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Has Dayton Caved?

Observers may be giving President Obama credit for being a savvy poker player. The next few hours will decide if Gov. Dayton is seen in the same light. Monica Davey of the New York Times writes: “Of his willingness to now accept terms that he rejected on June 30, the afternoon before the state had to agree to a budget for the new budget year or close its doors, Mr. Dayton said, ‘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.’ Under Mr. Dayton’s proposal, he would abandon his push to raise taxes on the highest-paid Minnesotans and would give up efforts to raise other taxes (such as those on cigarettes) in order to bridge a budget deficit. Instead, Mr. Dayton said, he would accept Republican proposals to, in essence, shift funds around to create $1.4 billion more in revenue — the amount that stood between Mr. Dayton and the Republicans. About half would come from delaying state payments to local school systems, and the other half from borrowing money against expected future state revenue from the tobacco industry. More contentious, though, may be terms Mr. Dayton now wants: the removal of nonbudget, policy matters (like embryonic stem cell research) from any deal; abandoning of plans to make an across-the-board cut of 15 percent of state workers; and support for a bonding bill of at least $500 million.”

Chris Williams of the AP says: “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 to pass a budget within three days. It's unclear whether their legislative caucuses, which include hard-liners on spending as well as moderates who are willing to consider ways to raise more revenue, will put up all the votes required to pass a budget with a higher price tag. Republicans have dug in for months on spending no more than the $34 billion the state is projected to collect already over the next two years. Democratic lawmakers have been cold to the tobacco proposal, which could add another complication to finishing a budget.”

At the Strib, Rachel Stassen-Berger reports: “At a morning speech in Minneapolis, Dayton said he was ‘disappointed we can't do better.’ During the speech and afterwards, the governor repeatedly said that Republicans could avoid the unpalatable tobacco bond revenue by offering up a more substantial form of revenue. Their leadership has not done so in the weeks of shutdown. Even if House Speaker Kurt Zellers and Senate Majority Leader Amy Koch agree to the plan, they may still face hurdles wrangling the votes within their own caucus. Borrowing from tobacco bonds will likely mean the final deal is larger than the original $34.2 billion GOP budget, which some Republican members will not agree to. Republican leaders plan to meet with Dayton at 2 p.m. Thursday to discuss the offer. For several hours after Dayton made the offer, both Zellers and Koch stayed silent. ... Sen. Michael Jungbauer, R-East Bethel, was one of the first Republicans to react to Dayton’s proposal. ‘When he [says drop] all the policy positions, if that means that we don’t get any structural change to government, I guess I’m not really excited about that,’ he said. ‘If we don’t have any structural change, we’re going to be in this position — we’ve been in this position the nine years I’ve been here’ in the Senate. ‘That would be a real non-starter for me, but I don’t want to see this shutdown,’ Jungbauer added. ‘If he’s saying drop all structural changes, I don’t like that.' " Well, the one structure that will continue would be accounting gimmicks and non-recurring revenue patches the ratings houses like so much.

MPR’s Catharine Richert and Elizabeth Dunbar report: “[U]nions representing state workers had supported Dayton's tax plan. Neither union immediately reacted to Dayton's latest offer, but other Dayton supporters said they were disappointed the governor had given up on the proposal. ‘I am afraid that the governor may have based this decision on listening to citizens who were very upset and afraid due to real or possible loss of services and layoffs,’ said Barbara Fritz, who attended Dayton's event this week in Rochester. ‘Many of us feel very strongly that Gov. Dayton needs to find a way to put more tax burden on those with more. ... Regrettably, I don't think the citizenry of Minnesota who support Gov. Dayton let him really hear and feel that support.' "

