Gov. Mark Dayton quickly vetoed Friday a Republican-backed tax bill that cleared the Legislature Thursday night, saying the measure irresponsibly added to the deficit in future years and lacked sufficient tax relief for individuals and homeowners.
“This bill would not pay for the business property tax levy freeze and other tax breaks,” Dayton wrote in his veto letter. “It has been my consistent position throughout this session that any new spending increases to tax reductions had to maintain the current Budget Reserve and avoid increasing future deficits.”
Dayton also looked to contrast his desire for broader tax relief with what was included in the GOP’s bill. Specifically, Dayton wrote in his veto letter, the bill provides $45.4 million in tax breaks for businesses, $4.1 million to homeowners and “virtually none to renters, seniors, and farmers.”
“This imbalance is unfair,” Dayton wrote.
The quick veto, coming the morning after the bill was presented to the governor following its final approval on the Senate floor, is sure to add to the sense of acrimony at the Capitol. In recent days, Republicans leaders have cited Dayton’s multiple vetoes and rejection of their key priorities as reason they didn’t feel compelled to help push through a Vikings stadium bill this session.
Indeed, Dayton said the mechanics of negotiations with Republican leaders — which he described as progressing until leaders moved to a floor vote on the tax bill in the House Tuesday morning after he made a counteroffer that wasn’t responded to — as symptomatic of disagreements and difficulties both sides have had since 2010’s election.
“We’ve had profound disagreements from the day we all arrived in January a year ago,” Dayton said. “That’s been the problem with this dynamic…their version of compromise is when we do it their way.”
In responding to the veto later Friday, Senate Taxes Chair Julianne Ortman said Dayton “may have burned the last bridge to working cooperatively” this session with his veto of the tax bill.
“I would say it’s irresponsible what he did today,” she said. “I think there will be consequences.”
“The veto and the message was really disrespectful,” House Speaker Kurt Zellers added.
The veto potentially imperils the Vikings stadium vote, now scheduled for Monday in both the House and Senate. Republicans in both chambers have made thinly veiled comments in recent days signaling that a Dayton signature on the tax bill could help lead to more GOP green votes for the stadium.
Ortman sounded a similar note on Friday as well. “Why should we help him with his priority?” she asked, referring to the stadium. “Our priority should come first.”
But Dayton has rejected such quid-quo-pro negotiations, and in announcing his veto Friday, said removing the tax bill from the Vikings stadium debate was one reason he wanted to act quickly on the bill. Dayton has typically taken most of his provided three days to consider bills, even those he’s telegraphed are destined for a veto.
“The stadium is not about me,” Dayton said. “I hope that legislators will separate the issues.”
But even while seeking to remove the bill from the broader debate at the Capitol, Dayton left open the question of whether he and lawmakers could come together and form a compromise tax bill still yet this session. He and Republicans had mostly agreed on the fiscal details of the bill for the current biennium, Dayton added, but the disagreement came when considering the fiscal tails that would have increased the deficit.
There are also lesser-known and more local measures included in the bill that have some at the Capitol wondering whether both sides could agree to a more technical, non-controversial tax bill in the event the GOP’s omnibus measure was vetoed. On one key project at the Mall of America, Dayton said he’s interested in an alternative that wouldn’t require such a large burden for the host community.
Dayton did say Friday he’s willing to negotiate on a bill that might increase the deficit going forward — something he’s largely rejected out of hand until this point — but not by as much as the $145 million price tag included in the GOP bill.
House Tax Chair Greg Davids told reporters on Thursday that he and Ortman hoped to meet with Dayton before he acted on their bill. It’s unclear whether that meeting will take place now, although Dayton said he’s open to continuing talks.
Republicans sounded less open on Friday to a second attempt at a tax bill with Dayton in the waning days of session, but didn’t rule it out either.