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The tough legislative work about to begin

ST. PAUL - The pre-season, if you will, is about over for Minnesota legislators.

When they return to work Tuesday, after more than a week off for Easter and Passover, the final preliminary work begins to wrap up. Then the real job starts in about three weeks.

Lawmakers can expect what has been an easy session to change as hard decisions must be made in coming weeks:

-- Is a 9.8 percent increase in the state budget, as Republican Gov. Tim Pawlenty proposes, enough? Or should it rise 18.7 percent, as Senate Republicans figure Senate Democrats want?

-- Should income taxes rise? If so, how much? If not, how should priorities such as property tax relief be funded?

-- Should education receive a major boost in funding? If so, from where would the money come? If not, where could money be found to fill a special education funding gap and to offer more early-childhood programs?

-- Should voters be asked raise the sales tax and dedicate part of it to outdoors, clean water and arts programs?

-- Should health care reform wait until next year? Or should it be pushed to the front burner in 2007?

-- Should fuel taxes rise to build and fix roads? Or should the state borrow money?

As usual, showdowns mostly will be about money.

The big question is whether to raise taxes. Pawlenty thinks he has settled the matter.

"If they want to send me bills to test the veto option and the override option, I just respectfully request that they do that soon," the governor said.

Democrats, who control both chambers, want to raise income taxes so they can lower property taxes.

"How's the governor going to veto property tax relief?" Sen. Yvonne Prettner Solon, DFL-Duluth, asked.

In the first three months of the 2007 legislative session, the Senate has passed all of its tax and spending bills, the bread and butter this session. House members begin wrapping up their similar bills soon after they return.

While representatives finish passing budget bills, legislative leaders will negotiate how much to spend in categories such as health, public safety, education, etc. Once that decision is made by April 27, conference committees start to negotiate differences between House and Senate bills.

Some bills appear headed to gubernatorial vetoes, which puts the House and Senate back in play as lawmakers try to draw up new budget bills that Pawlenty can accept.

An example of the difficulties facing lawmakers and Pawlenty is tax.

The Senate voted to raise income taxes on the richest Minnesotans nearly $1 billion. The House is considering a much more modest $433 million tax hike.

Five members of the House and five of the Senate will form a conference committee, then sit down in a Capitol meeting room to decide how the final bill should be crafted. The Pawlenty administration will be there with input, too.

In a way, conference committees mark the restart the legislative session. Senators and representatives initially pass what they think best, but compromise is demanded when working with the other chamber and the governor.

Of course, Pawlenty has a say in the matter once conference committees are done. If he doesn't like what he sees, he can veto a bill and lawmakers must start over a third time.

Rep. Torrey Westrom, R-Elbow Lake, likened the scenario to childhood fascination. Despite warnings from the governor, Democrats approach tax hikes gingerly yet curiously, he said - the same way a child may approach a pile of dog droppings after being warned by a parent.

"They're going to step in it and get smelly and get it all over their shoes," Westrom said.

If there's one issue some legislators suspect can survive a veto, it's transportation funding.

Senators and representatives passed a dime-a-gallon gasoline tax increase, but still need to work out differences between their bills.

Pawlenty frequently has said he would veto the bigger tax, but there is enough Republican support that some think it still could pass.

"I think we can probably get enough votes on an override," said Sen. Steve Murphy, DFL-Red Wing, who chairs the Senate Transportation Committee.

House Minority Leader Marty Seifert, R-Marshall, rejected the idea that the House would override transportation or other vetoes.

Murphy has a smaller bill ready to go if his prime one is vetoed and legislators uphold the veto.

"It's going to be a much weaker bill than what we've got on the table right now," Murphy said.

Democrats, especially, say more money is needed to fund programs important to Minnesotans. For instance, property tax relief will take more than is available unless other taxes go up, Democrats say. About half of the nearly $1 billion DFL tax increase proposal would go to property tax relief.

Democrats gained control of the House in January, and new Democratic leaders are in place in the Senate. Separately, they have laid down their priorities and say they are fulfilling them.

House Majority Leader Tony Sertich, DFL-Chisholm, pointed to passage of a renewable energy standard, a measure giving Minnesotans $24 million in tax relief and an agreement aimed at protecting the Great Lakes watershed as major accomplishments of the first three months of the session.

"We're making great progress," Sertich said.

Sertich said legislative leaders and Pawlenty met after last November's election and pledged to work together.

"With cooperation comes give and take," Sertich said. "It seems the governor is doing a lot of taking and not much giving."

While Republicans hint that Democratic initiatives may lead to a special session, House Speaker Margaret Anderson Kelliher, DFL-Minneapolis, said those chances are "very low."

"We will come across the finish line in an orderly fashion," Kelliher said.

Sen. Gary Kubly, DFL-Granite Falls, said the atmosphere around the Capitol is civil.

"It's been much more cooperative than the past few years," he said.

"I don't think we should pat ourselves on the back for being civil," Rep. Steve Sviggum, R-Kenyon, said. "That's expected."

Instead, Sviggum and other Republicans looked to the role of their Democratic counterparts, saying the majority needs to be forging compromises - not sending Pawlenty controversial tax increases.

