Budget talks break down

06/29/2005

Patricia Lopez,
Star Tribune
June 30, 2005

After a day and a half of intense negotiations, talks among top Republican and DFL leaders broke down late this morning, with House Speaker Steve Sviggum announcing that Minnesotans should brace themselves for a partial government shutdown starting Friday.

“Citizens, like legislators, have to prepare themselves mentally,” Sviggum said, after a nearly two-hour meeting with DFLers ended. “It’s not the right thing to do, it’s not a good thing to do, but you don’t want to be just shocked by what is going to happen tomorrow night, either.”

Talks ended when Gov. Tim Pawlenty insisted anew that DFlers choose from a list of “reforms” before he would agree to a budget deal.

Senate Majority Leader Dean Johnson, DFL-Willmar, said he and House Minority Leader Matt Entenza, DFL-St. Paul, were told they could select from a list that included initiative and referendum, a taxpayer’s bill of rights, a ban on school-year teacher strikes, a voucher-type plan that would allow at least some children to attend private schools with taxpayer money, unicameral legislature and the racino, among others.

Johnson said he and Entenza left the meeting to discuss privately “what meaningful reform is,” and to possibly come up with their own versions of reform.

Sviggum told reporters that Pawlenty’s insistence on systemic change was reasonable.

“Government has to be more than just how much more you can spend and how much you can tax,” he said.

DFLers made their last major concession on Tuesday, when they finally dropped their bid to increase income taxes on the state’s wealthiest 40,000 residents.

In return, they had asked that Republicans withdraw their proposal for a racino _ slots at Canterbury Park racetrack _ that is anathema to DFL leaders, who prefer to reserve gaming for Indian tribes.

On Wednesday, Johnson said Republicans were still pushing racino, “but they’re talking about it less.”

The two sides remain divided on some budgetary as well as policy issues. Johnson acknowledged that DFLers are continuing to hold out for a statewide business property tax increase, to match the $139 million in residential property tax increases that Pawlenty’s offer includes, as well as a $187 million tax loophole closure for foreign operating corporations. GOP leaders oppose both measures.

Republicans have largely conceded to DFLers on health care, agreeing to MinnesotaCare rolls at current levels and bumping the cap on outpatient benefits to $10,000 annually from $5,000, with exemptions for some chronic illnesses.

Senate DFLers were due to take up a “lights-on” bill that would continue government funding past June 30, when the current budget expires.

Sviggum has said he would not pass such a bill unless he had at least a “handshake” agreement on an overall 2006-07 budget deal. Without either a global deal or a lights-on bill, parts of state government will begin to shut down on Friday.