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Business leaders say they're pleasantly surprised at the results of the legislative session. That represents something of a departure from a month ago, when there was cautious carping about Governor Jesse Ventura's stance on taxes.

AS GOVERNOR JESSE VENTURA reached his first 100 days in office, business leaders were grumbling about tax issues. Their main complaint: the governor's proposal to cut income taxes left out the top tax bracket.

The Minnesota Chamber of Commerce and Industry had put a high priority on reducing the top income tax bracket. The state's largest business group says it would help 400,000 small- and medium-sized Minnesota businesses, which pay what amounts to corporate income taxes through their owners' personal income tax. The budget deal cuts reduces tax rate for the highest and lowest income tax brackets by half a percent, with a three-quarters of a percent cut for the middle bracket.

Business leaders are also pleased that lawmakers continued to ratchet down commercial and industrial property taxes. Duane Benson of the Minnesota Business Partnership list of victories includes legislation that will reduce or contain employers costs for health insurance.

Benson says taxes are a key factor for Minnesota companies trying to attract and keep skilled and talented employees. The Minnesota Department of Economic Security reports that the state's seasonally-adjusted unemployment rate tied a 22-year record low for all states in April.

Even though income-tax cuts are applied across the board, Bernard Brommer of the Minnesota AFL-CIO says they effectively send much of the budget surplus to higher-income Minnesotans. While he says that's disappointing, Brommer also says labor had its share of victories in the first legislative session with a Reform Party governor, Republicans in control of the House, and Democrats the Senate.

Lawmakers passed one tax break intended to help the the film industry. Minnesota's film business has struggled to compete with Canada and other countries with lower costs and powerful tax incentives. Lawmakers exempted television commercial production, a key part of Minnesota's industry, from the sales tax after advertising industry executives promised in writing to keep more production in the state. Lee Lynch of the advertising firm Carmichael Lynch says Minnesota could compete with Los Angeles, at least until the six-and-a-half percent tax is applied.

The Minnesota Film Board says the extra production business will help re-invigorate the industry and the state will get the money back through income and other taxes.

State economist Tom Stinson says the $650 average sales-tax rebate coming later this year will boost the state economy overall. He says the checks will be sizeable enough for people to spend them on big-ticket items.

Stinson says the biggest single beneficiary of the permanent income tax cuts will be the federal government. A lower state tax means more income for the feds to tax.