"They're playing chicken with the governor," said Sen. Joe Gimse, R-Willmar. "And I'm not liking being in the vehicle."


Rep. Mary Ellen Otremba, DFL-Long Prairie, said lawmakers made progress in the first three months of the legislative session by assembling major budget bills.

Otremba, who leads a committee on agriculture, rural economies and veterans' issues, said legislators will return to the drawing board if Pawlenty rejects their plan.

"If they get vetoed ... we'll be going back into our committees" to work on alternative budget bills, she said.

Farmers across Minnesota will benefit from proposals in both the Senate and House health care funding bills, Otremba said. Both measures change requirements for MinnesotaCare, the state-subsidized health insurance program. As a result, more farmers will be eligible for the program and other farmers already enrolled will see premium decreases, she said.

Otremba also touted an effort to remember former state Sen. Dallas Sams, who died of brain cancer in March.

A bill authored by Otremba, a longtime friend of Sams', would name a stretch of Highway 210 between the late senator's hometown of Staples and Motley the Dallas Sams Memorial Highway.

"We thought it only fitting to do that," Otremba said, adding Sams had secured state funding for the highway. The bill is moving through the Legislature.

Democrats say they welcome Republican proposals.

"We're hearing all the bills," said Rep. Paul Marquart, DFL-Dilworth, who chairs the House property tax committee, "and that wasn't always the case in the past."

Marquart said emergency relief for flood-ravaged Browns Valley takes top priority for him.

"We've always come to aid of communities going through disasters," Marquart, DFL-Dilworth, said of the Legislature.

As to how Democratic proposals calling for tax increases will line up with Pawlenty is a tough call, he said.

"So many people think that they can write the script right now," he said.

Republican Sen. Steve Dille of Dassel said he hopes to see a transportation bill that's bigger rather than smaller. Dille guessed that by session's end, transportation efforts will see "significant" funding increases.

"Beyond that," Dille laughed, "I'm not making any predictions."

Things this session are developing quickly, most legislators agreed, and moving at a pace that seems to strike a positive chord across the board.

Committee chairmen were under earlier deadlines this session than in years past, and have been achieving those benchmarks.

"It's good to see us making progress," Gimse said. "That's positive."

Looking into his crystal ball, Westrom said he sees lawmakers spending much of April working on bills "that are going to be veto bait," before scurrying happens later in the month to revise legislation Pawlenty has sent back. Provided that process continues - and is reconciled - in the following couple weeks, "we can adjourn on time."

Battling for rural dollars "is a fight," Westrom said, but he's still seeing progress for projects aiding his district, including a renewable energy research center in Morris.

Gimse said he continues to support a nickel-per-gallon fuel tax increase, but has reservations about other fees built into the Senate transportation bill.

"They are getting so loaded with taxes," Gimse said.

Though Gimse said the tone in the Senate remains professional, Democrats "just aren't giving an inch," he said.

More than halfway through his first legislative session, Sen. Bill Ingebrigtsen, R-Alexandria, said that while he's finding the Capitol to be "an amazing place" that reacts quickly to constituents' needs, he's growing frustrated with Democratic tax increases.

If he were to assign a letter grade to the Legislature, Ingebrigtsen said he'd give it a D-plus, "and it appears to be going down from there."

"When we're sitting down here with a surplus of money, they should not be talking loudly about taxes," he said.

Ingebrigtsen said he didn't take a district agenda with him to St. Paul, but said he's been keeping a focus on rural issues, which he worried are taking a backseat to metro priorities.

"I think there's an imbalance," Ingebrigtsen said.

Kubly said tax increases are necessary this session in order to catch up with what's been cut. Rebates and cuts made over the past four years have taken their toll, he said.

"I don't think the cuts we've made are sustainable," Kubly said.

Prettner Solon said she believes "something has to move" on transportation this session. And a permanent plan to fix roads and start new projects means serious funding, she said.

"We need at least 10 cents" in fuel tax increases, Prettner Solon said. "Ten cents is really not a lot."

Despite some conflicts between Democrats and the governor, Prettner Solon said significant agreements have already been reached. That includes a statewide renewable energy standard, signed by Pawlenty in February, which requires 25 percent of Minnesota's electricity to be generated by next-generation sources by 2025.

Rep. Mary Murphy, DFL-Hermantown, said now that Republicans are the House minority, they "seem to be nipping at our heels more than we nipped at their heels" when Democrats were outnumbered.

Civility and cooperation this year, Murphy said, "is more apparent than the last two sessions."

Funding for expansion of the Duluth Entertainment Convention Center is all but locked up this session, with proposals from the Senate, House and Pawlenty all sending at least $30 million toward the project.

"I'm still optimistic and hopeful that we will get the governor's request," Murphy said of Pawlenty's $37.9 million funding offer.

If cuts made by Pawlenty in 2003 while balancing the state budget are to be restored, that's going to mean finding new dollars, said Sen. Tony Lourey, DFL-Kerrick.

"What we're doing is pushing around inflation," he said. "You can't do that with fake money."

