 3 a.m.

Republicans were already testing out the themes they'd use in post-session barnstorming tours.

House Speaker Kurt Daudt and Senate Majority Leader Paul Gazelka were highlighting their accomplishments ahead of special session votes some of the unresolved budget bills. Lawmakers had a $1.5 billion surplus to work with but still needed extra time. Daudt said he was pleased that much of that money was going to tax cuts and transportation.

"I think those are exactly the kinds of priorities that Minnesotans sent Republicans here to the legislature to accomplish," Daudt said. "So, we’re really proud of that.”

MPR News reporter Brian Bakst contributed to this report.

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Minnesota lawmakers struggle to advance a special session toward conclusion, with their budget work creeping along slowly.

Lawmakers stumble along in special session

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