Framework of budget deal reached at Capitol

by Tim Budig
ECM Capitol reporter
Democratic Gov. Mark Dayton and Republican legislative leaders on Thursday, July 14 emerged from a three-hour meeting at the State Capitol looking grim but announcing that a tentative state budget agreement had been reached.

“It’s my understanding that we have an agreement,”  Dayton said,  announcing that he was willing to accept a Republican budget offer previously rejected on June 30, the eve of the state government shutdown.

Dayton, House Speaker Kurt Zellers, R-Maple Grove, and Senate Majority Leader Amy Koch, R-Buffalo, emerged from the budget talk session with a budget deal in hand. Details of the agreement remain to be worked out, so state employees will not immediately be going back to work.
Zellers and Koch repeatedly referred to the agreement reached behind closed doors as a “framework.”

“We have a framework agreement — I think that’s the best way to look at it,”  Koch said.

All three leaders indicated that they were not happy with the compromise that had been crafted.

“No one is going to be happy with this, which is the essence of a real compromise,” Dayton said.

Koch agreed.

“This an agreement that is difficult for both sides,” she said.

As defined by a letter the governor sent to Republican leaders on the 14th day of the state government shutdown, Republicans and the governor agreed to use a $700 million K–12 school funding shift plus issue tobacco bonds — bonding paid for by future tobacco revenues — to lump together $1.4 billion in additional revenue.

Republicans for months have been insisting on “living within your means” and not spending more than $34 billion over the next two-year state government budget cycle. But if the framework agreement holds firm, future spending will now be around $35.4 billion.

Still, the agreement does not include the income tax increase on high-income Minnesotans that Dayton wanted.

But Dayton’s acceptance of the Republican offer carried conditions.

The governor wants Republicans to set aside unresolved policy issues and drop a proposed 15 percent reduction in the size of the state employee workforce.

Dayton also asked for a $500 million bonding bill, but the status of the demand remains fuzzy. The governor said he was “hoping” that a bonding bill could be worked out.

One item not included in the budget agreement was a lights-on bill.

Republican leaders have been calling on the governor to immediately call them back into session to pass temporary state funding.

But instead the budget bills will be put together over the next few days, with the governor calling a special session after his commissioners sign off on the legislation. It’s possible then a special session could take place on Sunday or Monday.

“I expect to be here all weekend,” Dayton said of working on the bills.

As for having enough votes in their respective caucuses to pass the budget bills, Zellers said the House Republican caucus would have the votes.

Koch was less direct in describing how her caucus would respond to the budget agreement.

The leaders explained that the Vikings stadium issue wasn’t discussed.

Indeed, Dayton said he needed to be brought up to speed on developments and that he hadn’t spoken to his point man on the stadium, former state Sen. Ted Mondale, in a couple of weeks.

Republicans, too, indicated the stadium had fallen into the background. “We haven’t looked at it for weeks — I would say even months,” Zellers said.

Other elements in the Republican offer accepted by Dayton today includes a $50 per pupil increase in K–12 funding to cover the cost of the school districts needing to borrow money.

Funding to the Minnesota Department of Human Rights and Minnesota Trade Office would also be restored.

Some 22,000 state employees were laid off as the result of the state budget impasse.

The meeting was the first time Dayton and legislative leaders have met in a week.

Dayton announced his acceptance of the Republican budget offer at a forum at the Humphrey Institute at the University of Minnesota on Thursday morning.

Speaking to reporters after the forum, Dayton said he felt that he hadn’t caved in by accepting the offer and was doing what he felt was the right thing to do.

(Editor’s note: To view part of the post-agreement press conference held outside the Governor’s Office, visit http://www.youtube.com/watch?v=3ksG5JIIEyM.)

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