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Dayton vetoes tax bill over school funding, as promised

Minnesota Gov. Mark Dayton vetoes a tax bill on Thursday, May 17, 2018, as he said he would if legislators did not approve $138 million in school aid. Don Davis / Forum News Service1 / 3
Meeting with students at St. Paul's Bruce Vento Elementary School Thursday, May 17, 2018, Gov. Mark Dayton answers questions on topics ranging from how old he is to what he does as governor. He was at the school to veto a tax bill. Don Davis / Forum News Service2 / 3
Minnesota Gov. Mark Dayton shows second and third graders in a St. Paul school photos of his two dogs on Thursday, May 14, 2018. Dayton was there to veto a tax bill after legislators have not acted on his $138 million school aid proposal. Don Davis / Forum News Service3 / 3

ST. PAUL — The Minnesota Legislature has three days left to pass bills, and nearly all major legislation remains in limbo.

On Thursday, May 17, a Republican-written tax bill received a veto stamp, in front of a couple dozen school children, as Democratic Gov. Mark Dayton fulfilled a promise to reject the bill until lawmakers approve $138 million in school aid.

There was no sign how a public works funding bill that went down in the Senate Wednesday can be revived, but people in both parties said they thought it could come back.

No progress was apparent on some other high-priority items, including fighting opioid abuse, dealing with abuse reported in nursing homes and getting tough on sexual misconduct.

The governor and legislative leaders met for their first negotiating session Thursday afternoon. They have gathered over breakfast now and then during the last few months, but are getting an unusually late start on session-ending talks. A second meeting is planned Friday.

The Thursday afternoon meeting was behind closed doors, but it is a sure bet that the governor and leaders discussed Dayton's tax bill veto earlier in the day.

"I'm vetoing this bill for all of them," Dayton said Thursday morning, waving his hand toward Bruce Vento Elementary School students in east St. Paul.

Dayton has said for a couple of weeks that his highest priority is increasing school aid, which Republicans say rose $1 billion in the two-year budget lawmakers passed last year. Dayton said he wanted the additional school money this year because at least 59 schools face "emergency" funding problems. He proposes to divide the additional $138 million to all school districts.

The governor feels he has leverage because Republicans who control the Legislature want a tax-cut bill. Senate Majority Leader Paul Gazelka, R-Nisswa, and House Speaker Kurt Daudt, R-Crown, appear to be leaving the door ajar for some new school funding.

Before vetoing the bill, Dayton sat on the floor with the second and third graders, answering questions such as how old he is and what he does as governor. They also wondered if he knew any famous people, which they defined as media stars not politicians.

Dayton brought out his telephone to show the students pictures of his two dogs, which prompted several children to tell him about their pets.

While Dayton said the veto came because of lack of new school funding, he also criticized the legislation for giving too many tax cuts to businesses.

Daudt, however, said "it was a slight increase on businesses. ... What the governor did today was to veto a bill that would have put money in low and middle income pockets."

A major reason for the tax bill this year is to ensure that Minnesotans are not penalized by major federal law changes. However, Dayton would not say if he would sign a tax bill that just conforms to new federal law.

About the public works bill, financed by the state selling bonds, Dayton said it needs more money. The House and Senate considered differing bills that would spend $825 million of general tax funds to repay the bonds and about $1 billion in all funds.

Dayton also said he had not seen much from the biggest bill of the year: one that contains most state spending changes and many of the policy changes being considered.

“If we don’t get things done, it is their fault, not mine," Dayton said.

Road dedication advances

House Republicans approved 76-54 a proposed constitutional amendment to dedicate $300 million a year in auto parts taxes to road and bridge work.

The bill sits in a Senate committee and it is not clear if senators will back the concept. If the Senate does approve the legislation, voters would be asked to decide in the Nov. 6 election.

Bill sponsor Rep. Paul Torkelson, R-Hanska, said the amendment would direct 4.5 percent of the revenues to small cities, while the bulk of the money would go onto the existing transportation formula that distributes funds.

"Whether you drive or not, you depend on these systems," Torkelson said in trying to convince colleagues that a dependable source of transportation funds is needed. "It is absolutely critical to the state's economy."

Rep. Connie Bernardy, D-New Brighton, offered a proposal that would tell voters that money that would go to transportation under the bill would come from other state programs, such as education and health care.

"It is important to remember that this does not raise any new revenue," Bernardy said.

She called it a "truth in advertising" proposal. She withdrew the measure before it went to a vote.

Torkelson said other programs will not be hurt if the amendment passed. "This is still a very small fraction of our general fund."

Agency would find fraud

The Senate's two health and human services chairmen want to establish a new state agency to find fraud in Minnesota human services programs.

The proposal, contained in a massive budget and policy bill, comes after reports of child care fraud in which state subsidies may have landed in the hands of terrorists, payments went to fake personal care attendants, hundreds of millions dollars in fraudulent Medicaid was paid to ineligible people and more than 20,000 elder abuse complaints  went uninvestigated for months, Republican Sens. Jim Abeler of Anoka and Michelle Benson of Ham Lake said.

The proposal would order the Human Services and Health departments to draw up a proposal for the new agency, which would have investigative authority over both agencies.

Don Davis
Don Davis has been the Forum Communications Minnesota Capitol Bureau chief since 2001, covering state government and politics for two dozen newspapers in the state. Don also blogs at Capital Chatter on Areavoices.