ST. PAUL  — Gov. Mark Dayton and legislative leaders on Thursday made it clear: Little has changed in the partisan disagreements that kept marquee deals on tax cuts and transportation funding out of reach last year.

Just more than a week from the Legislature’s return to handle a hefty budget surplus and wrap up unfinished work, the Democratic governor and top lawmakers from both parties met near the Capitol to discuss their priorities for the shortened session. Lawmakers will have just 10 weeks to work, due to ongoing renovations.

Here’s a look at what’s on tap for the next few months.

 

How large a surplus?

A final look at the size of the surplus will set the stage for the Legislature’s March 8 return. Budget officials were set to announce today whether the state’s projected $1.2 billion surplus has grown or shrunk.

In a rare consensus, Dayton and the four caucus leaders said they expected a modest increase. But the governor and Democratic Senate Majority Leader Tom Bakk warned about a slowing economy that could mean trouble in the next four or five years.

Dayton said he’d release his own, comprehensive budget proposal for the year in mid-March.

 

Transportation

The political leaders all labeled how to fund road and bridge repairs a top priority, but they picked up right where they left off in last year’s debate on the topic: in the midst of a massive divide.

Republicans passed a bill last session that shifts taxes on car parts and rentals to a dedicated transportation fund, but couldn’t come to an agreement with Democrats who called for a 16-cent-per-gallon gas tax increase.

Dayton argued Minnesota residents should be willing to pay an extra fee with gas prices under $2 a gallon, and said Thursday that the GOP plan wasn’t sufficient to fund an estimated $6 billion in repairs over the next decade. Daudt and Senate Minority Leader David Hann countered the state’s overflowing coffers makes an increase unthinkable.

“I’m pessimistic we’ll get a transportation bill that’s meaningful. I think we’ll get one that’s cosmetic,” Dayton said.

In another area of dispute, Dayton and Daudt clashed over whether the state should fund a light-rail train expansion into the southwestern suburbs.

 

Tax cuts

There are plenty of tax options on the table: repeal taxes on Social Security income, offer tax credits for child care or reduce property taxes.

Dayton and Republicans agreed on expanding tax credits to more parents paying for day care. But while Daudt pegged tax reductions a top priority, Bakk and Democrats said his proposal to eliminate Social Security income collections could put the state in financial peril.

It’s a continuation of last year’s tax debate, which stalled in the Legislature’s split power. The governor said he’d outline other possible tax proposals next month.

 

Education

Dayton said boosting education tops his wish list for 2016.

It will follow a $525 million infusion made in last year’s budget, but the governor said Thursday the state should do more to improve early education programs. No matter the size of the surplus, his proposals will be in fierce competition with the House GOP’s top prize: a major tax cut.

 

Prisons

The 10-week session may get bogged down in the tough political talk of prisons. The state’s facilities are stretched to capacity, and the Legislature is weighing whether to use a shuttered private prison, build a new one or take measures to reduce Minnesota’s incarcerated population.

Daudt said Republicans may prefer to reopen a privately run prison in Appleton, while Dayton said expanding existing facilities is the better option. No matter the tactic, it’s tricky in an election year, Bakk said.

“It is really tough politics because it writes really tough literature on the campaign trail,” he said.

Daudt said the House will likely try to reverse a state commission’s decision that would lower drug sentencing guidelines for some drug offenders.

 

Steelworkers and driver’s licenses

The special session that never was may pop up right when lawmakers return to St. Paul.

Democrats and Republicans agreed Thursday they’ll try to vote in the Legislature’s first week to extend unemployment benefits for laid-off steelworkers on the Iron Range. They’re also aiming to set in motion upgrades to the state’s driver’s licenses so Minnesota residents aren’t turned away from domestic flights.