Legislators merely mark time

05/22/2005

Dane Smith and Patricia Lopez, Star Tribune
May 22, 2005

Too far behind to finish their work on time, deadlocked on major issues and bound for an overtime special session, the Minnesota Legislature limped through a quiet Saturday taking care of minor business.

Gov. Tim Pawlenty and legislative leaders appear to be resigned to marking time through the midnight Monday deadline to wrap up the regular session, and one caucus leader acknowledged that legislators are mostly going through the motions.

“Are we doing anything of substance? No,” Senate Minority Leader Dick Day, R-Owatonna, said Saturday. “Is it totally window dressing? Definitely.”

The House and Senate each met for a few hours, but still lack final agreement on eight major spending bills and a tax bill. The chambers took up minor measures Saturday, such as the legalization of Texas Hold’Em poker tournaments and airport taxi policies.

Pawlenty’s unexpected budget offer on Friday—a cigarette “health impact fee” of 75 cents per pack at the wholesale level --appeared not to have produced a dramatic turn.

The DFL Senate majority wants to spend about $1.4 billion more than Pawlenty and the Republican House majority have proposed.

The Senate has approved a tax bill with a major new income tax on top-bracket earners. Pawlenty’s cigarette fee proposal would raise about $380 million.

Although DFLers expressed interest in the plan, Pawlenty and Senate Majority Leader Dean Johnson did not even meet on Saturday, though each professed their willingness to do so “24-7.”

Frustrated, disappointed

“This is the time of the season to compromise,” Johnson said. “Compromise is a good thing. ... I’m telling our conference committee members to make concessions.”

However, Pawlenty’s spokesman, Brian McClung, said Johnson did not show up to meet in the governor’s office to discuss the tobacco revenue proposal, despite indications that he would. No appointment is likely with Johnson until Monday.

“This was an offer that should have allowed us to button up the session,” McClung said. “We’re frustrated and disappointed.”

But there actually are bipartisan problems with the proposal in both the House and Senate. House Ways and Means Chairman Jim Knoblach, DFL-St. Cloud, on his way into a meeting with the governor’s staff and other GOP leaders, said some Republicans are struggling with Pawlenty’s newest proposal.

“Certainly some in our caucus have questions about it,” he said. “And for many it’s hard to distinguish the difference between a gas tax and a cigarette fee.” Conservative interest groups and some Republican members have strongly criticized the proposal.

Earlier in the week some House Republicans crossed over and joined DFLers in voting for a 10-cent-per-gallon gasoline tax increase, citing the need for additional transportation money. Pawlenty vetoed that bill Friday.

House Taxes Chairman Phil Krinkie had no immediate plans to hear the governor’s fee plan in the taxes conference committee.

Accounting shifts?

Along with the cigarette fee, there was an undercurrent of talk on Saturday about the possibility of additional accounting shifts to help close the spending gap between DFLers and Republicans.

Although Pawlenty, in a private leadership meeting on Saturday morning, said there were to be no more shifts, the lure of additional nontax money may prove too hard to resist.

Because the Legislature restored $268 million in education shifts with revenue projected in the November and February forecasts, that shift theoretically is available to be used again. Accounting shifts take money scheduled to be paid out by the state in one budget year and “shift” it into the next budget year, allowing a temporary saving of that money.

The bond houses that issue state credit ratings typically frown when shifts and other accounting gimmicks get out of hand. Minnesota already has about $1 billion in shifts on its books, courtesy of several years of red ink.

But whether an additional $280 million shift in a $30 billion-plus budget would make an important difference is anybody’s guess.

Charlie Weaver, executive director of the Minnesota Business Partnership and Pawlenty’s former chief of staff, said such shifts, coupled with the cigarette fee, could give everyone enough money to leverage a classic “win-win.”

“Democrats could come out of here with victories on minimum wage, ethanol, a 9 percent increase in K-12 and enough money for health and human services to avoid some of the cuts,” Weaver said. “That’s a very successful session, given that we started out with a $466 million projected deficit.”

Republicans, he said, could claim many of the same victories plus bragging rights to having held off the Senate’s proposed income tax increase and other tax increases that they say might have hurt the state’s competitive ability.

“I’m not sure the Senate knows how to win,” Weaver said. “There’s no real reason to drag this out. They’ve already gotten some big concessions.” Pawlenty, he noted, will have lost on one of his premier proposals—a state-tribal casino that was supposed to have netted $200 million—and took a “huge political risk” with the cigarette fee.

McClung said Pawlenty “is prepared to call a special session, since it’s virtually impossible to conclude by midnight on Monday.”