Some movement in budget crisis

06/28/2005

Dane Smith,
Star Tribune
June 29, 2005


A full morning of top-level budget negotiations at the Governor’s Residence, following five hours of talks Monday night, produced some movement today and a little more optimism that an extended partial shutdown of state government services can be averted.

Republican House Speaker Steve Sviggum said he and Gov. Tim Pawlenty offered substantial concessions to preserve health coverage subsidies under the Minnesota Care program for lower wage workers. DFL Sentate Majority Leader Dean Johnson described the meeting as “constructive” and he urged folks who are planning to visit state parks this weekend “to continue to make those plans.”

Sviggum said Republicans had reached beyond the midway point between original Republican and DFL bottom lines for taxes and spending. “We’ve put everything we can on the table, we’re trying every which way to get this done.”

A multitutde of differences remain on how much each side wants to spend and on the sources of their revenue. DFLers are seeking to spend about $900 million more than Republicans, mostly on health-care and education programs and aid to local governments to hold down property taxes. The total state biennial budget stands at about $30 billion, so the differences amount to about 3 percent of the total.

One of the biggest obstacles is on the revenue side. Republicans have proposed an expansion of legalized gambling at Canterbury Park that would bring in about $220 million a biennium. Johnson said that widespread oppostion by conservative and liberal interest groups, as well as by mainstream church groups, makes the so-called “racino” proposal “problematic.” Sviggum said that interest group opposition should be weighed against the fact that most polls show a majority of Minnesotans favor gambling expansion to address the state’s budget shortage.

DFLers continue to press for an income tax increase for the highest-income citizensbut Sviggum and Pawlenty have emphatically pronounced that option unacceptable. They say it will dampen job creation because many households in the top bracket are actually small to mid-sized busineses.

Both sides seem to be in agreement on an increase in tobacco revenue from a 75 cent a pack increase at the wholesale level. That provision would raise almost $400 million.

The Senate was scheduled to convene at noon. Johnson said he expected that the Senate would pass a stopgap bill that would retain funding at current levels for three state departments, including the Department of Natural Resources. If approved by the House and signed by the governor, the “lights on” provision would allow state parks to stay open when the budget period ends on Thursday.