- Associated Press - Tuesday, May 16, 2017

ST. PAUL, Minn. (AP) - Minnesota’s legislative leaders on Tuesday started to chip away at the massive differences that threaten to hold up a new, two-year budget, with Gov. Mark Dayton and leaders of the Republican Legislature starting to zero in on a budget with more spending than the GOP had proposed but more in tax breaks than Dayton had wanted.

The Legislature has less than a week to finalize a budget, and it’s not a done deal yet. House and Senate Republicans stressed they want more in tax relief, countering Dayton’s offer of a $500 million tax bill with their own proposal of an $875 million package. And any potential deal on government spending would hinge on the details of how that money is doled out.

“We’re still a significant ways apart,” the Democratic governor said.

In several rounds of private, hour-long meetings, the two sides started to close a $1 billion gap between them heading into the homestretch of the session. Dayton has previously proposed a roughly $46 billion budget, while Republicans’ proposal clocked in at nearly $45 billion. All told, Dayton offered to cut his spending requests by more than $624 million, with unspecified reductions to state agencies, jobs and economic development programs and funding for courts and public safety.

Republicans followed up Dayton’s offer with a second proposal that would narrow the gap farther.

But it wasn’t all progress, as the years-long debate over how to fund transportation repairs appeared to hit a snag. Dayton proposed raising license tab fees to pay for those projects, saying Republicans’ current plan to shift existing taxes on automobile parts and leases into a dedicated transportation account would be a “total drain” on state funding for public schools and other programs.

Dayton’s proposal would raise $321 million, though his administration couldn’t say Tuesday what that would mean in additional costs for the average driver. Raising license tab fees was part of an emerging deal last year between Democrats and Republicans, when the GOP controlled the House but not the Senate.

But Republicans’ takeover of the Senate in November has given the GOP extra power to stand firm against any tax or fee increases that Dayton has deemed necessary. House Speaker Daudt and Senate Majority Leader Paul Gazelka called its renewal a setback and unacceptable when the state has a $1.65 billion surplus.

“We have felt like it was off the table for some time,” Daudt said.

The offer-trading follows more than a week of standstill at the Capitol, after the GOP backed away from the negotiating table and sent Gov. Mark Dayton their own budget bills. Dayton vetoed all 10 such bills.

Despite the return to talks, legislative leaders are only talking in round numbers and not about specific changes to programs that could affect Minnesotans. That means the fate of Dayton’s prized preschool program - which Dayton sought to expand but Republicans proposed eliminating - is still up in the air. So are the specific tax breaks that Minnesota residents could get from Dayton’s $500 million offer or the GOP’s $875 million package.

And Dayton warned Republicans against loading their budget bills with policy he has promised to veto, like a delay of his marquee water quality measure requiring buffers between cropland and waterways.

“We haven’t even begun to discuss all the policy provisions that are lathered into these budget bills. “If we’re going to get into that, I see no way we’ll finish until next Monday.”

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