Governor, Legislature exchange offers as budget talks resume

(Updated 6:33 p.m.)

Budget talks between Gov. Mark Dayton and legislative leaders resumed Tuesday with the governor offering additional tax cuts and proposing a fee increase to fund transportation projects, while Republicans lowered their position on tax cuts and offered to increase education spending.

But while both sides praised the other for making significant movement, they said significant differences remain.

Emerging from an early afternoon meeting with the governor, House Speaker Kurt Daudt (R-Crown) called Dayton’s idea to fund transportation projects by raising license tab fees “disappointing,” and Senate Majority Leader Paul Gazelka (R-Nisswa) said it was “unacceptable.”

“We feel it’s good that we’re now talking about global targets on the entire budget,” Daudt said. “We know that’s important because when you pull one lever the other levers move, so we need to be negotiating in the context of a balanced budget.”

Dayton’s offer includes a $400 million tax cut during the upcoming biennium. It also projects a revenue increase of $321 million from higher license tab fees.

The governor’s office said in a statement the offer represents a “movement of $832 million from his original budget proposal, including $624 million in decreased spending, and $208 million in additional tax cuts.”

WATCH House and Senate Republican leadership discuss budget offers

After taking a few hours to consider Dayton’s offer, the Republicans made a counteroffer during a late afternoon negotiating session. Their proposal would lower the tax cuts they had been seeking from $1.1 billion to $875 million and raise additional K-12 education spending by more than $100 million to a total of $408 million.

Speaking after that meeting, Dayton said he wouldn’t question the Republicans’ numbers or priorities but added that, with a $1.5 billion surplus remaining, their tax relief and transportation proposals would consume 83 percent of that amount.

WATCH Governor, DFL leaders discuss budget negotiations

“That’s where the most significant differences are,” Dayton said.

Administration officials will now review the Republican offer and Dayton said talks could resume Tuesday night or Wednesday morning.

Agriculture bill

Tuesday’s negotiations also produced agreement on a budget target number that should pave the way for a final version of the omnibus agriculture bill.

Although they didn’t share the final budget number, the sides have agreed to let the conference committee chairs on HF895/SF780* – Rep. Rod Hamilton (R-Mountain Lake) and Sen. Torrey Westrom (R-Elbow Lake) – negotiate the details of the bill with Agriculture Commissioner Dave Frederickson.

It would appropriate more than $100 million during the upcoming biennium to fund the Department of Agriculture, Board of Animal Health and Agricultural Utilization Research Institute.