Signs of the end are everywhere in St. Paul.
DFL Gov. Mark Dayton and Republican leaders of the Legislature spent the week fielding questions about their close-of-session priorities, and lawmakers shuttled between news conferences and marathon floor sessions in both chambers. The two sides are ostensibly trying to hash out a global agreement to end Session 2012, and there are a lot of moving parts to consider.
The major components that have emerged so far involve a handful of priorities for the governor — mainly, the passage of a large package of capital investment projects — and what House Speaker Kurt Zellers has referred to as a “lovely buffet” of GOP-crafted tax cuts whose centerpiece is a decade-long phase-out of statewide business property taxes.
But Capitol hands of all stripes are struck by the strange tenor of end-of-session bargaining this year, and not only in comparison to the historic rancor of the 2011 session. “It’s the most bizarre end of session I’ve ever seen,” veteran Republican lobbyist Todd Hill said last week.
The session has seemed aimless from the beginning, according to some Capitol lobbyists.
“There’s been a lot of, ‘Let’s throw this at the wall and see if it sticks’ going on here this year,” one DFL lobbyist said, adding that a series of distractions, including a looming lawsuit from former staffer Michael Brodkorb over his firing and the scandal surrounding his relationship with former Senate Majority Leader Amy Koch, have kept the attention of the media and a handful of entangled lawmakers elsewhere. And the doomsday rhetoric surrounding a new home for the Minnesota Vikings — which Dayton isolated as a stand-alone issue last week, suggesting he won’t court a deal for it that’s tied to bonding or taxes — continues to suck air out of the Capitol building.
The session is also missing a budget deficit, or even a surplus, to anchor negotiations. “People are motivated by crisis,” longtime DFLer and lobbyist Paul Cassidy said. “This is the first year in a long time that there’s no budget deficit. It has almost always been the central bargaining chip.”
Possible bargaining chips
Coming out of private talks last week, GOP leaders and the governor were quick to offer up taxes and bonding as the two key areas in which there could be some fruitful trading.
On the tax side, Republicans have suggested a slew of changes to the system, including property tax relief for businesses, a sales tax exemption on capital equipment purchases by businesses, temporary elimination of the “marriage penalty” for couples and a tax credit to promote investment in startup companies. Senate Taxes Chairwoman Julianne Ortman said talks with the governor focused on investment tax credits and exemptions for research and development, but she added that she also thinks they can reach an agreement to repeal the marriage penalty and lower business property taxes.
But Dayton has taken issue with Republicans’ source of funding for some of their proposed cuts: draining the state’s newly replenished budget reserve fund. Dayton quickly shot down any talk of dipping into the account. The governor did, however, suggest that he would be willing to give the Republican majorities their key tax initiative — business property tax reduction — if they increased the overall size of their bonding package.
Dayton has proposed a $775 million bonding bill for state construction projects. In the Legislature, Senate Republicans are pushing a $494 million bonding bill, while House Republicans have recommended a $280 million package for general construction projects. In addition to insisting on a larger overall package, the governor is likely to seek specific projects in a final bonding bill, including a downtown St. Paul ballpark, the Southwest Corridor light rail line, civic centers and more projects in the Twin Cities area.
Republicans are also holding out hope that the governor will accept (and possibly work into some kind of a global agreement) their key education initiative, a repeal of the state’s so-called “last in, first out” (LIFO) law that protects teachers with the most seniority when schools have layoffs. Dayton has signaled his intention to veto the bill, but Republicans have purposefully refrained from holding a final vote on the conference committee report, which would send the bill to the governor’s office.
“I’m in the minority,” said GOP House Education Finance Chairman Pat Garofalo. “I actually think the governor is going to sign it.” National and local groups have been working to pressure Dayton, and a handful of current and former governors (including Florida Republican Jeb Bush and New York Democrat Andrew Cuomo) have called Dayton’s office to encourage him to sign the bill.
“We are going to give him every opportunity to hear from the thousands of advocates for the bill,” said GOP Rep. Branden Petersen, the proposal’s chief author. “We want him to hear from everyone, and maybe he will have a change of heart. I’m not sure there’s anyone advocating for him to veto it but the teachers union.”
Other complicating factors
Capitol lobbyists warn that lawmakers, in an effort to drive a hard bargain with Dayton, could wind up with nothing this session. The main reason: Dayton doesn’t need to pass anything this session. While all 201 legislative seats are on the ballot this fall, Dayton is not.
“The governor doesn’t need anything, and I think people are starting to realize that,” said House HHS Finance Chairman Jim Abeler. Abeler also notes another pressing obstacle this year: Even if some kind of global agreement is reached, the leaders of the four legislative caucuses — which have been marked by a growing contingent of independent operators — may not be able to round up the votes to consummate any deal they reach.
“I don’t even know if we can deliver on some of our promises,” Abeler said. “There’s an independent streak in this caucus.”
House Republicans’ $220 million Capitol restoration bonding fell a single vote short of passage on the floor on Thursday, three days after the Vikings stadium bill went down in the House Government Operations and Elections Committee. Only one DFLer on the committee voted for the stadium bill.
“The question from House Republicans has been, if Democrats can only put up one vote for a stadium bill in committee, how are they going to put up votes for a bonding bill on the floor?” said lobbyist John Knapp. “When you need 81 votes, you are going to [need] a significant number of DFLers to vote for it, because there are going to be House Republicans who will not vote for a bonding bill, no matter what.”
So does that mean Session 2012 could end without any deal at all? Dayton seems to think so.
“I said, ‘If this is where you are and this is as far as you’re willing to go, unlike last year when we had to wrangle it out, this time we don’t. So let’s just agree respectfully to disagree and let them conclude,’” he said at a Wednesday news conference. “There’s really nothing that has to be done during this session.”