Good morning, and welcome to Wednesday. It’s good to be back. Let’s check the Digest.

1.Gov. Mark Dayton on Tuesday agreed to legislation to completely fund Minnesota state agencies the next two years, resisting calls from political allies to torpedo major spending pieces, heading off a potential government shutdown. The new $46 billion two-year budget will take effect in July. It was passed during a special session last week that piggybacked on a regular session because lawmakers and Dayton couldn’t finish the job on time. Dayton had initially said he would allow a tax relief package to become law without his signature, but ended up signing it because of legal uncertainty over the process. He chastised Republican lawmakers for adding what he called a “poison pill” provision to the bill that would have eliminated all Minnesota Department of Revenue funding if it were killed, a move the governor described as a “reprehensible sneak attack.”In response, Dayton eliminated spending for the House and Senate. (MPR News)

2. Dayton used his line-item veto power to cut $65 million that funds the House and Senate over the next two years. He wants to use the move as a stick to get Republican legislative leaders to come back to St. Paul to negotiate some of the items he still objects to in the tax bill and budget bills. "I'm following the letter of the constitution, which says I can line-item veto any appropriation and doesn't distinguish between Legislature and courts or the executive branch. I'm quite confident the Constitution gives me the authority," Dayton said. Legislative leaders are not so sure - and may sue over the veto. "This is unprecedented. This clearly is a separation of powers issue. We don't think he has the authority to do it but we don't know what our next step is," said Senate Majority Leader Paul Gazelka, R-Nisswa.(Pioneer Press)

3.More than a dozen members of the Minnesota House sent a letter Tuesday to Olga Viso, director of Walker Art Center, expressing their disappointment and frustration that she did not consult the Dakota American Indian community before the "Scaffold" sculpture was installed in the revamped Minneapolis Sculpture Garden. In addition, Dakota elders met Tuesday night to talk about a unified response to the sculpture before a meeting Wednesday morning between the elders, thesculptor and officials of the Walker and the Minneapolis Park Board. (Star Tribune)

4.The Minnesota Court of Appeals on Tuesday upheld a 2015 law giving counties more power to use private firms for financial reviews rather than rely on the state auditor. The 2-1 decision turns back a challenge by State Auditor Rebecca Otto. The third-term DFLer contended the law allowing counties to choose who does the routine audits is flawed in its intent and the way it was passed. The appeals panel ruled the law to be constitutional. The two majority judges wrote that the auditor retains the power to set standards for and review any private audit so core duties were not stripped from the office’s control. Otto vowed to appeal to the Minnesota Supreme Court. “As the current steward of this constitutional office, I must do what is right, not politically expedient, and therefore, I will be asking the Minnesota Supreme Court to settle this issue,” Otto said. (MPR News)

5.A former Minneapolis nonprofit executive sentenced to four years in federal prison for a fraud scheme is appealing. Bill Davis was sentenced earlier this month to time behind bars and ordered to pay restitution for stealing from the now-defunct Community Action of Minneapolis nonprofit that received public grants to help low-income people. Davis had run the organization for decades and admitted using money on exotic trips and other personal perks. In court filings made public Tuesday, Davis asked the U.S. Court of Appeals to review the judgment against him, which also requires him to pay restitution of nearly $400,000. (MPR News)