DONE DEAL: SEN. KOCH, REP. MCDONALD SAY END SHOULD BE IN SIGHT FOR STATE SHUTDOWN

Minnesota’s legislators are heading back to work.

Gov. Mark Dayton and state Republican legislative leaders Thursday afternoon agreed on a preliminary budget and took the first steps toward ending the government shutdown.

During a three-hour meeting in the governor’s office, the parties agreed to a June 30 Republican budget proposal that would not raise taxes, but would borrow money to balance the budget. The deal will raise $1.4 billion by issuing state bonds against future tobacco revenue ($700 million) and shifting K12 education aid from 70/30 to 60/40 ($700 million).

In a tense meeting with reporters at the Capitol following the meeting, Dayton said he expects to call a special session for legislators and to pass a budget “very soon. Within days.”

“This is an agreement that is difficult for both sides,” said Senate Majority Leader Amy Koch, R-Buffalo. “There’s been some good discussions and some coming together on agreements for reforms.”

Rep. Joe McDonald (R-Delano), who represents Wright County with Koch, called the day "progress."

"There are obviously things I have questions about," McDonald said. "The tobacco bonds are a concern with me. I thought we were asking people to stop smoking? But we're going to borrow against a tax that comes from tobacco sales. That's not good business, in my opinion." 

Dayton said he expected he and Republican leadership would work late into the night and through the weekend.

The Senate's Minority Leader, Tom Bakk, said the DFL caucus would not comment on the negotiated agreement, adding that it was "premature" and many specifics of the deal were "still to be determined." 

Still, the DFL's communications office said meetings in a special session could begin as early as "Monday or Tuesday." And DFLers were asked to be "available" via phone or e-mail throughout the weekend. 

House Speaker Kurt Zellers (R-Maple Grove) agreed reaching a deal—as well as the shutdown—has been difficult.

“We are in an imperfect situation,” Zellers said. But in the end, “we’re focused on getting the lights back on and getting the government up and running again.”

Despite the agreement, Dayton reiterated his disappointment with the deal which he announced Thursday morning.

“I’m disappointed I wasn’t able to pursuade a legislative majority of the wisdom of my approach to raise taxes on the wealthiest Minnesotans,” Dayton said. “In the absence of that,
however, this is an agreement today.”

Said Zellers: “Today was about making a deal that we’re disappointed in,  but that’s done. None of us got exactly what we wanted. But we have a deal that will be done, a budget that will be balanced and a state that will be back to work.”

As part of the agreement, Republicans agreed to three of Dayton’s conditions. .

Koch said she expected the budget to pass the special session.

“We’re working with our caucus. We need to hammer out final details in these bills but we’re confident,” Koch said. “We’re focused solely on making sure these bills are processed as quickly as possible.”

McDonald said there will be work to do.

"There are some things he pulled off the table that we'd like to see done," he said. "The 15 percent reduction in the workforce is one of those. Could we scale that back? Yes. But we need to look at that, otherwise the entire spreadsheet needs to be reset to make the numbers work."