Dayton says he will veto tax bill

Gov. Mark Dayton delivers his final annual State of the State Address
Gov. Mark Dayton delivers his final State of the State address in the Minnesota State Capitol House Chamber March 14, 2018, in St. Paul.
Glen Stubbe | Star Tribune via AP file

With a midnight Sunday deadline looming, DFL Gov. Mark Dayton and Republican legislative leaders spent Wednesday talking at each other rather than negotiating an end-of-session deal.

Republicans in the Minnesota Senate passed the tax bill negotiated with the House and sent it to the governor without his approval. The vote was 34-33 along party lines. The bill would reduce income tax rates and better align the state tax code to recent federal changes.

But before the debate began, Dayton told reporters he plans to quickly veto the bill so that another version can be negotiated.

"I hope they'll agree to include my emergency school aid as part of that tax bill, and then we can negotiate the rest of it. They can pass something, and I'll sign it. But it depends on their willingness to compromise and meet me midway."

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Dayton wants $138 million for school districts that are struggling financially. He suggested some of the money could come from the tax breaks Republicans want for businesses.

"It's just absurd that they want to protect these multinational companies who've earned their profits overseas from paying their appropriate Minnesota taxes when they repatriate them.

During the Senate debate, Minority Leader Tom Bakk, DFL-Cook, accused Republicans of dismissing the governor's concerns as they crafted the bill.

"We can't get a bill into law without a governor's signature. And you don't get to be just dismissive of the governor's position. He's a coequal branch of government with us. We can't get things signed without him."

The Senate tax chair disagreed. Republican Roger Chamberlain of Lino Lakes said he tried unsuccessfully to negotiate elements of the bill with Dayton's revenue commissioner.

"They had their heels dug in a long time ago. I'm not quite sure that they even want a tax bill. They didn't want to discuss even small issues."

Republican Senate Majority Leader Paul Gazelka said he's ready to negotiate with the governor on an end-of-session agreement. But he wants to focus on shared priorities, including opioids, school security and elder abuse. Gazelka said the request for emergency school funding makes a deal "extremely difficult."

Republican House Speaker Kurt Daudt also raised concerns about the governor's funding demand. Daudt said it came too late in the session.

"Is it totally off the table? I don't know. That's up to the members, and we're going to have those conversations. But right now, it literally doesn't fit into the budget that we have and the resources we have."

Dayton dismissed Daudt's complaint about the timing of his request. He said Republicans are adding things "left and right" during the final days of the session.

"It's just ridiculous," Dayton said. "If [Daudt] wants to do it, we'll do it. If he doesn't want to do it, we won't. It's as simple as that."