- Associated Press - Wednesday, June 3, 2015

ST. PAUL, Minn. (AP) - With a partial shutdown of Minnesota’s government looming absent a budget deal, Gov. Mark Dayton issued an ultimatum Wednesday that he won’t call a special session to finish the work unless lawmakers repeal a recently adopted shift in responsibilities for the state auditor.

Questions over the amount of public school funding and environmental regulatory changes have commanded much of top officials’ attention as Dayton and House Republicans try to strike a deal on three unresolved pieces of the state’s budget before a partial government shutdown takes hold July 1.

But after outcry from the state auditor about a change giving counties more freedom to hire private auditors, Dayton said he’d wait to call lawmakers back to St. Paul until they agree to repeal what he said would “eviscerate” the office he once held himself.

“It just basically wipes out the principal function of a constitutional officer,” Dayton said. “If they believe that the state auditor shouldn’t do what the state auditor is elected to do, they really should take that to the voters of Minnesota.”

The conflict stems from a budget bill financing state government operations which Dayton signed into law. He said he stomached the change but demanded the Legislature go back and fix it, rather than pit thousands of state employees with the prospect of layoff notices with a fourth veto.

House Speaker Kurt Daudt said he hoped making a technical fix to the bill - clarifying that the auditors’ power wouldn’t disappear until August 2016 - would buy time to keep studying the issue next year and put the governor at ease. He still hoped to find an overall compromise in time to call a special session on Friday.

Other House Republicans have shown little interest in ceding ground.

“He signed the bill. If he felt that strongly about it, he probably shouldn’t have signed the state government finance bill,” said Rep. Sarah Anderson, R-Plymouth. “I find it interesting that this is what he is going to hold up a special session for.”

Anderson said allowing counties to hire private auditing firms would cut down on costs from contracts with the state and lead to more timely completion of the reports.

After ditching several other proposals to water down executive authority, Anderson said it would be difficult to round up enough Republican votes to backtrack on something that made the final cut. She put the onus on Dayton to suggest something he would give up in exchange for leaving the auditors’ authority intact.

Dayton stressed he’s holding out “for now” to preserve the auditors’ power to audit county governments. He doubted whether altering a constitutional officer’s responsibilities was legal, but said that’s a question for the state Supreme Court.

State Auditor Rebecca Otto, a fellow Democrat, said ceding that authority to counties would gut the position and delegate auditing powers to private firms that can’t match her office’s ability to sniff out taxpayer money abuse.

Otto isn’t shying away from a potential legal challenge if the measure stays put.

Asked Wednesday whether she was prepared to bring a lawsuit, she said: “I’ll do whatever I have to do.”

Top officials were still working Wednesday to decide how to spend the final dollars from a planned $525 million public school infusion. And the size and scope of a public works borrowing bill was coming into focus.

Rep. Alice Hausman said negotiators were making headway on cobbling together a bonding bill large enough to gain support among minority House Democrats. Because those bills require a three-fifths majority to pass, it has to strike a balance that satisfies Senate Republicans wary of borrowing too much money and House Democrats hungry to fund construction projects.

Hausman said it will exceed $100 million and hoped the final product will double that, funding water treatment infrastructure, university facility improvements and other projects.

“(Lawmakers) have to feel that we’re fair to everyone,” the St. Paul Democrat said. “The smaller the bill, the harder that is to do.”

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