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Budget Talks Under Way

Gov. Mark Dayton and Republican legislative leaders are in budget talks after Dayton offered to accept a Republican revenue plan to end Minnesota's two-week-old government shutdown.

The two sides went into Dayton's office at 2 p.m. on Thursday. It was their first session since last week.

Dayton attached significant conditions to his offer. He said Republicans must drop a list of policy changes and a plan to reduce the state workforce by 15 percent. In exchange, he would sign off on a Republican proposal that would raise $1.4 billion, half by delaying state aid checks to school districts and the other half by selling tobacco payment bonds.

"I believe this is the best option for Minnesota," a weary-sounding Dayton said after announcing his offer in a speech at the University of Minnesota. "I know in my soul that I am doing what I believe."

Rep. Steve Gottwalt, R-St. Cloud, called Dayton’s offer a “very hopeful” sign.

Before agreeing to support the offer, Gottwalt said he needs more specifics on the governor’s condition requiring Republicans to drop their call for policy provisions.

Gottwalt acknowledged the budget proposal relies on one-time funds, which contrasts with Republicans’ calls to put the state budget on sustainable footing. But Gottwalt said the shutdown has to end soon.

“If this is a reasonable compromise to get us there, I‘m willing to concede that for now,” Gottwalt said of the one-time funds.

At least one area legislator opposes the Dayton proposal.

Rep. Larry Hosch said today that he can’t envision himself supporting the measure if it comes to a vote.

Since the proposal relies on one-time funds, Hosch, DFL-St. Joseph, said it won’t eliminate the state’s structural deficit.

“The fact of the matter is, this budget is only going to perpetuate deficits,” Hosch said.
Hosch added that he particularly opposes the tobacco-bond portion of the proposal, in which the state would issue bonds and repay them with future tobacco revenues.

Hosch said he’s not sure how many other DFLers will support Dayton’s proposal. But he said if any do, “you’d be able to count them on one hand.”

Rep. Mary Kiffmeyer, R-Big Lake, wouldn’t commit to opposing or supporting Dayton’s offer.

Kiffmeyer called the tobacco bonding proposal “palatable,” but sounded reluctant to expand the funding shift for school districts.

“Putting that onto the school districts is not very satisfactory, and I don’t know that that’s really necessary,” Kiffmeyer said.

If the Republicans agree to Dayton's proposal and the pieces fall into place, the first-term governor said he is prepared to call a special session within three days.

The Minnesota impasse was months in the making, with Dayton insisting on raising income taxes on the highest earners to soften the effect of budget cuts necessary to resolve a $5 billion deficit. More recently, Dayton had offered to consider an array of other ways to raise revenue, including cigarette and alcohol taxes and a broader sales tax.

As the shutdown persisted, the pressure for a resolution has intensified.

The partisan standoff has closed state parks and rest stops, prevented many people from getting licenses they need to launch careers or move ahead with businesses, and cut off funding streams to countless social service programs. It has also cost the state millions in preparation costs and lost revenue.

Dayton has been on the road this week, holding public events around the state, and said he received a clear message from the people he met: End the shutdown.

"They want this resolved and they don't even care how. I care how," Dayton told a University of Minnesota audience in Minneapolis.

Dayton said he is reluctant to accept the Republicans' way out of the budget impasse.

"Despite my serious reservations about your plan, I have concluded that continuing the state government shutdown would be even more destructive for too many Minnesotans," he said in a letter to GOP leaders that he read aloud. "Therefore, I am willing to agree to something I do not agree with -- your proposal in order to spare our citizens and our state from further damage."

Dayton is also asking lawmakers to approve a construction projects bill totaling at least $500 million.




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