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Deal Struck, More Issues Remain for Legislature
By Martin Kaste
May 12, 1999
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Minnesota's experiment in three-party government has passed its first big test. Negotiators for the House, Senate and governor broke the budget logjam and cleared the way for the Legislature to finish work on major spending bills. Legislative leaders say they'll still be able to meet their May 17th deadline, but only if they work nearly around the clock. Legislators still have serious differences to resolve.

SENATE MAJORITY LEADER ROGER MOE gave in on income-tax cuts. Since January, he's agreed the state should cut income taxes, but not across the board; and especially not on the highest wages. Governor Ventura generally backed Moe on this point until last Sunday. Once the governor changed his mind, all Moe could do was delay capitulation as long as possible, and see if what he could get for it. He asked for an extra $100 million for public schools. House Speaker Steve Sviggum offered $50 million, and then they got together and agreed to give schools $50 million from current budget surpluses and pledge another $50 million from future surpluses - assuming the surpluses continue to roll in as they have. Moe says that clinched the deal.

Moe: I think overall, it's a balanced package. Everybody has some successes and some things they probably wish would happen, but those are battles we will fight another day.
In the deal, the Moe gets the $1 billion in tobacco endowments he wants to set aside for medical and social programs - although it's not yet certain what form those endowments will take. Speaker Sviggum and the House get a minimum half-percentage point cut on all three income-tax brackets, worth, along with other permanent tax cuts, about $1.5 billion every two years.

The governor gets $60 million in seed money for a light-rail line between downtown Minneapolis and the Mall of America. But there, too, negotiators compromised. They agreed to borrow the money, to leave more current money for tax relief and the extra spending on schools.

News of the agreement put the governor in a jovial mood, and he celebrated his victories.
Ventura: The people of Minnesota deserve endowments, today we set aside the tobacco money; the people of Minnesota deserve rail transit. Today, we talked about how to move forward with the support of leadership. The people of Minnesota will be well-served by state government that can still deliver services.
Many of Ventura's wins will make it harder for Republican leaders to sell the deal to the fiscal conservatives in the House. Some are already threatening not to vote for the tobacco endowments or to borrow money for light rail, and Speaker Sviggum may need some DFL votes to push things through. Still, Majority Leader Tim Pawlenty says he can convince his fellow Republicans to go along with the compromise.
Pawlenty: Don't lose perspective. This is the largest permanent tax cut in the history of the state of Minnesota, plus, plus, plus. And we're going to have across-the-board income-tax cuts for every working Minnesotan, with more potential cuts in the income-tax-cut side or otherwise.
Tax relief could still turn into a big stumbling block. House and Senate negotiators have agreed on the total value of tax cuts and to cut all three income-tax rates by at least one-half percent. But as Senator Moe points out, that doesn't mean everything's been squared away.
Moe: There's a number of tax issues, there's income tax, there's sales tax, there's property tax, provider tax, motor vehicle license-tab issues, that's all on the table; all within the confines of the number we've agreed to.
Besides taxes and spending, conference committees still have to try to compromise on dozens of thorny policy issues, including the Profile of Learning, wolf management and air-pollution standards for animal feedlots. And the Legislature faces a potentially explosive confrontation over abortion laws. The House version of the Health and Human Services Bill contains a series of restrictions on abortion, such as a mandatory waiting period and a ban on so-called partial-birth abortions. The Senate and the governor have pledged to oppose the restrictions. Last year, a standoff on similar abortion issues nearly forced a special session - precisely the outcome Governor Ventura is trying to avoid this year.