Special Session Post Primary As Expected

Governor Mark Dayton (DFL) and legislative leaders, Republican House Speaker Kurt Daudt (R-30A, Crown) and Senate Majority Leader Tom Bakk (DFL-03, Cook) announced there intent to meet in special session August 15th. As we had stated previously, if there was going to be a special session it would occur after the August 9th primary elections.

The various sides have agreed to focus on the issues which remained from the regular legislative session have dropped the more controversial items. This means the focus will shift to bonding, transportation and a tax bill. We expect the the final bonding bill will be around $1 billion, but we will not be surprised if the bill hits the magic number of $990 million, so Republicans can argue they didn’t exceed a billion.

Daudt has a primary challenge from a former Isanti County Board collegue Alan Duff, who is running as a Tea Party candidate. Daudt will depart for the Republican National Convention in Cleveland, OH next week and will be present for the nomination of Donald Trump (R).


Speaker Daudt Working Without a Net

Word out of the special session negotiations is no resolution, and no progress. We understand Republican House Speaker Kurt Daudt (R-31A, Crown) is doubling down and trying to solidify his conservative credentials. Effectively, he is not really negotiating. He brought forward lightning rod legislation we believed to have been laid to rest for 2016. i.e. vouchers and abortion

Interestingly, Daudt has not called a Republican House Caucus since the end of the legislative session. This means unlike former Speaker Steve Sviggum (R-Kenyon), who used to use the caucus as a foil, a body he had to consult before he could make a solid commitment, Daudt is flying solo.

We may understand why. There is an informal sub-caucus forming around freshman Rep. David Baker (R-17A, Willmar). The freshman class is expressing concerns over their forthcoming electoral fortunes. As concern grows among those with the eleven members with least amount of legislative experience, their anxiety could affect relations within the caucus, especially regarding the vote for speaker, if they hold majority, in 2017. The members of the Republican Freshman class are: Reps. Joshua Heintzman (R-10A, Nisswa), David Lueck (R-10B, Atkin), Jason Rarick (R-11B, Pine City), Jeff Backer (R-12A, Browns Valley), Tim Miller (R-17A, Prinsburg), David Baker (R-17B, Willmar), Bob Vogel (R-20A,Elko New Market), Brian Daniels (R-24B, Fairbault), Nels Peterson (R-26B, Rochester), Eric Lucero (R-30B, Dayton) and Dennis Smith (R-Maple Grove).

As previously stated, we believe the probability for a special session is most likely after August 9th.

A Random Meeting with Speaker Daudt Provides Insight into Special Session

Last Saturday, during the running of Grandma’s Marathon C&B Publisher Shawn Towle happened upon Republican House Speaker Kurt Daudt (R-31A, Crown) in Canal Park. The Speaker was alone, without an entourage and, when asked about his presence in the Zenith City said, “I was going to run this year, but with the session, I just didn’t have the time. I am here supporting a few friends.”

Towle engaged the Speaker asking about the feasibility of having a special session and initially, Daudt maintained the “party line.” He said, “The Governor is going to have to give on a few things, and Southwest Corridor is a non-starter, and he knows that.” He continued, “I think we’re close, there’s no way we can make it happen by July 1st, but it would need to happen before Labor Day.”

Towle asked about the size of the Bonding Bill, to which the Speaker answered, “We put forward our bill ($990 million) and he wants a few things and if it’s not too much we should get there.”

Towle then challenged a statement made by the Speaker, in which he said, there were enough votes in the chamber for a $1.4 million Bonding Bill, saying there were enough combined Republican/DFL votes, but not enough Republican votes to make up the majority of the 81. Daudt’s response not in my caucus.

During the bulk of the conversation Daudt referred to the Governor multiple times, but no Senate Majority Leader Tom Bakk (DFL-03, Cook). This raises an issue of whether Daudt sees Bakk as a factor in the negotiation. We understand the two sides are meeting shortly (10:00 AM) and will have an additional report later.

The timing of Daudt’s comments, not before July 1st and before September 5th are quite telling. This means the Primary on August 9th appears to be the defining factor. Daudt is facing a Primary Challenge from Alan Duff, a Tea Party Republican, and Veteran’s advocate. You may remember we pointed out the fact the Tea Party of MN had parked a paneled van outside of Daudt’s district challenging his conservative credentials.


We learned later Rep. Tom Hackbarth (R-31B, Cedar) was one who came to Daudt’s defense and tried to have the trailer removed. Hackbarth too is facing a Primary challenge from a Tea Party candidate and his challenger Calvin Bahr defeated him for the GOP endorsement.

