Business tax breaks in bill cause divide, veto
Republican leaders spoke on Friday of “burning the last bridge” and damaged future votes in slamming Democratic Gov. Mark Dayton’s veto of the Republican tax bill.
Dayton vetoed the tax bill on Friday, hours after it received its final votes on the Senate Republican floor and was sent to the Governor’s Office.
“He vetoed our highest priority,” Senate Tax Committee Chairwoman Julianne Ortman, R-Chanhassen, said suggesting the veto could affect upcoming votes at the Legislature.
The Vikings stadium vote is scheduled for Monday in the House.
Dayton had agreed to various provisions in the bipartisan tax bill, Ortman explained.
And he vetoed it anyway.
“I don’t know frankly how we can work with him again,” she said.
Republican leaders heralded their tax bill as promising to create more new jobs than the Vikings stadium and bonding bills combined.
Besides a statewide business property tax freeze, the bill contained important provisions relating to job-inducing upgrades at Mall of America, they argued.
“This was a reasonable tax bill,” House Speaker Kurt Zellers, R-Maple Grove, said.
The Republican leaders depicted Dayton as veto-happy.
Not only did the governor veto the tax bill, but legislation such as redistricting adjustments to Senate Districts 39 and 49 — common sense corrections, Zellers argued.
“You don’t move Minnesota forward with a red veto pen,” Senate Majority Leader David Senjem, R-Rochester, said.
Zellers, too, suggested the veto could change attitudes on the Vikings stadium vote.
The governor should call the stadium “Yes” and “Maybe” lawmakers and talk about it, Zellers suggested.
But at a morning press conference Dayton said he flatly told Republican leaders his stance on the tax bill was independent of the Vikings stadium vote.
“I would not sign a bad tax bill for a stadium,” Dayton said he told Republicans.
“Hopefully legislators will separate the issues,” he said.
Although Ortman indicated Dayton’s veto came as a surprise, Dayton Administration officials for several days have been indicating that the governor was likely to veto the tax bill.
“There are parts of the bill that I agree with,” Dayton said.
But the tax relief afforded by the bill was distributed unfairly, Dayton argued.
Out of about $45 million in tax relief, $41 million was targeted toward business, he points out in his veto letter.
Only about $4 million was slated to homeowners and none to renters and others, the governor said.
The statewide business property tax freeze and other tax breaks in the bill would add $145 million to an already large state budget deficit projected for next biennium, Dayton explained.
And the proposed freeze of the statewide business property tax would cut state revenues by more than $2 billion over the next 14 years, Dayton pointed out.
“(But) I’m am willing to negotiate,” Dayton said.
Although backhanding the governor for his veto, both Senjem and Zellers indicated a willingness to go back to the negotiation table.
Republicans, explained Dayton, never responded to his last counter proposal on the tax bill.
One proposal Dayton has for increasing taxes is adding the Affiliate-Nexus provision to state law.
The provision would have retailers with broad networks of online affiliates collecting and remitting the state sales tax.
House Tax Committee Chairman Greg Davids, R-Preston, in a statement criticized Dayton for the veto.
“While I could call his veto ludicrous, harebrained, laughable or appalling, I will simply say he is wrong,” said Davids, using some of the words the governor has recently used in describing the actions of Republicans.
But House Minority Leader Paul Thissen, DFL-Minneapolis, thought Dayton did exactly the right thing.
“In this tax bill Republicans made it crystal clear that corporations and big businesses are their top priority,” Thissen said in a statement. “Governor Dayton made the right choice for Minnesota’s future by vetoing it.”
