Mediation to end Minnesota budget dispute fizzles

The Minnesota Supreme Court earlier this month ordered the two branches of government to use a mediator to resolve a dispute over Governor Mark Dayton's veto of funding for the legislature in the fiscal 2018-19 biennial budget.

Richard Solum, a retired Minnesota judge who served as the mediator, said in a statement that after a day and a half of talks he concluded the two sides were at an impasse.

Dayton's veto in May touched off a legal battle with the legislature, which claimed the removal of nearly $130 million in funding from the budget was unconstitutional.

While a Ramsey County District Court judge sided with the legislature in July, the state Supreme Court on Sept. 8 determined that the governor's action was constitutional. However, the high court raised concerns over the ability of the legislature to continue to exist without funding.

Dayton on Friday reiterated his stance that his veto was aimed at pressuring Republicans to revise tax measures, which he said "will seriously jeopardize Minnesota government's future financial stability."

He added that mediation revealed the legislature has money available to operate until its new session begins in February.

“They owe the Minnesota Supreme Court and the people of Minnesota an honest explanation of why they have dragged all of us into their costly theatrics over the past four months,” Dayton said in a statement.

Republican legislative leaders issued a joint statement expressing disappointment that "Governor Dayton walked out and abruptly ended mediation today."

The demise of mediation returns the matter to the Supreme Court for a final ruling, according to Susan Closmore, a spokeswoman for House Republicans.

Dayton's veto raised credit concerns for the state by leaving $80.1 million of certificates of participation issued in 2014 for a Senate office facility without an appropriation for rental and debt payments next due in November and December.

After the district court judge ordered the state to temporarily fund the legislature until Oct. 1, S&P on June 30 affirmed Minnesota's AA-plus rating and removed it from a watch list for a potential downgrade.

(Reporting by Karen Pierog; Editing by Jonathan Oatis)