Our happenstance meeting of Daudt in Duluth may be a testament to the fact he is not taking Duff too seriously, and portrays a bit of self-confidence, though his critics are hoping it betrays a bit of hubris. Those hoping for Daudt’s failure point to former House Majority Leader Eric Cantor (R-VA) and his loss to Tea Party candidate David Brat (R).

We agree Daudt may view the political landscape far differently after August 9th.

Governor to Explain His Pocket Veto Today

At 10:00 AM Governor Mark Dayton (DFL) will meet with the press to discuss his decision to cast a “pocket veto” of the Tax Bill. The explanation of a pocket veto can be found in Article IV Section 23 of the Minnesota Constitution. It is clear by not signing the bill and not presenting it to the Secretary of State’s office the legislation dies. This action is applauded by many circles and derided by others. Mainly, Democrats laud his efforts and Republican malign them.

The main reason for the veto was the use of an “and” instead of an “or” is a line that provides a tax break for charitable gambling. The difference would cost $101 million in the state budget over the next three years, rather than $1.5 million. Also there is a provision for elimination of automatic increases of tobacco taxes, which would cost the state to lose $126 million in revenue. We expect this tax expenditure will not be included in any final Tax Bill next time.

We have called for this specific action for the last two weeks and believe it sets the stage for either a simple Special Session or not one at all. Dayton has called for early agreement from all four legislative caucuses before he will call a Special Session. Prior to doing so he wants additional funding for transportation, including mass transit, higher education and budget items which failed to pass last session, and a letter signed to that effect.

The question is how badly the Republican Caucus wants a Tax Bill. Sources in the DFL Senate Majority believe they can run without a Tax Bill, which would be nice to have, but not necessary, without a Transportation Bill, because they can blame the Republicans in the House, or even a Bonding Bill, because again Republicans are to blame.

DFLers are setting up to make the 2016 a referendum on the 2012 election where divided government was eliminated and government proved its ability to move things forward versus 2014 where divided government caused everything productive to grind to a halt. Tradition dictates, Democrats gain seats in Presidential election years and we expect this year will be a banner one for the DFL in Congressional and legislative races.


Section 23

Approval of bills by governor; action on veto.

Every bill passed in conformity to the rules of each house and the joint rules of the two houses shall be presented to the governor. If he approves a bill, he shall sign it, deposit it in the office of the secretary of state and notify the house in which it originated of that fact. If he vetoes a bill, he shall return it with his objections to the house in which it originated. His objections shall be entered in the journal. If, after reconsideration, two-thirds of that house agree to pass the bill, it shall be sent, together with the governor’s objections, to the other house, which shall likewise reconsider it. If approved by two-thirds of that house it becomes a law and shall be deposited in the office of the secretary of state. In such cases the votes of both houses shall be determined by yeas and nays, and the names of the persons voting for or against the bill shall be entered in the journal of each house. Any bill not returned by the governor within three days (Sundays excepted) after it is presented to him becomes a law as if he had signed it, unless the legislature by adjournment within that time prevents its return. Any bill passed during the last three days of a session may be presented to the governor during the three days following the day of final adjournment and becomes law if the governor signs and deposits it in the office of the secretary of state within 14 days after the adjournment of the legislature. Any bill passed during the last three days of the session which is not signed and deposited within 14 days after adjournment does not become a law.

If a bill presented to the governor contains several items of appropriation of money, he may veto one or more of the items while approving the bill. At the time he signs the bill the governor shall append to it a statement of the items he vetoes and the vetoed items shall not take effect. If the legislature is in session, he shall transmit to the house in which the bill originated a copy of the statement, and the items vetoed shall be separately reconsidered. If on reconsideration any item is approved by two-thirds of the members elected to each house, it is a part of the law notwithstanding the objections of the governor.



Governor Dayton, Be Wary, Be Very Wary of Daudt’s Words

Yesterday, Governor Mark Dayton (DFL) laid out the requirements, he has for calling a Special Session. The list of requests include: correction of language in the Tax Bill which will cause the state to lose $101 million in tax revenue and spend an additional $243 million for bonding. These provisions are part of the overall package Dayton demands prior to calling the Special Session.

Today, Dayton clearly stated the agreement must be reached prior to Monday, the last day available for action on the Tax Bill. At risk is the $260 contained in the bill including a suspension of an automatic inflator on tobacco, which reduces economic pressures on smoking and loses an addition $26 million from the State’s General Fund. Dayton’s principal negotiation is with Republican House Speaker Kurt Daudt (R-30A, Crown). The problem is Daudt is not his own man. When Daudt’s encourages Dayton to sign the Tax Bill first and then the sides can discuss the rest of the issues for the Special Session, the governor should be cautious.

