Pawlenty vetoes state budget bill as session erodes

Gov. Tim Pawlenty vetoed the state budget bill Tuesday, as the showdown between the DFL-controlled Legislature and the Republican governor continues.

His letter accompanying the veto wasn't immediately available. The veto won't be official until the letter is delivered to the House. Lawmakers have less than a week left to solve a $3 billion deficit.

If the confrontation between Gov. Pawlenty and Democrats who control the Legislature appears familiar -- you're right. In three of the past four years, Democrats have proposed raising income taxes of the state's top earners, and each time the governor has blocked the bill.

The latest proposal would create a new income tax bracket for couples earning more than $200,000 a year. Pawlenty issued a statement comparing the tax plan to Jason, the hockey mask-wearing slasher in the "Friday the 13th" movies. He said the "scary" tax increases "keep coming back."

EMMER: BUDGET COULD BE CUT BY A THIRD

The Republican who hopes to replace Pawlenty -- Rep. Tom Emmer of Delano -- also chided Democrats for proposing higher income taxes and for not cutting spending enough.

"All we do is we cut programs. We don't do anything with the structural size of government," Emmer said. "You refuse to make any decisions about what our priorities are and how we're going to properly fund the priorities. The structure remains intact."

Emmer, the Republican endorsed candidate for governor, has said he thinks the state's budget could be reduced by a third.

While Republicans focus on the tax hikes in the legislation, Democrats are focusing on the spending cuts. They say the tax hike represents 13 percent of the plan to solve the nearly $3 billion budget deficit. The rest comes from a school payment shift and spending cuts.

House Speaker Margaret Anderson Kelliher said the plan "more than meets the governor but does not compromise Minnesota's most important priorities," including children and schools and nursing home residents and their caregivers.

Rep. Ryan Winkler, DFL-Golden Valley, criticized Emmer and his Republican colleagues for talking about spending cuts but dodging the tough votes to actually do it.

"You talk about making a difference in the long run, but when it comes time to make hard decisions, all we get are empty speeches about leadership and choices," Winkler said. "The fact is that being a leader, being in charge [and] trying to get the job done ... requires hard choices."

The House voted 71-63 for the budget balancing bill. That action came after the Senate narrowly passed the measure 34-33. The legislation comes less than a week after the Minnesota Supreme Court ruled that Pawlenty overstepped his authority when he unilaterally cut spending last July. The decision left the state with a bigger budget problem and left Pawlenty and lawmakers scrambling to find a solution.

But the pathway out of the budget wilderness isn't exactly clear.

Sen. Rick Olseen, DFL-Harris, was one of 12 Democrats in the Senate who voted against the bill. He didn't think the tax increase was the best option, especially so late in the legislative session. But Olseen also said he doesn't know if there's consensus on what happens next.

"I think we'll have to have a plan B that will bring forward cuts," Olseen said. "The whole thing boils down to whether the House has the ability to override the governor's veto."

GOP SAYS OVERRIDE WILL BE DOA

And that is unlikely. House Democrats pushed for a vote on Monday so there's enough time to attempt a veto override. But the House and Senate votes on the bill fell far short of the needed two-thirds to override. Republican House Minority Leader Kurt Zellers said there's no chance Democrats will get to 90 votes to override a veto.

"This is a four-day old reheated hot dish," Zellers said. "It doesn't get any better the more you reheat it. It gets worse. This is absolutely the same version of the old plan on a different day."

If a veto override fails, DFL Senate Majority Leader Larry Pogemiller said Republicans should be prepared to vote for a bill that includes deeper spending cuts. The House and Senate already soundly rejected the governor's plan to cut spending. Pogemiller said if Gov. Pawlenty is committed to spending cuts, he needs to come forward with an alternative that doesn't rely on a $1.7 billion payment delay to schools.

"He has made no courageous decisions yet. His courageous decision is to kick 75 percent of the problem to the next governor," Pogemiller said. "No, this is different than it was before that court decision. He says he's got the strength to govern. Now it's time to get the strength to get that level of cuts through the Legislature. If that's what he believes is right."

Kelliher told reporters Tuesday that she's not sure Republicans want to balance the budget. Still, Kelliher said she's open to Republican budget ideas.

"They certainly are in a place where they have a very strong hand right now," she said. "If they came forward and said we're interested in some form of revenue, we would probably be interested in talking to them."

Now that Pawlenty has made it clear that he won't agree to a tax increase and lawmakers have made it clear they don't support Pawlenty's cuts, the two sides will either have to find something they can agree on or end the session without a deal.

Pawlenty has left open the possibility of a special session. If he doesn't call lawmakers back, the budget deficit will be the next governor's problem, and that means it will be much harder to solve, since the governor will have much less time to fix it before the biennium ends.

(The Associated Press and MPR's Elizabeth Dunbar and Tim Pugmire contributed to this report.)

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