Dayton, lawmakers seek way out of special session impasse

ST. PAUL, Minn. (AP) -- Republican Legislative leaders and Democratic Gov. Mark Dayton searched Wednesday for a way out of their impasse after their plan for a brief special session went off the rails with plenty of work remaining to wrap up a $46 billion budget -- and no clear path to do so.

The two sides had agreed in principle late Monday to hold the special session with a self-imposed deadline of 7 a.m. Wednesday. But they blew through even that extended deadline and by Wednesday afternoon, the Legislature still hadn't sent any of the five outstanding budget bills to Dayton.  

It remained unclear whether it would be hours, days or even weeks until the Legislature wraps up its budget work. Dayton and top Republicans met sporadically Wednesday to figure out how to end the overtime session but said little about their plans. While the governor has the sole authority to call a special session, it's up to the lawmakers to decide when to adjourn.

There were shadows of a special session in 2005, when then-Gov. Tim Pawlenty immediately called lawmakers back for a special session that stretched on for nearly two months. The Legislature has until July to finish a budget or risk a government shutdown.

Asked whether lawmakers would work through the night to wrap up the budget or would have to return later, Senate Majority Leader Paul Gazelka responded with a simple: "I don't know yet."

Some of Dayton's Democratic allies capitalized on the lull with a rally calling on the governor to veto everything from the special session. Protesters from labor and other progressive groups filled the rotunda of the Capitol to oppose an education funding bill they considered too stingy for public schools and call for a $15-per-hour minimum wage. One popular sign read, "(hash)vetoeverything."

Dayton and Republican legislative leaders struck the special session agreement shortly before midnight Monday -- the mandated end of the regular session -- on how to use a $1.65 billion surplus. They agreed to put $650 million toward tax relief, $50 million to expand preschool offerings and $300 million to fix roads and bridges in a special session.

Democrats said majority Republicans only had themselves to blame for the messy special session

"Republicans have now failed to pass a final budget in both the regular legislative session and in the self-imposed 12:01 am special session," House Minority Leader Melissa Hortman said in a statement.

The Legislature sent Dayton five budget bills before the regular session came to a close Monday, but details of the massive, outstanding spending packages that eat up 85 percent of the state's overall budget weren't released until late Tuesday, and major questions remained Wednesday.

The bills would devote three-quarters of the state's budget surplus to boosting spending for public schools and tax cuts. An education budget pays to increase the state's per-pupil funding formula by 2 percent in each of the next two years, while also setting aside $50 million to expand preschool options -- a top priority for Dayton.

"I think it really represents true compromise. We're getting some things we wanted, the governor is getting some things he wanted," Daudt said. "We're pretty happy with that."

Plans for a $660 million bill of tax breaks shrunk by $10 million in last-minute negotiations. But new tax cuts would be created for college savings plans and tuition debt, Social Security income and first-time homebuyer accounts. The planned Major League Soccer stadium in St. Paul would get a long-awaited exemption from state and local property taxes. In another move, the bill would also slash taxes on premium cigars -- from $3.50 to 50 cents each -- and remove inflation-adjusted increases for cigarette taxes that were approved in 2013.

The Senate approved that bill Wednesday afternoon, adding an amendment that would allow bars to stay open until 4 a.m. when Minneapolis hosts the Super Bowl next year. The House will have to pass the bill again.

Special sessions have become routine at the Legislature. Lawmakers needed a one-day overtime session while setting its last budget in 2015 after Dayton vetoed several spending bills. In 2011, deep disagreements between Dayton and a GOP-controlled Legislature over how to solve a $6 billion shortfall triggered a 20-day government shutdown that ended only after a special session.