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Minnesota leaders announce budget deal 'framework'

Minnesota's budget negotiators stand grim-faced in front of the governor's office Thursday evening to announce a framework of a budget deal that could end the government shutdown. From left are House Speaker Kurt Zellers, Gov, Mark Dayton and Senate Majority Leader Amy Koch. Don Davis/Forum Communications

ST. PAUL -- Minnesota government could reopen within days if what appears to be a fragile budget agreement holds up.

Democratic Gov. Mark Dayton and Republican legislative leaders emerged from a three-hour meeting to announce what Senate Majority Leader Amy Koch, R-Buffalo, called a "framework" of a deal.

"It's my understanding that we have an agreement," Dayton said, leading Koch and House Speaker Kurt Zellers, R-Maple Grove, out of his office.

The three wore gloomy faces, a stark contrast to what Capitol observers are used to when budget deals are cut.

Dayton and the two lawmakers did not say when the agreement could be firmed up or when a special legislative session would be called to ratify the two-year state budget. However, Dayton said it would happen within days.

Zellers and Koch said they have had enough contact with their members to expect plenty of votes to pass the budget plan.

Dayton moved a long budget impasse off center this morning when he announced that ending the state government shutdown is so important that he is willing to drop his long-held demand to increase taxes on Minnesota's top earners.

His announcement this morning at the University of Minnesota convinced Zellers and Koch to immediately agree to resume negotiations after less than two hours of talks since the shutdown began on July 1.

Dayton said he would accept a legislative Republican offer made on June 30, the day before state government shut down. But he tacked three of his own requirements onto the proposal: all policy issues would be stripped from budget bills, a GOP plan to cut the state workforce 15 percent would disappear and the Legislature must approve at least $500 million in public works construction.

Koch and Zellers said they accepted Dayton's proposal, but altered it. They did not say what they changed.

"The people of Minnesota won today," Dayton said, wearing a frown, adding that "no one is going to be happy with this."

Added Zellers: "No one of us got exactly all of what we wanted."

The basis of the June 30 GOP offer was increasing spending $1.4 billion in the next two years. Half would come from delaying state payments to schools, a tactic legislators and governors have used before. The other half of the new revenue would be borrowing against Minnesota's future payments from a lawsuit the state won against big tobacco companies.

In a letter to Zellers and Koch, Dayton said that if they accepted his offer, "my commissioners, staff and I are available to meet around the clock with you, your members and your staff to complete it."

Dayton said all nine remaining budget bills would have to be completed, and his commissions sign off on them, before he calls legislators back to work. Only a governor can call a special legislative session.

The session is needed because before the Legislature adjourned on May 23, only a bill funding agriculture programs was passed and signed. Dayton vetoed other Republican-written budget bills on May 24.

The argument has been about how much the state should spend. Dayton originally wanted to spend $37 billion in the next two years, but lowered that to $35.8 billion. Republicans said they would not spend more than $34 billion, the most in state history.

Dayton wanted to increase income taxes on the state's top earners to spend more money than Republicans wanted.