Possible LGA increase, tax relief at stake in bill

Local leaders said Tuesday they are disappointed with the failure to pass a tax bill after Gov. Mark Dayton did not sign the bill Monday night that included a number of provisions for Greater Minnesota.

Fresh from the governor’s decision not to sign the tax bill before Monday’s midnight deadline — letting it die — the Democratic governor and lawmakers met briefly Tuesday to determine whether compromise was possible. But they’ll still have to soothe over the size and scope of a public works package — an integral part of a possible overtime session — that led to its failure in the legislative session’s final moments.

Despite Dayton’s pocket veto of the tax relief package for college graduates, farmers and parents with childcare costs, the two sides are largely on the same page over how to fix it and  remove the prospect of losing $100 million — money meant to pay the state’s share of the Minnesota Vikings’ new stadium. Republicans have also agreed to restore a tax exemption for the state’s high school league.

But Dayton also tied his final approval of the tax bill to the Legislature sending him a $1 billion-plus public works package, putting a premium on projects on the University of Minnesota campus and improvements at the state’s security hospital.

“We need a special session,” he told reporters earlier Tuesday. “I’m willing to compromise. I’m willing to meet them halfway.”

District 27A Rep. Peggy Bennett said though funding all of those programs would be nice, there is not an endless amount of money, noting she thinks Dayton must compromise as the Senate and the House have.

She said she wants a special session to convene if a compromise can be reached.

Albert Lea City Manager Chad Adams said a local government aid increase is no longer going to happen, unless the Legislature reconvenes in a special session. He said though the increase does not return LGA funding to 2002 levels, he still sees it as a nice increase.

He said the tax levy will be affected if an LGA funding increase is not approved, noting the additional LGA funding the city was projected to receive in 2017 as part of the tax bill is equivalent to about 2 percent of the city’s tax levy.

“We are still early in the budget process, but I think it’s fair to say our tax levy will be about 2 percent more than what our proposed levy will be here in September,” Adams said.

Adams said details need to be worked out in the bill, such as a proposed cut in supplemental spending on economic development programs that he said could severely compromise an economic development project planned for Albert Lea.

More information on the project was not available as of press time.

He said legislators have not had enough time to review and understand the full impacts cuts would have on Greater Minnesota and state agencies, noting he and other city leaders support a special session so the tax bill and a bonding bill can be passed.

District 27 Sen. Dan Sparks, DFL-Austin, said though there are many good items in the tax bill, he understands Dayton has a lot of say in the process.

He said he understands Dayton’s concern over losing money meant to pay for the state’s share of the Vikings’ stadium, noting he will have to see whether there will be a willingness to compromise so a tax bill and a bonding bill can be passed.

Sparks said as of Tuesday, Dayton had moved halfway between his bonding proposal to the Senate’s $1 billion proposal.

Bennett said by vetoing the tax bill, provisions such as an increase in local government aid, deductions for higher education tuition expenses and other deductions, tax relief for Minnesota farmers, college students paying off student loans through a refundable tax credit, families, small businesses, veterans and child care were left on the table.

Sparks said he wants to see a tax bill and local bonding requests pass due to what he deems as their importance to the area, noting he thinks failing to reach an agreement would result in infrastructure funding falling behind statewide.

Dayton’s Deputy Chief of Staff Linden Zakula said in a memo that the governor supports a substantial bonding bill, noting by not passing a bonding bill the Legislature did not invest in higher education buildings, water treatment plants and public safety facilities while creating jobs across Minnesota.

Coalition of Greater Minnesota Cities President Robert Broeder said in a press release he is disappointed that Dayton and legislative leaders could not work together to solve the tax bill’s issues, noting the increase in local government aid and tax relief for farmers, businesses and students passed the House and Senate with large bipartisan support.

“It is a shame to see another bill fall victim to the partisan bickering that has plagued this entire session,” Broeder said.

He said though Dayton and legislators do not agree on bonding and transportation, they should still have a special session to fix a typing error in what he called an otherwise strong bill.

“If our state leaders can’t even agree to do that, they better expect to get an earful from Minnesotans this summer,” he said. “As Governor Dayton and legislators make their rounds at parades and local events, I hope every Minnesotan will speak up to let them know that their inaction is totally unacceptable. We deserve far better from our elected officials.”

 

— The Associated Press contributed to this report