The Minnesota Legislature may have adjourned just before midnight on Monday, but that doesn’t mean its work is done.

Gov. Mark Dayton made it clear Tuesday he’s going to veto a proposed $17 billion education bill and call a special session later this year, which could include many more issues.

Dayton told reporters in a conference call Tuesday he would review legislative bills throughout the week and potentially veto more than just the education bill that didn’t include his proposal for universal pre-K funding.

“There may well be other measures that I will not support in other bills,” he said.

Local legislators weren’t surprised by Dayton’s announcement to veto the education finance bill Tuesday. Though Sen. Dan Sparks, DFL-Austin, remained positive about the compromise the House and Senate made this year, Rep. Jeanne Poppe, DFL-Austin, was displeased with the way lawmakers rushed through bills over the past few weeks.

“I think there’s just a lot of unfinished business in a legislative session that had so much potential because we had nearly a $2 billion surplus,” she said.

Dayton warned lawmakers last month he would force a special session if the Legislature didn’t address several key proposals, including a measure to fund universal preschool half-day classes for 4-year-olds.

Rep. Peggy Bennett, R-Albert Lea, said she thought there were many positive things approved in the bills and was disappointed Dayton is vetoing the education bill.

“I sat in on those education committees where we heard testimony after testimony about this,” Bennett said. “We heard it’s not a wise way to spend the money that we have, and we heard from a ton of local and Minnesota daycares that said this would basically do them in.”

She said part of compromise is coming together.

“The House gave up things they wanted, the Senate gave up things they wanted, and I really wish the governor would have supported that,” Bennett said.

Republicans and Dayton were about $25 million away from making a deal on education funding Monday night. House negotiators were willing to increase new education funding from $400 million to $500 million while Dayton countered with $550 million, then $525 million. Yet budget talks ended in stalemate at about 11:30 p.m. Monday, despite Dayton giving up his preschool proposal during negotiations.

With a special session looming, Dayton said he would now push for preschool funding and could urge legislators to address other issues, such as an agreement on transportation funding.

Both parties pushed transportation as the issue to tackle heading into the 2015 legislative session, but talks dried up after Republicans and even a few Democrats, including Sparks, opposed a 16-cents-per-gallon gas tax proposed by Dayton to fund infrastructure projects.

The House passed a stripped-down transportation plan Monday which would fund already-scheduled projects, but Dayton said he’s willing to tackle transportation this year.

“To walk away with nothing on it, only a lights-on bill, is really inexcusable,” he said.

Dayton wouldn’t say when he expects to call the special session, or where it would be held as the House and Senate Chambers are closed for a Capitol renovation project. The St. Paul Hotel has offered its ballrooms for the special session.

The political future

Despite a flurry of activity at the Capitol, several major issues for the area remain up in the air.

Sparks and Poppe both agreed politics played a large role in this year’s session as few measures were decided early on.

“I would never have thought we would go into special session when we had a nearly $2 billion surplus,” Poppe said.

Lawmakers didn’t pass a bonding bill for infrastructure projects, a Legacy funding bill to address needs around the state or a heavily contested tax bill this session. House Republicans had wanted about $2 billion in tax cuts while Senate Democrats offered a tax bill that would have funded transportation projects, Local Government Aid and other measures.

For Sparks, the session produced good results with a bill offering $138 million for rural nursing home reforms, along with significant agricultural reforms that included Dayton’s buffer strip proposal for land along Minnesota’s rivers, streams and lakes.

Though Sparks acknowledged setbacks in LGA funding and a proposed workforce housing fund he had championed, Sparks was pleased with the way each party compromised this year.

“For some people it’s not easy, but for a divided government that’s how it’s supposed to work,” he said.

Poppe had a different reaction to this year’s legislative battles. She was frustrated with the House and Senate’s backroom negotiations at the end of the session and had worried last Friday whether there would be enough time to review, let alone pass, much of the legislature’s required bills.

“It seems pretty unbelievable that at this point in time there were bills left on the table,” Poppe said Tuesday. “It’s just surprising to be in this position.”

Yet this year’s battles may indicate a shift in the state’s political landscape over the next few years. More Republicans represent Greater Minnesota communities, while more Democrats are elected to office in the metro area, which political analysts say could create a rural-vs.-urban dynamic at the polls next year.

Despite the special session, some local government officials are already calling out lawmakers over this year’s work. Austin CIty Administrator Craig Clark criticized the Legislature for not addressing more Greater Minnesota issues after House Republicans had promised 2015 would be a session for outstate issues.

“It hasn’t really happened that way,” Clark said during the Austin City Council’s public meeting Monday.

Bennett said under the nursing home reform, Parkview Care Center in Wells will see an about $318,000 increase in funding in 2016. Good Samaritan Society in Albert Lea will see $1.65 million, St. John’s Lutheran Community will see $2.36 million, Thorne Crest Retirement Community will see $551,000 and Prairie Manor Care Center in Blooming Prairie will see about $459,000.

“It’s the largest funding reform in a generation,” Bennett said. “I know the nursing homes are very excited about it.”

Quick look at the issues

— Education will be the biggest battle in the upcoming session. Dayton will push for universal preschool funding, which he said Tuesday would be optional for districts to implement. Dayton further said nothing would be taken out of the current $400 million education proposal but there could be plenty added, including free breakfast programs for pre-K and first-graders, funding for Bureau of Indian Education schools, special education funding and more.

Bennett’s bill for teacher loan forgiveness in geographic or licensure shortages was included in the education proposal.

— Local Government Aid won’t increase this year after lawmakers couldn’t pass a tax bill. The House proposal caps aid given to so-called “first class” cities such as Minneapolis, St. Paul, Duluth and Rochester based on population and residents per capita, which would end up cutting about $85 million in total from LGA. Only Rochester would be unaffected by the funding shift, and LGA levels would largely freeze for other cities.

In contrast, the Senate proposal would add $45.5 million to LGA, which would bring aid funding up to its 2002 levels.

— Transportation funding isn’t a dead issue yet. Though nothing was done to increase funding during the regular session, Dayton may call on legislators to address the issue during the upcoming special session.

— A bonding bill and the Legacy amendment funding bill will be discussed during the special session.

— Sparks’ proposal to create a workforce housing office with a $40 million budget over the next few years died with the tax bill, but a jobs and energy bill included language creating more workforce housing grants for projects through the state’s Department of Employment and Economic Development.

— MinnesotaCare will remain funded after a last-minute battle over the state’s Health and Human Services budget. House Republicans had wanted to shift funding to state tax credits for MinnesotaCare’s 90,000-plus recipients, who would have bought insurance through the MNSure health insurance exchange.

— A proposal to allow counties to hire private firms for state audits won’t fly, according to Dayton. The governor will fight back against the move, which would strip responsibilities from the state auditor’s office.

— The state’s agriculture bill includes more funding for research at the University of Minnesota, as well as rapid response funds for environmental emergencies such as the state’s current avian flu crisis.

Sarah Stultz contributed to this report