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House Stuns Senate with Tax-Rebate Vote
By Martin Kaste
March 14, 1999
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The long-stalled debate over tax relief took a surprising turn when House DFLers joined forces with the Republican majority to approve across-the-board income-rate tax cuts. The DFL proposal also includes the Senate's version of one-time sales-tax rebates and more than $70 million in property-tax aid for farmers. The House DFLers sudden cooperation took Republican leaders by surprise, and put Senate DFLers on the defensive.

IN WHAT CAN ONLY BE DESCRIBED as an unusual legislative tactic, the DFL minority in the House last night embraced the Republican position on income-tax cuts. DFL leader Tom Pugh offered an amendment to an unrelated bill that cut the tax rate on all three income tax brackets, including the half-point cut on the bracket for the state's highest incomes, which Republicans have been holding out for in negotiations with the Senate. At first, incredulous House Republicans resisted the DFL move, but eventually they went along, and the tax cuts passed 129-1. DFL leader Pugh and House Republican Tim Pawlenty stood at the back of the House chamber as the votes came in, vying to take credit.

Pugh: We're working together, right? We did it, right?
Pawlenty: The fact of the matter is: you weren't willing to do this last year.
Pugh: Last year it was property taxes.
Pawlenty: You're now taking credit for across-the-board income-tax cuts and less than a year ago you voted against it.
Entenza: It was our amendment.
Pugh: All I'm taking credit for is moving the debate along, we gave an opportunity. Thankfully, you guys took it up. We put our votes up, you put your votes up, and we accomplished something. More than a handshake.
The DFL-sponsored amendment actually goes beyond the across-the-board income-tax cut the Republicans were looking for, by doubling the size of the cut for the middle income bracket.

In the tax-relief package, the income-tax cuts alone would cost about $1.7 billion over the next two years. The DFL amendment also includes the Senate's version of sales-tax rebates, the elimination of the so-called income tax "marriage penalty" and more than $70 million in tax relief for farmers.
Sviggum: To begin with, when I saw the first Pugh amendment, I thought it was nothing more than political games, which it probably was ...
Republican Speaker Steve Sviggum says the DFL tactic took him by surprise, but he's happy with the result.
Sviggum: It certainly was an opportunity for the House to make a strong statement, a strong statement that we want permanent tax cuts for every working Minnesotan. To the House Democrats who joined us in this tax cut, I just say, "Welcome from the dark side."
Democrats in the Senate may be wondering whether House Democrats have gone over to the "dark side." For months, the Senate has been resisting the very income-tax cuts that Pugh and his Democrats now appear to have endorsed. The few Senate staffers still in the Capitol after the House vote appeared stunned by the development, and Assistant Majority Leader Ember Reichgott Junge called the House leadership "out of control."
Junge: Unfortunately, the House leadership hasn't learned to govern yet. We need to be responsible, and the bottom line is: they're putting everything at risk to protect the top 6 percent of taxpayers and give them an even bigger tax break.
When asked whether she included House Democrats in that criticism, Junge said she was talking about the whole House. The preliminary response from the Senate has been negative. Majority Leader Roger Moe is not likely to let the Senate roll over for a House-sponsored tax-cut plan.

Meanwhile, the jobs of 40 or more employees of the Minnesota Zoo hang in the balance. The House tax-cut amendment was attached to a supplementary-budget bill that's supposed to provide stop-gap funding for the Zoo, the attorney general's office and a variety of other state agencies running low on funds. Zoo officials have already warned of layoffs if the money doesn't come through soon.

Martin Kaste covers politics for Minnesota Public Radio. You can reach him at