GOP prepares to test Dayton’s tax resolve

Published 8:06 am Wednesday, May 16, 2018

ST. PAUL — Legislative Republicans on Tuesday prepared to test Gov. Mark Dayton’s resolve, readying a bill that syncs Minnesota taxes with the federal overhaul despite the Democratic governor’s promise he’d block that legislation until lawmakers provide emergency funding for public schools.

Lawmakers have less than a week to finish their work, but Dayton and Republicans who control the Legislature remain worlds apart on nearly every priority for the year. Dayton told reporters Monday that he wouldn’t negotiate or sign a so-called tax conformity bill until the Legislature provides $138 million to 59 public school districts facing budget shortfalls.

But Republicans didn’t buy it, and instead lined up a sudden vote on their tax proposal that would match Minnesota’s taxes with federal breaks passed by Congress while modestly cutting income tax rates. A House Republican spokeswoman confirmed it was set for a vote later Tuesday.

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“We’ll get this bill to the governor and then we’ll have to let him make his decision,” said Rep. Greg Davids, the Republican House Taxes Committee chairman.

The Legislature faces a Sunday night deadline to finish passing bills. Dayton’s ultimatum sought to pressure GOP lawmakers into providing the emergency school funding they had deemed unnecessary this year. Republicans’ sudden move on taxes could force Dayton to the negotiating table, or test him to sign it.

But it also reflects the growing unease at the Capitol as time winds down. None of the major priorities for the year — including a tax bill, money for school security upgrades, and efforts to curb opioid abuse and address widespread abuse in senior living facilities — have been sent to Dayton’s desk.

The Legislature entered the session focused on taxes, tasked with avoiding a nightmare during next year’s tax filing season and ensuring hundreds of thousands of residents weren’t hit with tax increases.

Sen. Roger Chamberlain, who chairs the Senate Taxes Committee, said the Legislature tried to move toward the governor by removing provisions that would exempt more wealthy estate owners from taxes and automatically trigger future income tax cuts during times of state budget surplus. But Dayton’s top tax official, Revenue Commissioner Cynthia Bauerly, told lawmakers the administration was still concerned that the GOP proposal benefited wealthier taxpayers more than low- and middle-income families.