Income tax hike - with property tax lure - heads gov's way

(AP)- For the first time in his four-plus years in charge, Gov. Tim Pawlenty will get to act on a bill raising the state income tax. He's not leaving any mystery about his intention to veto it.

The House voted 73-58 on Friday to send the Republican governor a bill that creates a new 9 percent income tax rate on top earners. The money it raises - about $452 million in the next two years - would pay for homeowner property tax breaks.

The state would take over some school levies and homeowners could also see refund checks depending on the amount of property taxes they pay in relation to their income.

The new fourth tier of the income tax would apply to taxable income above $400,000 for married couples and $226,000 for single filers.

Friday's vote coincided with the release of a Minnesota Public Radio News poll that found 72 percent of likely voters favor taxing wealthy incomes at a higher rate to lower property taxes. The poll of 625 likely voters, which also found Pawlenty with a 55 percent approval rating, was taken this week and has a margin of sampling error of plus or minus 4 percentage points.

Despite the expected veto, Democrats said they wanted to send a message to Pawlenty and Minnesotans that property tax relief is a top priority. They said nine in 10 homeowners would benefit while only 1 percent of taxpayers would see their income taxes rise.

"This is a good bill, and 99.9 percent of you on the other side know it is," said Rep. Tom Rukavina, DFL-Virginia. "Why don't you have the intestinal fortitude today to stand up to your governor and say `Governor, do what's right."'

Republican legislators argued that Democrats were offering false hope to homeowners by passing a plan that won't become law.

"If it is truly a priority of this Legislature then let's find a way to do it within the $2.2 billion surplus," said Rep. Paul Kohls, R-Victoria. "You don't need to raise taxes on one group of people to provide tax relief."

The Senate vote Thursday was also well short of the two-thirds strength that would be needed to override the promised veto.