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No deal in state budget talks as layoffs loom

By David Mongomery /St. Paul Pioneer Press

Friday began with optimism: "Today's the day!" House Speaker Kurt Daudt told reporters as he walked into Gov. Mark Dayton's house, an offer in hand to try to resolve a weekslong political standoff over the state's education budget.

But things immediately went south, despite Dayton giving up his insistence for universal preschool.

Daudt's offer infuriated Dayton by asking for two policy provisions the DFL governor opposes: repealing the state's seniority rules for teacher layoffs, called "Last In, First Out." or LIFO, and a proposal requiring transgender students to use school bathrooms for their physical sex rather than their gender identity.

Neither provision had been included in the final education budget Dayton vetoed earlier this month. The governor struck down that bill not because of anything in it, but because he said it didn't include enough money for early childhood education.

Because of that veto and two others, 10,000 Minnesota state employees will get layoff notices next week, advance warning that their jobs will go away on July 1 if a budget isn't passed on time.

When negotiations broke off for the day late Friday afternoon, Dayton criticized the Republican leaders, calling Friday's talks "disappointing" and a "step backward."

"It's like we talk different languages," Dayton said of Daudt and House Majority Leader Joyce Peppin.

Daudt put a cheerier spin on the day's events, calling it "another good day." But he said both sides needed a break.

"Folks sometimes have to retreat to their corners and talk and think," the Republican Speaker said.

Unlike recent days, when Dayton and Daudt have stood side by side to update the public on their negotiations, the two leaders gave separate news conferences Friday.

In the afternoon, after Dayton's rejection of their earlier offer, Daudt came back with a revised proposal: $25 million in extra money, abandoning the transgender bill, and offering what they called a "LIFO compromise": instead of requiring school districts to consider teacher merit when deciding who to lay off, it would repeal the state language mandating seniority but let districts negotiate their own layoff procedures with teachers.

That didn't mollify the governor, who called it "a total nonstarter" for both him and the DFL-controlled Senate.

Dayton suggested Republicans were willing to give Dayton more money if he approved one of their priorities.

"They keep saying, 'We need something to take back to our caucus like LIFO, like (the transgender bill)," Dayton said.

Both sides argued they were being reasonable while the other side was stubborn. Republicans emphasized how they had been willing to offer $125 million in new spending -- the same amount Dayton had been willing to accept on the last day of the legislative session.

"We've moved considerably already," Peppin said. "(We're) hoping for some movement on the other side."

Dayton, in contrast, highlighted how he had given up his push for universal preschool -- an issue he called his top priority in the final weeks of the session. He called that surrender "a huge concession" -- though the governor said he intended to push for universal preschool again in future years.

Instead, Dayton wants extra money for existing preschool programs -- the ones Republicans have been promoting in opposition to Dayton's universal, school-based preschool plan.

But the governor has retreated from his mid-May offer of $125 million in new education spending and now wants more money.

"I'm not going to walk into that room and continue the pretense of progress for less than $150 million," Dayton said.

There are some areas where the two sides have agreed. Dayton and Daudt have approved giving another $62 million to school districts through the school funding formula. They've also agreed to keep a compromise about buffer zones around the state's waters in the agriculture bill, one of the other measures Dayton vetoed. That agriculture bill and the other vetoed measure, the jobs and energy budget, have seen significant progress -- unlike the education budget.

It's unclear when Dayton and Daudt will meet again to resume their negotiations. Both men offered to keep talking over the weekend, but they haven't set a time.

Once Dayton and Daudt strike a deal, and get approval from Senate Majority Leader Tom Bakk and the minority leaders in both chambers of the Legislature, lawmakers will need to return for a special session. That has to happen before July 1 to prevent the layoffs and a partial government shutdown.

David Montgomery can be reached at 651-224-5

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