Dayton vetoes bill that would pay back portion of K12 shift

Governor Dayton has vetoed a bill that would have used a portion of the state’s budget reserves to start paying back delayed state payments to schools. The Republican controlled Legislature sent Dayton the bill that would have tapped $430 million from the state’s budget reserve to pay back a portion of the delay. Republican leaders said they wanted to put a priority on paying back the schools. But Dayton said today using that money could have forced the state to borrow to pay its bills.

“As elected officials we are responsible for the wise financial management of our state,” Dayton said. “Our first priority should be assuring state government’s financial stability. This bill would significantly increase that risk.”

Finance officials said the state is already facing cash flow problems this fall and that taking $430 million from the reserves would have made the problem worse.

Republicans say they’re disappointed with Dayton’s veto. They said the state managed to pay its bills in the past with a budget reserve that is much smaller than the current one.

Sen. Julianne Ortman, R-Chanhassen, said Dayton’s veto signals a deep divide over taxes and spending between the Democratic governor and the Republican-controlled Legislature.

“He’s got an approach that is tax and spend and borrow,” Ortman said. “In this year, he still wants to raise taxes, he wants to spend more with a supplemental budget and he wants to borrow more with a great, big fat bonding bill and he doesn’t want to pay back the borrowing from last year That is a very stark contrast from where we are at now.”

Dayton and the Legislature agreed last July to delay more than $2 billion in payments to schools and borrow $700 million in future tobacco payments to balance the budget.

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