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Tax cuts, public works funding futures dark

Legislation that could give tax breaks to a majority of Minnesotans appeared to be on a slow-motion slide to its death Monday, perhaps taking with it any chance for transportation and other public works project funding.

The tax bill would have provided $800 million in tax cuts over three years to people as varied as farmers, veterans, parents and students, but was held up by a one-word mistake that could cost the state $101 million.

While legislative leaders and many government officials and organizations statewide have urged Democratic Gov. Mark Dayton to call a special legislative session to fix the tax bill and approve the state selling bonds to finance public works projects, the top Republican lawmaker on Monday made the prospects sound dim.

"The further we get from where we are right now, the more difficult it gets," House Speaker Kurt Daudt, R-Crown, said.

House Republicans would have a hard time accepting some of Dayton’s demands that he insists be met before he calls a special session. Dayton’s requirements include providing some funds for Twin Cities transit and borrow money for a new University of Minnesota medical facility.

The tax bill, which to become law needed to be signed by midnight Monday, was key to getting transportation and public works funding on the table in a potential special session. In recent days, Dayton has repeated his strong belief that he should not sign a bill with such a big mistake.

The problem was that "or" was placed in the legislation where an "and" should be. The result would have been a big cut in taxes collected on charitable gambling, reducing money that should have gone to Vikings stadium construction.

Instead of actively vetoing the bill, Dayton opted to allow a "pocket veto." That is when a governor does not take action on a bill within two weeks of the end of a legislative session.

"The governor’s position has not changed; he will not sign a tax bill that includes a $101 million error," Dayton spokesman Matt Swenson said Monday afternoon.

The governor did not talk to legislative leaders Monday, nor did he discuss the issue with the media.

Daudt spokeswoman Susan Closmore said the speaker suggested a Monday meeting among the governor, Daudt and Senate Majority Leader Tom Bakk, D-Cook.

"Via Sen. Bakk, the governor has declined," Closmore wrote to reporters.

Swenson said Daudt never contacted Dayton’s office for a meeting. However, Swenson added, the governor was trying to organize a Tuesday meeting with legislative leaders.

Earlier Monday, Daudt organized a news conference with his members and Minnesotans who would be affected by lack of a tax bill.

Ryan Visher, owner of Hope and Faith Floral in Madelia, said Dayton promised tax help after several downtown buildings burned to the ground earlier this year.

He especially is concerned about higher property taxes, he said in an interview.

The most recent sale of a downtown building brought $80,000, Visher said, but his new building will cost $650,000. That would mean a large property tax jump and the bill would have slowed the tax increase.

Gustavus Adolphus College student Nathan Dull said he wanted the tax bill because it would give him tax breaks when he repays loans. Others would get tax cuts when saving for college.

Republicans brought farmers to the media to explain how they would have benefitted from a provision lowering their taxes for school construction projects. And business owners said statewide property tax cuts would help them.

Aitkin County Commissioner Don Niemi emphasized the importance of lowering Main Street business taxes.

Twins Wayne Carrier and Wendell Carrier, Korean war veterans, said fellow military veterans stood to benefit with $13 million in tax cuts.

"Us veterans are on fixed incomes," Wendell Carrier said.