Q&A: Dayton previews state budget forecast

A new state budget forecast will be released late Wednesday morning and the report could change the dynamics at the State Capitol for the remainder of the legislative session. The forecast comes just as Gov. Mark Dayton nears decision time on several bills wending their way toward his desk.

Dayton discussed the budget and pending legislation with MPR's Cathy Wurzer Wednesday morning. An edited transcript of their extended interview is below.

Cathy Wurzer: I'm assuming you've been briefed already on the state budget forecast. What's your expectation this time around?

Gov. Mark Dayton: Well, actually I don't get briefed until 8:30 this morning. This is a tight-lipped ship, and ... by statutes and custom, no one knows until the morning dawns, and so I'll find out early this morning, and I'll have to comment on it later on. But your guess is as good as mine, probably better.

Wurzer: The forecast from late last year showed a surprising short-term surplus. If the forecast shows another surplus, maybe a bigger surplus, what should be done with the money?

Dayton: Well, according to state law ... the next $5 million of additional surplus would go into capping off the reserve fund. And then the next $2.7 billion goes to pay off the school shift from last summer and from the previous biennium. So we're not going to have any money to spend on anything else for quite some time.

Wurzer: And a deficit, how might that change the dynamics at the Capitol?

Dayton: Well we really have $876 million in both the cash account and the reserve fund — that's the surplus that was reported last time. So if the forecast now is less optimistic than the one previous, we would dip into the reserve fund to cover that, unless it's greater than $876 million, which I seriously doubt. But it would be, you know, an ominous sign that things aren't improving as much as we'd hoped and that we have a financially precarious future ahead of us.

CRITICAL OF TEACHER LAYOFF BILL

Wurzer: Let me ask you about some bills that are making their way to your desk. Let's start first with a bill that makes some significant changes to the seniority system for Minnesota teachers. It's heading to a conference committee. As a former teacher, should changes be made to the seniority system?

Dayton: Well, I think changes should be made, but the question is when and what to replace it with. And last year, in a bipartisan way, we passed a teacher evaluation and a principal evaluation law, and that's going to be put into effect starting next year with the training of the principals and others to do the evaluations and in the following school year, the actual evaluations themselves.

And this ... bill that was passed envisions starting the layoff procedures based on evaluations in the 2015 and '16 school year. And so I'd have to ask why now, before the formulation of the evaluation system is even complete. There's a mixed record in other states in terms of the quality of that evaluation. I think we'll know a lot more in a couple of years, and then we can make an intelligent decision (on) exactly how to structure some alternative, but right now it looks to me, frankly, more like an election ploy than serious legislation.

Wurzer: Sounds like you will not sign the bill when it gets to your desk then

Dayton: Well, I'll still have some more conversations before I make that final decision, but I think your read of my current view is probably pretty correct.

CASTLE DOCTRINE

Wurzer: Let's talk about the so-called Castle Doctrine bill that's expected to pass the House soon and be on its way to your desk. Now this expands the circumstances under which people can use deadly force if they believe that they're threatened. And I know you've talked with the bill's sponsor. As a gun owner yourself, will you sign that bill?

Dayton: Well, again, I did meet with Rep. [Tony] Cornish, the sponsor in the House, yesterday. We had a very cordial and constructive conversation, and I'd earlier promised him that I would not make a final decision on that legislation until the full three days after it reaches my desk. So I intend to honor that.

But I have said that I will consider very carefully the views of Minnesota police and peace officers, the police chiefs, and the sheriffs, and the county attorneys, all of whom strongly oppose the legislation. And the peace officers, in particular, who put their lives on the line every day and night and on our behalf, you know they're the ones who have to walk into those houses or other buildings and become possibly the targets under a looser law. I don't want to have to go any funerals of police officers or law enforcement who have made that sacrifice because of these provisions.

Wurzer: Is there a need for changes in this law?

Dayton: Well, that's a good question ... Proponents of the law say that there are, and others dispute that. So it's really in the eyes of the beholder.

PHOTO ID COMPROMISE

Wurzer: It looks like a compromise may have emerged on photo ID. You vetoed the bill last year that required a photo ID when voting, and lawmakers are talking about asking voters this fall to pass the requirement as a constitutional amendment, but this compromise floating around is centered around something called the electronic poll book. What's your opinion on such a compromise around this issue?

Dayton: Well, I hope we can reach a compromise. I vetoed the bill last year because it was just a strictly partisan vote, and I used the same language that Gov. [Tim] Pawlenty had used two years before when he vetoed a bill that came out of the DFL Legislature that any change in election law needs to be broadly bipartisan, otherwise whichever party is controlling the Legislature, controls both the bodies, can pass something that's to their own advantage and to the detriment of the other. So I thought it was a very sound principle that Gov. Pawlenty had established, and I repeated it.

And one of the principal reasons that a constitutional amendment is being considered is [because] I have no say in that. The Legislature acts and then it goes directly on the ballot. So this is a much better outcome, just from the fact that it's, as you said, a compromise. And Secretary of State Mark Ritchie is really the expert among the constitutional officers in terms of election laws and conducting elections, and so I'm prepared to follow his lead, but I hope they can work something out.

Wurzer: Do you hold out hope that there might be a compromise, instead of having this issue go to a constitutional amendment?

Dayton: I certainly hope so. I mean all this talk about I don't know how many constitutional amendments, four anywhere to six, I've heard. And you know that's just not the way to legislate. It's the responsibility of the legislative branch to work with the executive branch. That's our system of government. The governors or presidents can veto legislation. Legislatures can override it, but the founders of our country and our state intended that the executive and legislative branches would have to work together, even if they're of different political views.

VIKINGS STADIUM

Wurzer: I have to ask you about the Vikings stadium. We have a report this morning from [MPR reporter] Tim Nelson that basically says counting on gambling revenues can be kind of risky and sometimes the revenues raised don't meet projections. What happens if, say, electronic pull tabs, which you support to raise the state's share of a new Vikings stadium, don't bring in enough money?

Dayton: Well, we're going to have to commit revenues from whatever sources that are greater than the actual amount to pay off the bonds. If there's, say, $300 [million] to $400 million of bonds issued, that would take about $40 million a year in proceeds to pay it off ... So the people who are going to buy the bonds are going to require that the revenue stream be more than $40 million, as much as $60 [million], maybe even as much as $70 million.

So we'll have to allow for a shortfall as part of the equation, and we're prepared to do that. It may require another source in addition to expanding electronic pull tabs, because as you say, no one knows for sure until it starts exactly what revenues it will bring in. But we'll have to cover it in order to proceed with the bond sale.

Wurzer: Any idea of where another pot of money could come from?

Dayton: There are various possibilities being talked about, but I don't have anything in mind right now.

Wurzer: Do you have any ideas yourself?

Dayton: Well, I'd like to see, I have a couple ideas, but the negotiations are delicate enough right now that I'm going to let it ride for the time being.

Wurzer: I'm going to ask you about that, because during the State of the State address, you talked about a deal being done soon, but that was nearly three weeks ago. What's the holdup?

Dayton: Well, the city of Minneapolis and the Vikings are in very intensive negotiations. My excellent chief of staff Tina Smith is involved in them as well. They worked all day and into the night yesterday, and they're at it again first thing this morning. You know I'm hopeful that we'll have something soon to report, but it isn't there yet.

(Interview edited and transcribed by MPR reporter Madeleine Baran)

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