ST. PAUL, Minn. - Gov. Mark Dayton and Republican legislative leaders have abandoned mediation in their months-long legal battle.

Top legislative Republicans and the Democratic governor met for closed-door sessions starting on Thursday. The Supreme Court-ordered mediation stems from the case surrounding Dayton's decision to zero out operating budgets for the House and Senate.

Dayton wanted to slim down tax breaks and remove other measures from budget bills he signed this spring. But Republicans sued, calling his action unconstitutional.

But the two sides couldn't bridge their differences and ended mediation Friday afternoon after Republicans say Dayton walked out.

Gazelka hopes the Supreme Court will look at the case again and permanently restore its budget. If not, the Legislature may have to lay off some staff.

Below is Gov. Dayton's statement on the matter:

“I thank our Mediator, former Judge Rick Solum, for his concerted efforts over the past two days to help the Legislature and our Administration negotiate a settlement of the issues that have divided us. For the past four months, I have advocated for just such a negotiated agreement.

“I have said repeatedly that my reason for exercising my Constitutional line-item veto of some of the Legislature's biennial appropriation was to require them to revise their 2017 tax bill, which I believe will seriously jeopardize Minnesota government's future financial stability. Republican legislative leaders have said repeatedly that the reason for their lawsuit was to provide them with sufficient funds to operate in this biennium.

“I was not surprised by the intransigence of Republican legislative leaders during this attempted mediation. But the reason for their intransigence was a surprise. They have now revealed that they already have more than enough money to operate both the House and the Senate at their projected levels
ofspending, until they reconvene in Session next February.

“Their cash surplus contradicts the high drama they have been manufacturing during the past four months. Just today one of their members asserted, ‘...the governor used his line-item veto power to eliminate funding for the Legislature, effectively abolishing the legislative branch.’

“Their current cash position also contradicts the assertions made in their filing with the Minnesota Supreme Court this past week. It stated, ‘Assuming the House and Senate spend as anticipated through October 1, 2017, and only begin using their carryforward funds thereafter, the anticipated date carryforward funds will be exhausted is as follows: House: After payment of payroll on February 1, 2018. Senate: After payment of payroll on December 1, 2017.’

“However, this statement fails to disclose what the Republican legislative leaders have known – or should have known – for some time. In addition to their carry-forward funds, they have stated they will use the Legislative Coordinating Commission's biennial carry-forward monies of over $3.6 million and appropriation of over $35 million to completely fund their expected operating expenses until they return to Session next year. They admit their Legislative Counsel has advised them that they can do so.

“Republican leaders have claimed repeatedly that they had to file their lawsuit and cost taxpayers several hundred thousand dollars in legal fees, to prevent the Legislature from being ‘abolished’ by my vetoes depriving them of operating funds. Now, after the Court forced their financial disclosure, we learn their claim is untrue.

“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.”