Now we’re not calling Daudt a liar, let’s just say his words are in doubt. President Ronald Reagan’s (R) adage for negotiating with the Soviet Union regarding nuclear arms agreements, was “Trust, but verify.” Dayton will be completely justified in applying the same approach when addressing any agreements with Daudt The veracity of Daudt’s words is in doubt and his integrity largely suspect, mainly, because he doesn’t carry the weight of his caucus into any bargain. The reality is, he must return to the cloister of his caucus for their approval of any proposal and compromise is not acceptable.

Any agreement struck by Daudt is more contingent on votes from the minority caucus then it is his own majority caucus. House DFLers should not be so short-sighted as to be duped this way again. Republicans are bargaining with the Tax Bill compared to the Bonding and Transportation Bills. If the Tax Bill goes unsigned then Republicans have nothing to carry into the November elections. If they want to retain the Tax Bill, but fail to agree in four days then everything will be on the table in the Special Session and this means the public will fully see what Republicans propose and how all of the pieces fit together in the full light of day, instead of secretive, behind closed doors negotiations.

We still think the best course of action is to veto the Tax Bill and make everyone start again. As Glenn Beck says, “Hit the Reset Button.”

Watch the Podium at the DFL Convention

The campaign for DFL Party endorsement for Governor in 2018 starts in earnest on Saturday. We will be watching the slew of speakers who are given speaking time before the convention and we believe, this will be an indicator of those eyeing the Governor’s office.

We expect to hear from Lt Governor Tina Smith (DFL), Attorney General Lori Swanson (DFL), and State Auditor Rebecca Otto (DFL) all presumptive gubernatorial candidates. The question is will House Assistant Minority Leader Erin Murphy (DFL-64A, St Paul), St Paul Mayor Chris Coleman (DFL), current DNC Vice-Chair, former Mpls Mayor RT Rybak (DFL) or other be given opportunities to address the throng of delegates.

Stay tuned and we will let you know.

Dayton Should Call a Special Legislative Session, But He Must Lead It’s Early End

Governor Mark Dayton (DFL) has the upper-hand; he holds all of the cards, only he can call a Special Session, and since legislative leaders have proven their inability to agree, he needs to take charge. Prior to the call, Dayton should demand all bills are presented in final form, without amendments, and a binding agreement is signed by both Republican House Speaker Rep. Kurt Daudt (R-30A, Crown) and DFL Senate Majority Leader Sen. Tom Bakk (DFL-03, Cook).

The end of the legislative session occurred as we expected, without much productivity. The Republican led House and the DFL Senate, along with the Governor couldn’t find agreement on much, including issues the Republicans campaigned on, Transportation and Rural Economic Development.

If Dayton forces the leaders to agree in advance, and announces the agreement publically, it will make the process more transparent and the public’s interests will be better served. The gamesmanship that took place this session was unconscionable. The secrecy and last minute dealings make Minnesota seem more like a country from the Soviet Eastern Bloc rather than a vibrant Democracy in the United States.

Veto the Tax Bill?

Yes, Dayton should veto the Tax Bill because this will force the two sides to negotiate earnestly; otherwise they lose the only accomplishment of the abridged eleven week legislative session. The issue in question is the suspension of the automatic inflator on tobacco taxation. The state loses $26 million from future state budgets, and operates opposite of the overall goal of reduction of tobacco consumption. The reality is many people would rather see our public policy of taxing tobacco to its end rather than continue to pay for the long-term healthcare costs of smokers.

The Shot Across the Avenue

The best line we have heard since session end is by Senate Assistant Majority Leader Katie Sieben (DFL-53, Cottage Grove) describing the session Bonding Bill crafted by House Republicans and sent over to the Senate with 15 minutes before the midnight deadline as, “The missile shot across University Avenue.” When the Senate received the bill, it lacked full funding for the agreement between the House and Senate of $20 million for the Metropolitan Council for transit. The Senate amended the bill with $10 million to fill the gap and in turn the House adjourned Sine Die.

What To Do?

The only way to resolve the impasse for the Governor to be the adult in the room, state clearly his demands, as we have already heard he wants funding for the University of Minnesota’s Health and Sciences Building for $243 million and more money for the MNSCU system. Traditionally, Higher Education receives 30% of the overall Bonding Bill and this year the amount falls far short of the mark. House Republicans will have to decide if the main issue is the size of the bill, or what communities can best be served. Since House Republicans are already on the record supporting a $990 million bill they can easily defend against a forced hand that increases the total. The bill left the House with 91 votes.

If the Bonding Bill is just increased with more projects and hence a higher price tag, then the House Republicans who withdraw support can easily be replaced with House DFLers. Many of the DFL opposed the bill mainly because of the covert and secretive process deployed by the Republican House Leadership, but they will step up when the process is far more open and more Minesotan.