James Hohmann of Politico thinks Dayton might be playing a shrewder game: “Dayton’s move is risky, but it could be a master stroke. While Dayton looks like he’s caving in to the GOP, he’s also presenting himself as the one who wants to end the shutdown without raising taxes. Unveiling the offer in public puts the burden on Republicans, who will be in an awkward position if they reject the deal. Independent voters may blame Republicans for allowing the government to stay shut down so they can push a conservative social agenda. There are national implications: if congressional Republicans draw as a lesson from this imbroglio that the president might buckle on the debt ceiling debate if they stand as firm as the Minnesota GOP has for the last two weeks, the likelihood of default increases. Dayton sounded cognizant of the parallels during a Thursday morning appearance at the University of Minnesota ... ‘The House of Representatives actually does parallel Minnesota legislative bodies more closely [than the U.S. Senate] — a lot of new members, a lot of ideology, a real just disdain for government — which makes it curious that they want to spend their time in government,' he said. He used some of his harshest public rhetoric to date to blast Republicans, saying he learned a valuable lesson watching George W. Bush and congressional Republicans in the lead up to the 2003 invasion of Iraq. ‘Ignorance and arrogance is a very dangerous combination,’ Dayton said. He also offered a takeaway that’s potentially relevant for negotiations in Washington this week. ‘Don’t get too close to the precipice,’ he said. ‘Going to the brink, at least I’ve learned from this experience, is even more ill advised than I thought.’ ” But if you always knew you were “going to the brink,” I’d think you would have brought a rope, or a parachute?

The battle for perception (of victory) is already well under way. Conn Carroll at The Washington Examiner writes: “Dayton sent a letter Thursday to Republican state legislative leaders saying that he ‘reluctantly’ agrees to accept their budget proposal to end the government shutdown. Dayton, like President Obama, had been insisting that higher tax rates on the rich must be part of any budget deal. ... Republicans in Washington should be emboldened by Dayton’s capitulation. When any government shuts down, the natural first response is to blame the man at the top. For the U.S. government, that is Obama. Even before the debt limit crisis became the story in Washington, Obama had a terrible approval rating on the budget deficit.”

At the conservative Power Line blog, John Hinderaker writes: “As I read Governor Dayton’s letter to the Republican leadership in the legislature, the most notable fact is that Dayton has given up on imposing tax increases as a condition of ending his shutdown of state government. Why did Dayton agree to end his shutdown now? This is pure speculation, but my guess is that he is looking at poll data that are not supportive of his position. Will the result of Minnesota’s shutdown (assuming the Republicans agree to Dayton’s terms, or something very close to those terms) be a harbinger of what happens at the federal level? I hope so.”

The Rochester Post-Bulletin’s editorial board had a preview of Dayton’s decision. They write today: “[D]uring a meeting with the Post-Bulletin Editorial Board, we asked him if he’d officially given up his effort to raise income taxes on the wealthy. His answer was both pragmatic and revealing. ‘Republicans are adamant that they won’t support any tax increase, and they’re most adamant that they won’t support an income tax increase, and I can’t force the Legislature to do something,’ Dayton told us. ‘It’s a four-year term, and I still believe it’s right for most Minnesotans, and it’s fair for all Minnesotans. Just because I can’t achieve it this legislative session, doesn’t mean I don’t think it’s the best course of action. ... Politics is the art of the possible, and if it’s not possible — well, difficult takes a while, and impossible just takes a little longer.’ Did you catch that, Sen. Amy Koch? How about you, Rep. Kurt Zellers? Gov. Dayton has conceded that, for this biennium at least, he will no longer ask the Republican-controlled Legislature to raise taxes on the wealthy. If the GOP wanted a victory, they’ve got it. Minnesota’s millionaires, those job-creators who apparently had their bags packed and were ready to flee to North Dakota or Wisconsin, can sleep soundly tonight. After just 13 days of closed state parks, idled state workers and blind people begging judges to reinstate their state assistance, Dayton has capitulated on one of his top priorities and most strongly-held beliefs.”

Elsewhere, Frederick Melo of the PiPress covered last night’s Vikings stadium public meeting up in Arden Hills: “The ‘listening session’ was hosted by the county and organized by state Rep. Katie Knuth, DFL-New Brighton, who invited Aimee Gourley, a legal professor at Hamline University's Mediation Center, to lead the conversation. Stadium supporters said no other developer would touch the Twin Cities Army Ammunition Plant, a polluted federal Superfund site. They also said the suburbs have supported stadiums in the cities of St. Paul and Minneapolis for 30 years. And the projects, while inspiring controversy and opposition at the outset, have all been popular draws once built, they added. Knuth, however, said she had concerns about the proposed funding strategy for the stadium, which would rely on a half-cent countywide sales tax to raise Ramsey County's contribution of $350 million. The state would pay an additional $300 million and the Vikings would put in at least $407 million, with the funding sources for road improvement costs still up in the air. ‘I'm actually leaning toward voting against the bill because of the half-cent sales tax,’ Knuth said.” So if the no-new taxes obstacle is removed from the state budget impasse, the Legislature is free to get back to work voting for new taxes for a football stadium, right?




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