ST. PAUL-Minnesota's three top political leaders walked out to talk to reporters, wearing big smiles and delivering an occasional laugh.

However, it did not take reporters long Friday to figure out that Gov. Mark Dayton, Senate Majority Leader Tom Bakk and House Speaker Kurt Daudt had made little progress toward calling a special legislative session to pass a tax bill and fund public works projects.

With Daudt standing next to him, Dayton called House Republicans "short sighted" in refusing to fund a light rail project in the southwest Twin Cities, as well as other transit projects. The state always has balanced funding rural roads with paying for Twin Cities transit needs, Dayton said.

Daudt said that spending on light rail is not a good idea, in part because two lawsuits are pending that could stop the project.

The speaker summed up the stalemate: "In the House, we don't have the votes for southwest light rail. In the Senate, Sen. Bakk is telling me that they don't have the votes to pass the bills without light rail."

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So the three decided to discuss some options Bakk presented, such as giving Twin Cities counties authority to fund light rail, and will return on Thursday to further discuss a special session.

Asked if Thursday was the last day they could reach a deal, Dayton responded: "We'll see."

Last month, the three said they expected a special session to be called next week. Dayton has said that time is running out for a special session, given fall activities such as campaigns that would hinder policy work.

A tax bill Dayton vetoed because of a multimillion error has broad legislative support, once fixed. It would cut taxes for a variety of Minnesotans, including farmers who think their land is overtaxed for building new school facilities.

The other bill that failed to get into law when the Legislature adjourned its regular session nearly three months ago would fund public works projects ranging from road work to repairing state buildings.

Dayton said the trio agreed in their meeting to borrow $995 million, to be repaid by general tax dollars, for most projects. Transportation borrowing would be on top of that, funded by sources like the fuel tax.

The three said no projects contained in a public works bill that failed in the final minutes of the legislative session have been removed. Dayton said that some projects may be added, but two key figures not at Friday's meeting must agree first: House and Senate minority leaders.

Daudt said that he thinks the executive branch will figure out a way to build the light rail project without legislative approval.

He said that if light rail was going to be built regardless of lawmakers' wishes, it would be poor governing to stop the tax and public works bills.

It was not clear if the speaker's opinion would change House Republicans' strong opposition to the project.

Bakk and Daudt said they have not talked to Dayton about whether he could call them back into session to pass the tax bill even if they failed to agree on public works spending.