By Tim Pugmire

MPR News/90.1 FM

Minnesota lawmakers begin a new legislative session Tuesday with some lingering bad feelings between two of the Capitol’s key players.

DFL Gov. Mark Dayton and Republican House Speaker Kurt Daudt had a public falling out last month over a proposed special session to address rising health insurance costs, tax cuts and public construction projects.

Their failure to reach agreement on those generally popular issues was a troubling preview of the even tougher negotiations that lie ahead.

Asked about the implications, Dayton offered a bleak prediction for the 2017 regular session.

“A very difficult one. Very, very contentious. Very charged with the politics of 2018, people running for governor and wanting to stage confrontations to build their standing with their own party, and their visibility,” Dayton said.

Dayton isn’t seeking re-election. But Daudt and a few other legislators are mentioned as likely Republican candidates for governor in 2018.

Daudt, R-Zimmerman, described his relationship with Dayton as “damaged,” following their public squabbling over the failed special session. He also said it’s up to the governor to repair it.

“This is a relationship business,” Daudt said. “The governor is going to put forth an agenda, a budget that he’s going to want to get passed. He needs relationships in the Legislature to pass his agenda. There’s no other way to get it done. He can’t sign a bill that we don’t send him.”

Dayton tried to defuse the tensions by inviting Daudt over for a private lunch last week. The governor said they parted on very good terms.

“We have an important professional relationship, important responsibilities to our respective constituents as well as to all of the people of Minnesota, and I don’t foresee that that’s going to be a problem moving forward,” he said.

Dayton said he plans to introduce a bonding bill proposal this month that looks similar to the list of public constructions projects left unresolved last session. Daudt, however, said a bonding bill might not happen this year.

A new player at the negotiating table is Senate Majority Leader Paul Gazelka, R-Nisswa. Republicans won control of the Senate for the first time since 2011 and 2012. Gazelka, who was then part of a new class of Senators, says the approach will be different this time with a narrow one-seat advantage.

“That was the first time that Republicans had had the House and Senate in over 40 years,” Gazelka said. “There was some exuberance about how and what we thought we could get done.”

Gazelka says the emphasis in 2017 will be on health care changes, tax relief, transportation funding and a budget that slows the growth of government. He also wants to set a productive tone in working with the governor.

“We already know where, if we come in conflict with the governor, where we’re going to just never come to a solution,” he said. “So those things, we know we don’t have to keep fighting those battles. We know where we stand.”

Dayton’s budget proposal is due by Jan. 24. He’ll base his recommendations on the recent economic forecast that showed the state with a $1.4 billion surplus.

Dayton began his first term as governor in 2011 facing a $6 billion budget deficit. The memory of that year’s challenges is why Dayton has been urging budget caution. He stressed that he won’t accept Republican efforts to give back the entire surplus as tax cuts.

“We’ve again gone from chronic deficits to so far sustained surpluses, and that’s something I intend to protect,” the governor said.

Dayton said he’ll propose tax cuts similar to those lost when he vetoed last session’s tax bill due to a potentially expensive math error. Republicans are expected to go bigger on taxes, including an exemption on Social Security income.

House Minority Leader Melissa Hortman, DFL-Brooklyn Park, is also new to the leadership ranks. Hortman is urging Republicans to listen to Democrats more often and to pass bills early to avoid end-of-session chaos.