Minn. budget debate becomes more pointed

The Republican-controlled Minnesota House and Senate began passing a series of finance bills Monday that would erase a $5 billion state budget deficit without raising taxes.

GOP leaders plan to complete action on their bills by the end of the week, but most of them appear headed toward vetoes from DFL Gov. Mark Dayton.

Senate Republicans were moving quickly through the State Capitol hallways before the start of their scheduled debate of two budget bills. In fact, GOP leaders have been moving quickly for weeks trying to deliver a budget plan far ahead of the traditional schedule.

"We're excited to have an opportunity like this, where we're actually crafting the budget for the first time for us in 38 years," said Senate Majority Leader Amy Koch, R-Buffalo.

But the GOP budget bills run counter to Gov. Dayton's budget plans, and the early timetable for passing bills appears to be designed to accommodate a second batch of bills before the Legislature's scheduled adjournment on May 23. Koch said she wants to work with the governor.

"There's certainly many more stages before we get to presenting the governor with the budget," she said. "We're focused right now on these budgets, and then the conference committees will follow -- and the discussions with the governor will fully begin in more expanded discussions."

Koch later received a letter from Dayton, who suggested the budget discussions might be getting more challenging. The governor wrote that he won't even start negotiating until the House and Senate agree to a single, comprehensive budget proposal.

Dayton also scolded House Republicans for disregarding nonpartisan financial assessments of their budget bills, and he warned that he won't sign any budget bills that are also loaded up with "extraneous" policy items.

Senate Minority Leader Tom Bakk, DFL-Cook said he was glad Dayton laid out some parameters, but he's not sure where Republicans are headed.

"You hear a lot about them just passing these bills to the governor destined for a certain veto, like somehow they have to assure their base that they can actually do an all-cuts budget," said Bakk. "I guess we're going to find out what their plans are here in the next few days. We'll see if these bills go to conference committee."

House Majority Leader Matt Dean, R-Dellwood, said he was concerned by the tone of Dayton's letter, and described it as a step backward.

Dean said by the end of the week, Minnesotans will see a Republican budget that is a stark contrast to the governor's plan -- which includes an income tax increase on the state's top earners.

"We're going to take that debate between two plans that are very different, and bring it to the people and say, 'Which one do you like better? Where do you think we ought to move from here?' And that's what the next two months is all about," said Dean.

The biggest budget battle of the day was waged in the House over a tax bill that includes modest income tax reductions, a cut in statewide property taxes on businesses, and a phaseout of Local Government Aid for Minneapolis, St. Paul and Duluth.

Rep. Jenifer Loon, R-Eden Prairie, said that phaseout is unavoidable.

"If you're going to make some reductions in government programs, you need to go where the money is, and that [LGA] is where a lot of this money is going," said Loon. "There's going to have to be some changes to the formula in order to bring a balanced budget, which I think is what most Minnesotans expect us to do."

But several Democrats, including Rep. Paul Marquart of Dilworth, argued the bill would drive up local property taxes and damage an important program.

"The program that not only keeps property taxes down, but funds important services that allow our seniors to stay in their homes, allow people to get to work after a six-inch snow storm, makes sure there are emergency personnel at your door when you need them. That's what this does. It funds people," said Marquart.

House members were set to work into the night on a transportation funding bill. The Senate passed an agriculture bill and a jobs and economic development bill.

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