- Associated Press - Wednesday, May 13, 2015

ST. PAUL, Minn. (AP) - Minnesota budget negotiations entered a holding pattern Tuesday, with each side urging the other to make a serious move to bridge an enormous divide over tax cuts, education spending and transportation funding that has narrowed little through days of private meetings.

Legislative leaders met for almost eight hours of at the governor’s residence before adjourning around 11 p.m. with a plan to resume late Wednesday morning. They were saying nothing about the status of major issues, usually a sign that discussions were getting more serious.

It was a noticeable change from Monday when talks broke up abruptly, leaving Democratic Senate Majority Leader Tom Bakk and Republican House Speaker Kurt Daudt to put stalled negotiations at each other’s feet.

“If the House wants a deal, it will come together,” Bakk said in his office Tuesday. “If they really want to get done on time, we’ll get done on time.”

Bakk avoided reporters after Tuesday’s negotiating sessions, and Daudt was uncharacteristically silent as well.

There’s plenty of ground still to cover, from Republicans’ wish list of $2 billion in tax relief and nearly $1 billion in health care spending cuts to Democrats’ top prize, a gas tax increase for road and bridge repairs. And there’s extra pressure for a timely finish in the form of the aging Capitol building under renovations. Department of Administration Commissioner Matt Massman said a special session would be “catastrophic” for the project, putting work on hold and adding extra strain to renovations that are already on a tight timeline to wrap up by 2017.

Bakk said the two sides have mostly nailed down a deal on smaller pieces of a nearly $40 billion budget such as funding for courts, public safety, agriculture and environmental programs.

And Daudt softened the GOP’s stance on ending MinnesotaCare, a public health care program for nearly 100,000 low-income residents. After Dayton declared MinnesotaCare “off the table,” Daudt said Republicans are merely trying to lay out a roadmap for the program as its main funding source - a tax on health care providers - is set to expire by 2020.

“We need to start the transition,” the speaker said.

But Bakk ramped up pressure on Daudt to drop the tax bill in exchange for ditching the transportation package - a trade he’s suggested for nearly a week. With a $1.8 billion surplus, those bills aren’t must-haves and are consuming negotiators’ precious time, Bakk said.

“I think they’re both dead,” he said. “It’s Tuesday, we have to start focusing on bills that have to pass.”

A clearly frustrated Daudt struck back, blaming Democrats’ insistence on a tax increase for the current impasse on a broader budget deal.

“I’m not willing to put a stake in something that was everyone’s No. 1 priority simply because Gov. Dayton and Sen. Bakk can’t have a gas tax,” the Republican speaker said. “If anybody’s curious as to why we’re not moving, Sen. Bakk’s statements … ought to give you a crystal clear indication as to what’s holding up negotiations at this point.”

Just as Bakk called on Republicans, Daudt said Democrats need to make some concessions to start inching toward a deal. Daudt said Dayton moved in the wrong direction Monday with a call to put extra money into the state’s per-pupil formula for K-12 schools.

With less than a week to go, rank-and-file lawmakers are waiting for a high-level deal between the power brokers to start passing budget bills. Several freshman Republican legislators also said they wouldn’t take Bakk’s proposed deal either.

Though Rep. Brian Daniels and others acknowledged the finished product won’t include the $2 billion in tax relief they hoped for, he said the budget needs to include some package of tax cuts to get his vote.

“It’s got to be something,” the Faribault Republican said. “I’m really anxious to see what the finished product is going to be.”

___

Associated Press writer Brian Bakst contributed to this story.

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