Deadline passes on tax relief bill

Published 11:02 am Tuesday, June 7, 2016

ST. PAUL — Gov. Mark Dayton let Monday’s midnight deadline pass without signing a $260 million package of tax cuts and credits for parents, farmers and college students, killing the bill amid an impasse over how to handle a potential special session to finish the Legislature’s work.

Dayton spokesman Matt Swenson said just after midnight that the governor did not sign the bill. The pocket veto ended weeks of uncertainty over how he would handle the measure, which the Legislature passed before adjourning late last month with a wording error that could have cost the state more than $100 million. Dayton had vowed he wouldn’t sign it unless lawmakers agreed to a fix and to put up extra money for some of his funding priorities such as projects at the state’s public universities and a pair of state investment programs.

But the talk of a special session won’t die with the tax bill. Dayton and lawmakers have discussed an overtime session to wrap up unfinished work, such as a $1 billion-plus list of public construction projects and transportation repairs. The tax bill could also get revived if lawmakers return for a special session.

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The package of $260 million in tax credits and cuts passed with widespread support in both the Republican-controlled House and Democrat-led Senate. It includes such items as a tax credit for college graduates with loan debt, tax cuts for working families and a property tax exemption for the planned Major League Soccer stadium in St. Paul.

But Dayton said the drafting error put more than $100 million in taxes on charitable gambling in jeopardy. The state is counting on that money to help pay its share of the Minnesota Vikings’ new stadium.

Earlier Monday, House Republicans ratcheted up pressure on Dayton to sign the bill, bringing a throng of farmers, parents and veterans to St. Paul to help make their case. Republican House Speaker Kurt Daudt accused Dayton of using tax relief as leverage to squeeze more spending out of lawmakers.

“There’s no way to look at this other than the governor is holding the tax bill hostage,” Daudt said.