Dayton Rejects Two Biggest Bills Passed by GOP-Led Legislature

ST. PAUL, Minn. (AP) — Gov. Mark Dayton vetoed massive tax and budget bills on Wednesday that Minnesota lawmakers passed in the waning days of the session, setting off a cascade of consequences that he blamed on Republican majorities for not negotiating in earnest.

Dayton had indicated he would hobble the bills as late as Sunday night as lawmakers scrambled to finish their work before a midnight deadline. Republicans who control the Legislature immediately pivoted Monday to ramp up pressure on the governor to sign both.

The Democratic governor’s veto of the tax bill means all Minnesota taxpayers will face a more complex tax filing season next year, and some families and businesses may be taxed more heavily. Striking down the budget bill prevents funding going out for schools to make security improvements, money to help public schools fill budget deficits, reimbursement for local offices who have struggled with the state’s new driver registration system, opioid abuse prevention efforts and more.

But Dayton said the Republican tax bill was skewed too heavily toward corporations and wealthier residents, noting a modest income tax rate cut would net larger benefits for the state’s highest earners. And he said a mammoth, 1,000-page budget bill was riddled with objectionable policy that he would otherwise never sign and that the emergency funding for nearly 60 schools facing budget shortfalls did not go far enough to win his signature

He called the bills the result of political gamesmanship and not sound policymaking.

“They wanted their talking points, they wanted re-election, election campaign slogans. And that’s exactly what they’re already doing,” Dayton said. “Reaching an agreement with me was not part of their game plan.”

Republicans were expected to respond to Dayton’s vetoes later Wednesday.

Dayton isn’t seeking a third term. Members of the House, currently controlled by Republicans 77-56, are up for election in November. Senators are not on the ballot.

Just as they began the session in February, the two sides remained deadlocked when the Legislature adjourned on Sunday night — and all signs pointed toward a bumpy and inconclusive finish with Dayton’s veto threat looming.

Dayton accused Republicans of loading up a massive budget bill to try to force his signature, including funding for opioid abuse prevention and revamping oversight of senior care facilities. Republicans argued they removed more than half of the provisions Dayton had demanded be pulled out and stressed they provided $225 million to 59 Minnesota schools suffering budget shortfalls — though less than a quarter of that funding was new money.

“That’s why they did this,” Dayton responded Wednesday after announcing his vetoes. “If they wanted to get that done … they would have put it in a separate bill.”

And one of the marquee issues of the session remains unfinished. The Legislature needed to tweak its tax code to account for the big federal overhaul passed late last year.

Department of Revenue Commissioner Cynthia Bauerly, the state’s top tax official, said work is already underway to make sure Minnesotans can still easily file their taxes even without a so-called conformity bill. She said no vendors such as TurboTax have indicated they would leave Minnesota or raise their prices, but that residents who itemize their taxes may need to answer more questions or provide more receipts.

Republicans immediately pivoted to pressuring Dayton to sign both bills. They started an aggressive lobbying campaign, bringing a parade of Minnesotans to the steps of the Capitol Monday — business owners with higher taxes on the line, deputy registrars who would get reimbursed for the extra costs of the troubled driver registration system and a man whose late mother was abused at a senior care center.

Dayton downplayed the consequences of the legislative impasse and his vetoes, and reiterated that he would not call lawmakers back to try again in a special session. He suggested lawmakers could make corrections to the tax code when a new Legislature — and governor — returns in January.

“I’m not saying that’s a good way to approach this, but the sky is not falling,” he said. “It could and should have been avoided,” Dayton said.