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Dayton set for pocket veto of tax bill

ST. PAUL -- Minnesota Gov. Mark Dayton says he will not sign tax legislation containing a $101 million error. The result is that short of a last-minute change of heart by a top Minnesota politician, tax cuts affecting people across the state will...

ST. PAUL -- Minnesota Gov. Mark Dayton says he will not sign tax legislation containing a $101 million error.

The result is that short of a last-minute change of heart by a top Minnesota politician, tax cuts affecting people across the state will not become law.

If the governor does not sign the bill, known as a pocket veto, the legislation will die Monday. It could, however, be brought up again in a special legislative session if one is called.

A late-Friday afternoon meeting Dayton hosted did not seem to change anything, but House Speaker Kurt Daudt, R-Crown, said legislative leaders and Dayton plan to meet again Monday. The speaker said he suggested a Monday special legislative session to fix the tax bill, but Dayton refused.

"We did not make any movement, but I think people understand each other's feelings a little better now..." Daudt said after the meeting. "I think the governor has to sign the tax bill with everything in it."

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Dayton left for his son's birthday party and did not talk to reporters after the meeting. Democratic legislative leaders also avoided reporters.

Dayton spokesman Matt Swenson said the governor "reiterated his position that he will not sign an omnibus tax bill that includes a $101 million error," just what Dayton has told reporters for days.

Daudt did not believe Dayton: "I think he will see the light before Monday."

Revenue Commissioner Cynthia Bauerly said that a one-word mistake in writing the tax bill would cost Minnesota $101 million. Dayton and Bauerly say the only fix is the Legislature passing a revised bill.

Putting "or" in one spot in the bill instead of "and" means some charitable gaming organizations would pay lower taxes, $101 million over three years.

Some of those taxes are to help fund the new Vikings stadium construction.

Commissioner Myron Frans of Minnesota Management and Budget said that without the money the state may be forced to establish a 10 percent stadium suite rental tax and launch a new Minnesota Lottery game. The back-up funding options were included in a 2012 stadium bill.

The one-word error, out of nearly 120,000 words in the bill, is enough to convince Dayton that the legislation must be vetoed.

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Many organizations are trying to convince Dayton to sign the tax bill, saying a veto would affect millions of people.

"Minnesotans are growing wary of our governing institutions’ apparent dysfunction," Le Sueur Mayor Robert Broeder, Coalition of Greater Minnesota Cities' president, wrote Friday in a letter to Dayton and legislative leaders. "Sadly, many citizens are no longer surprised by it. However, it would be absurd if a bill that passed with such strong bi-partisan support in both bodies of the Legislature, and whose final contents are seemingly agreed to, does not become law."

Minnesota cities stand to lose $20 million in state aid if the bill sustains a pocket veto.

Tax bill supporters say it would provide more than $800 million in tax relief in the next three years. Included would be tax breaks for farmland owners, students paying off loans, families saving for college, business owners, veterans, working families, childcare users, a siding company considering opening an Iron Range plant, a St. Paul soccer stadium and others.

While taxes are the main debate now, legislative leaders also have suggested that Dayton call a special session to pass more than $1 billion in construction projects, including highways and bridges.

The governor said he has other demands, including spending more than legislators planned, before he will call a special session. "This is my way of achieving some compromise that was not available to me at the end of session."

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