In Session's Final Push, Minnesota Budget Deal Still Elusive
ST. PAUL, Minn. (AP) — Minnesota's legislative session is moving into its final, frantic week with the full outline of a new state budget still a blur but some potential elements of an agreement coming into focus.
The few people in on private negotiations are saying almost nothing, but the Capitol has turned into its usual hothouse of rumors and compromise scenarios. The deal must be cut soon if lawmakers — flush with a nearly $1.9 billion surplus — want to avoid an overtime session and flirtation with a government shutdown.
Senate Finance Committee Chairman Richard Cohen, a Democrat in his 35th year, said he was having trouble visualizing how it might shake out.
"The pathway so far looks a little bit meandering," Cohen said.
Significant differences remain over tax cuts, school spending, subsidized health insurance for the poor and road, bridge and mass transit spending. There's a growing sense that lawmakers will approve a modest amount of public-works borrowing as part of a deal, something Republicans had balked at initially.
As House Speaker Kurt Daudt points out, many of the areas are linked. Resolving one can quickly remove several other knots.
Daudt conceded last week that his majority House Republicans won't get anywhere near the $2 billion in tax cuts they passed last month, and set the new bar around $1 billion.
"We understand that in negotiations and in compromise you don't always get everything you want," he said. "I hope the other side understands that as well."
The GOP was heartened by comments from Democratic Gov. Mark Dayton, who signaled openness to a $1,000 per person income tax exemption and a gradual move to exempt more Social Security income from taxes. But Dayton was critical of their business tax breaks that ramp up in years to come.
"I call it the old retailing 'bait and switch,'" Dayton told The Associated Press. "You put out the favorable item, in this case middle-income tax cuts, and then you switch that to eliminating the estate tax on millionaires and billionaires and then permanent business property tax relief that goes on and on after the middle-income tax cut falls away."
Democratic Senate Majority Leader Tom Bakk has tied tax cuts to a multi-billion dollar transportation plan. The Senate approved a new fuel sales tax to raise money for highway repairs, but House Republicans have stood firm against raising the gas tax.
One option circulating last week involved the sides agreeing to a GOP plan to divert existing sales taxes on auto parts, vehicle leases and car rentals to a new road fund, with a possible constitutional amendment put before voters to make that shift permanent. In addition, the per-gallon gas tax would be raised slightly if there were offsetting tax cuts elsewhere.
Senate Transportation Chairman Scott Dibble, a Democrat who supports a higher gas tax, wouldn't get into the speculation game.
"Everything right now is conjecture, posturing and leverage," he said.
Some transportation money could also be part of a public works package — known as a bonding bill — that is said to be in the works.
Freshman Republican Rep. Dave Baker is making the case to House leadership for a small, tailored bonding bill, and top lawmakers are listening. Baker himself wants money for a railroad bypass and an agricultural testing lab in his hometown of Willmar that has been hit hard by a deadly bird flu outbreak.
"If bonding is something that creates some sense of compromise and collaboration, it might be a good tool to use," Baker said. "What I'm hearing through the hallways is the option might be there."
Bonding bills require three-fifths majorities to pass, which would take buy-in from minority House Democrats and minority Senate Republicans.
Neither side is ready to budge yet on the biggest slice of the state's budget.
Bakk pegged House Republicans' health care budget — carving out more than $1 billion in cuts — as the biggest challenge to a timely finish. Chief among those cuts: abolishing MinnesotaCare, a subsidized health program for more than 90,000 low-income residents.
"We have rejected the idea that we'll meet you halfway," Bakk said Thursday. "There's a pretty big divide there that I'm not sure how we're going to bridge yet."
To top it off, the two parties can't agree on even the numbers that build up that budget. House Republicans are banking on a $300 million cut by weeding out ineligible enrollees from public health programs — a number Democrats have criticized as grossly inflated.
(© Copyright 2015 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)
