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Published May 24, 2011, 12:19 AM

MN Lawmakers Head to OT With No Budget Deal

The Minnesota Legislature adjourned its regular session late Monday with no sense of finality and no budget deal with Gov. Mark Dayton, forcing lawmakers to leave town and await the governor's call to return for a special session to solve a $5 billion deficit.

By: Martiga Lohn, Associated Press

ST. PAUL, Minn. (AP) — The Minnesota Legislature adjourned its regular session late Monday with no sense of finality and no budget deal with Gov. Mark Dayton, forcing lawmakers to leave town and await the governor's call to return for a special session to solve a $5 billion deficit.

Failure to pass a budget by the end of June would force a state government shutdown at the start of the July Fourth holiday weekend. Without a new budget, appropriations for most of what the state does would stop July 1 — including the operation of state parks and highway rest stops.

A stubborn dispute over taxes and spending kept the session in a holding pattern in recent weeks. Dayton gave no immediate indication of when he would call a special session, and has said it likely wouldn't be until after he and GOP lawmakers reach a budget deal.

The House and Senate adjourned in Monday's final minutes, to reach their constitutional deadline at midnight. But all sense of urgency was drained from the session's final hours, which lawmakers spent debating issues including civil lawsuits and the distribution of dedicated funds to outdoors and cultural programs. Dayton and GOP leaders had not met to talk about the budget since Sunday afternoon.

Dayton, a Democrat, dampened the mood earlier in the day by saying he doesn't intend to begin vetoing the Republicans' budget bills before Tuesday. Legislative leaders held out hope he would sign the bills or veto them quickly so they could send him do-over versions.

"This is a shared failure on all our parts, the Legislature's and mine, that we can't reach resolution," Dayton told Capitol reporters. The basic dynamic is unchanged since the early January start of session: Dayton wants new, high-end income taxes as part of the deficit fix, while Republicans insist the state has enough money.

Republican lawmakers gathered outside Dayton's office three hours before midnight to demand one last time that he sign their budget bills. At the same time, hundreds of state employee union members rallied in the nearby rotunda, chanting "tax the rich" and "we want to work."

Outside Dayton's office, Senate Majority Leader Amy Koch acknowledged the likelihood of a special session when she forecast what would happen if the deadline passed without a deal.

"We will continue the conversation with the governor," said Koch, R-Buffalo.

The only piece of the state budget enacted so far is a slender $76 million package for farm programs, which Dayton signed last month.

Dayton said he hadn't considered whether he would call lawmakers back to St. Paul before or after a shutdown started, if there's no budget agreement beforehand.

Dayton insists he moved toward Republicans a week ago when he reduced his proposal for new taxes by about half to $1.8 billion, raised mainly from a new tax bracket for the top 2 percent of incomes. GOP lawmakers said they already compromised within their ranks by agreeing to spend $34 billion, the amount the state is projected to collect in the next two years, even though some wanted a smaller number.

"I would have preferred to spend a little bit less, yes," said Rep. Doug Wardlow, a first-term Republican from Eagan. "We have moved in the direction of the governor significantly — substantially."

The governor continued a series of private meetings with legislative sponsors of the spending bills and the tax bill.

House Taxes Committee Chairman Greg Davids said his meeting Monday was "substantive" but didn't lead to any breakthroughs on the larger disagreement. He said Dayton's tax plan doesn't have the votes to pass the Legislature.

"He can't get the 68 votes. I know he can count to 68, but he can't get there," said Davids, R-Preston, referring to the number of votes to pass a bill in the House.

Dayton said he is open to alternative ways to bring new revenue into the state budget.

"But nothing that's been proposed here in the last five months has come even close to raising that kind of money," he said, referring to the $1.5 billion his proposed 10.95 percent income tax bracket would bring in over two years.

A minor flap over religion developed when Democratic Senate Minority Leader Tom Bakk used the word "cult" in describing the new Republican majorities. It demonstrated the frustration and tempers that often arise in the final hours of a legislative session.

"Their principles are so burned into their soul that it's almost like a religion, like a cult," Bakk, DFL-Cook, told reporters. "You can't compromise on that. And I think that's problematic for the Legislature going forward."

Two Republican senators responded in a hastily arranged news conference, where Sen. Dave Thompson called the comment "bizarre" and "unhelpful."

"I am not ashamed of the fact that I want to maintain fiscal discipline for the citizens of the state of Minnesota," said Thompson, a first-term Republican from Lakeville.

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Associated Press reporter Patrick Condon contributed to this report.

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