Gov. Walz, Legislative Leaders Miss Deadline For Budget Targets

ST. PAUL, Minn. (AP) — Democratic Gov. Tim Walz and top leaders of the Minnesota House and Senate missed a self-imposed deadline for setting overall budget targets to guide negotiations for ending the legislative session.

The talks broke off late Monday without agreement after Democrats and Republicans started the day about $2 billion apart. Walz said he offered to cut $200 million in spending from his original proposal, and leaders of the House Democratic majority said they were willing to cut $664 million from their own, higher spending proposals to move toward the governor's figure. But they said Republicans who control the Senate were unwilling to raise their offer at all.

Senate Republicans did offer to shift money around within their budget proposal to spend more on education and less on health and human services. But the governor stuck to his proposals for transportation and other programs, which include a 20-cent increase in the state's gas tax and preserving a 2% tax on health care providers that Republicans want to let expire as scheduled at year's end.

Walz said his budget was based on what the state needs to spend to maintain quality education and other programs at a time when the state's population is growing, and he'd like to see some reciprocity from Republicans.

"We do have a philosophical difference. Is it about how we do the budgets for outcomes or is it about just coming up with an arbitrary number?" the governor said in an interview Tuesday on Minnesota Public Radio.

Conference committees resumed Tuesday to try to resolve differences between the budget bills that have passed both chambers, but without the benefit of the overall spending targets that the governor and House and Senate leaders had hoped to set Monday.

"It's disappointing that Senate Republicans offered $0 in movement in return," Democratic House Speaker Melissa Hortman said in a statement. "It's critically important for us to continue negotiating and agree to targets so we provide conference committees enough time to complete their work in public and end the legislative session on time, but we need the Senate to get serious about compromise."

Republican Senate Majority Leader Paul Gazelka said during a break in the talks Monday that the GOP budget plan provided for a $2 billion increase in spending without raising taxes, and reiterated that a gas tax increase "isn't going to happen."

Both sides still have nearly two weeks to complete their work and produce a balanced budget before the May 20 adjournment deadline.

"I'm still optimistic, I'm hopeful. It is only the 7th," Walz told MPR.

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