That will mean tax increases in some areas like transportation, Lourey said.

Bills he's been working on include a local option sales tax for Cloquet, which Lourey said is receiving strong support in the Senate.

Lourey is also championing several health care bills, including one that would increase reimbursements for providers of children's therapeutic services.

Sen. Rod Skoe, DFL-Clearbrook, said compromise will be the name of the game as Senate tax bills get to Pawlenty's desk.

"I think the governor should consider compromising on some of the things with the Senate," said Skoe, who chairs the Senate property tax committee.

Skoe said the tax hikes for businesses found in his property tax relief plan and income tax increases included in the Senate education funding package are simply correcting old problems.

"We just couldn't afford stuff and we made a mistake" by cutting some taxes in previous years, Skoe said.

Next session, when the Legislature undertakes a larger public works bill, will be when more projects from his area will be considered, Skoe said.

Rep. Brita Sailer, DFL-Park Rapids, said constituents are seeing exactly what they asked for from lawmakers this legislative session - property tax relief.

"If there was one thing people talked about over and over," Sailer said, "it's property taxes."

She praised House efforts to free up relief, saying senior citizens, farmers and school districts all would see savings under the plan.

As to how Democratic proposals will match up with Pawlenty's opposition to tax increases, Sailer noted that several weeks remain in the session.

"It's the beginning part of negotiations," she said.

Sen. Dan Skogen, DFL-Hewitt, said Democratic lawmakers are largely aware how their proposals will line up with Pawlenty's agenda. Gaining a few more weeks of negotiating time, he said, is part of the reason why legislators have been on tighter deadlines this session.

"Then we'll see what the governor can tolerate," Skogen said. "I'm pleased my caucus has the home field advantage."

A former regional treatment facility campus in Fergus Falls is poised to receive tax breaks under a Skogen bill, which was passed in a larger Senate tax package.

The Senate tax bill also includes Skogen's proposal to allow Scambler Township to impose a tax on gravel.

As for transportation, Skogen said he thinks the current proposal's dime-per-gallon gas tax hike may be aggressive.

"It'll be interesting to see what survives," he said.

Rep. Bernie Lieder, DFL-Crookston, said the session has been "pretty compressed," adding that the pace is about two or three weeks ahead of a typical session.

Lieder, who chairs the House transportation finance committee, said he's concerned legislative bills won't be received well by Pawlenty.

When bills are lined up on the governor's desk, Lieder said they can be knocked over "like a stack of dominoes."

"I think every one of the bills is subject to a veto," Lieder said.

Besides transportation issues, Lieder said he's closely following bills calling for funding for state nursing homes, calling those facilities "the economic engine of some small communities."

Rep. Dave Olin, DFL-Thief River Falls, called his first three months in the Legislature hectic, but not surprising in terms of where legislation is headed.

Olin said he thinks lawmakers are heading for a "knock-down, drag-out" series of negotiations with Pawlenty.

Public works projects slated for Roseau have been passed in the House, Olin noted, as well as funding to study bovine tuberculosis.

Despite differences between the governor and Democratic legislators, Olin doubted an impasse would cast the Legislature into a special session this year.

For Rep. Doug Magnus, R-Slayton, too many House committees and too little organization have led to "chaos - and a lot of problems" this legislative session, he said.

Democratic leadership, Magnus said, has created a Twin Cities-focused system that leaves many rural issues in the dust.

He's worried that instead of being lumped into a single bill, many energy measures are being decentralized, resulting in "millions of dollars flying out the door" without means for proper oversight.

Still, Magnus said he thinks bipartisan efforts behind veterans-related legislation and a comprehensive agriculture bill should forge good policy.

Sen. Jim Vickerman, DFL-Tracy, has spent much of the session urging fellow lawmakers to back provisions in the governor's $75 million veterans' aid package. The Senate passed about $40 million, which Vickerman considers "excellent."

But there's still work to be done, Vickerman said, adding that a number of House committees still need to hear veterans-related bills.

"It's going to be a challenge," he said.

Vickerman predicted a series of negotiations ahead as Democratic proposals land on Pawlenty's desk. Whether that means a special session, Vickerman said remains to be seen.

"This place is never done until it's done," Vickerman said.

Seifert, the top Republican in the House, gave his Democratic counterparts low marks so far this session. Common sense, fiscal and personal responsibility all came under fire in his session report card.

"We're trying every mechanism possible to get their attention," Seifert said.

Sviggum said the Legislature has just cleared its first phase of the session - passing "tax and spend" bills - which he said will be followed by Pawlenty vetoes.

After that, Sviggum said, Democrats will have to forge an agreement with the governor since "there's not a chance" of veto overrides, he said.

By May 21, a compromise will have been reached, Sviggum said, ending "at the appropriate time with good pieces of legislation moving in the best interest of the state."

State Capitol Bureau reporter Scott Wente contributed to this story.

Don Davis
Don Davis has been the Forum Communications Minnesota Capitol Bureau chief since 2001, covering state government and politics for two dozen newspapers in the state. Don also blogs at Capital Chatter on Areavoices.