- Associated Press - Tuesday, May 23, 2017

ST. PAUL, Minn. (AP) - Minnesota legislators went into overtime Tuesday to wrap up work on a $46 billion state budget and conclude a nearly five-month session, but slow progress on final spending agreements left lawmakers with no guarantee they’d meet even their extended deadline.

Democratic Gov. Mark Dayton and the Republicans who control the Legislature struck an agreement shortly before midnight Monday - the mandated end of the regular session - on how to use a $1.65 billion surplus. They agreed to put $650 million toward tax relief, $50 million to expand preschool offerings and $300 million to fix roads and bridges in a special session.

But time in their overtime session ticked away as the two sides slowly finalized detailed agreements for how to finish up the bulk of the state’s budget. It left the Legislature with a logistical crunch to get the remaining bills drafted - a process that can take up to 10 hours for some bills - and ready for final votes in both chambers, raising the prospect that lawmakers would need yet another extension to finalize the budget beyond their new deadline at 7 a.m. Wednesday.

“When it becomes apparent if we need extra time, we will talk to the governor about that,” House Speaker Kurt Daudt said. “We knew last night it was a distinct possibility that we may need extra time.”

The Legislature sent Dayton five budget bills before the regular session came to a close Monday, but the outstanding spending packages eat up 85 percent of the state’s overall budget. The House and Senate planned to work through the night and into the morning to pass the remaining bills.

Details behind those massive spending bills weren’t released until late Tuesday. It would devote three-quarters of the state’s budget surplus to boosting spending for public schools and tax cuts. An education budget pays to increase the state’s per-pupil funding formula by 2 percent in each of the next two years, while also setting aside $50 million to expand preschool options - a top priority for Dayton.

Initial plans for a $660 million bill of tax breaks shrunk by $10 million in last-minute negotiations. But new tax cuts would be created for college savings plans and tuition debt, Social Security income and first-time homebuyer accounts. The planned Major League Soccer stadium in St. Paul would get a long-awaited exemption from state and local property taxes. In another move, the bill would also slash taxes on premium cigars - from $3.50 to 50 cents each - and remove inflation-adjusted increases for cigarette taxes that were approved in 2013.

Dayton had deemed expanding a preschool program launched last year into more schools a must-have in the budget, funding Republicans resisted. And the GOP pushed the Democratic governor for more in tax relief and a transportation funding plan that doesn’t raise gasoline taxes or license tab fees. Their agreement also calls for nearly $1 billion of public construction projects, with a healthy share earmarked for transportation repairs.

“I think it really represents true compromise. We’re getting some things we wanted, the governor is getting some things he wanted,” Daudt said. “We’re pretty happy with that.”

But Republicans were also planning to send an unwelcome bill Dayton’s way. After saying they’d send a bill blocking cities from implementing their own minimum wage hikes or sick leave policies - which Dayton promised he’d veto - the GOP unveiled legislation Wednesday that was also loaded with measures meant to tempt the Democratic governor. That includes an extension of a new parental leave policy for state employees set to soon expire, ratification of several labor contracts and pension funding increases.

Dayton blasted the maneuver as “unconscionable” in a statement and said he would still veto the bill.

Special sessions have become routine at the Legislature. Lawmakers needed a one-day overtime session while setting its last budget in 2015 after Dayton vetoed several spending bills. In 2011, deep disagreements between Dayton and a GOP-controlled Legislature over how to solve a $6 billion shortfall triggered a 20-day government shutdown that ended only after a special session.

Whether the last-minute plan ultimately succeeds will rest on rank-and-file lawmakers. Though Republican lawmakers hoped for less in spending than the final plan entails, GOP Rep. Bob Dettmer, of Forest Lake, said the overriding factor in his approval would be getting the budget done as soon as possible.

“I’m glad we gaveled out and gaveled right back in. That’s the right way to do it,” he said. “We have to get our work done.”


Follow Kyle Potter on Twitter at https://twitter.com/kpottermn and follow Steve Karnowski at https://twitter.com/skarnowski .

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