MPR: Three-Way Deal Solves Budget Impasse

Three-Way Deal Solves Budget Impasse
by Mike Mulcahy
May 4, 2000
Part of MPR's coverage of Session 2000

THE DEAL
Tentative details of the budget surplus agreement

PERMANENT FUNDING
$525 million divided three ways:
Senate:
$125 million for K-12 education
$25 million for human services
$25 million for natural resources
House:
$175 million, mostly for income tax cuts
Gov. Jesse Ventura:
$175 million for motor vehicle tab fee cuts
$18 million for a crime-prevention bill that already has passed
$3 million for debt service

ONE-TIME FUNDING
House proposals:
$400 million for transportation
$18 million for already passed crime-prevention bill
$925 million for sales tax rebate/agriculture relief
$11.6 million for higher education
$10 million for emergencies
$400 million capital investment bill (includes all bonding and cash capital projects)
$270.5 million of surplus federal welfare grants for needy families (uses to be negotiated)
$602 million available of surplus workers' comp insurance coverage for employers who have been unable to find policies in the private market

Senate proposals:

$425 million transportation package
$18 million for already passed crime-prevention bill
$627 million for sales tax rebate/agriculture relief
$11.6 million for higher education
$10 million for emergencies
$170 million for K-12 education
$500 million capital investment bill (includes all bonding and cash capital projects)
$270.5 million of surplus federal welfare grants for needy families (uses to be negotiated)
$499 million available of surplus workers' comp insurance coverage for employers who have been unable to find policies in the private market
Source: Associated Press

Not all House Republicans are happy with it, but legislative leaders say they've reached a deal on the state budget that will open the way to end the session. They've agreed to split more than $500 million of ongoing budget surplus money three ways; between the House Republicans, Senate Democrats and Governor Ventura. Top lawmakers say the process wasn't pretty, but the results will be good for Minnesota.

UNDER THE AGREEMENT, each leg of the tripartisan stool at the Capitol will control $175 million in permanent spending. House Republicans say they'll use their third for an income-tax cut.Senate DFLers say they'll increase spending for education, health care and natural resources with their share, and Governor Ventura has said he'll use his third to reduce the fees car owners pay when they renew their license tabs. It's not the process any of the three sides would have chosen if they weren't at an impasse, but DFL Senate Majority Leader Roger Moe, who originally suggested the one-third split last week, says it will deliver what Minnesotans want.

"A two-to-one ratio of tax relief to investments; I think that's a reasonable ratio, says Moe. "It looks like we're going to have tab reductions. Income tax and property-tax relief and investments in education, health care and the environment."

Moe originally suggested the idea of splitting the money three ways, but Governor Ventura made it the way out of the deadlock when he publicly endorsed it Tuesday. The governor may have seen it as the only way to get what he wanted: license-tab fee cuts. Ventura was in Chicago when lawmakers cut the deal, and seemed reluctant to acknowledge the House and Senate had actually signed off.

"I agreed to it because I thought it was the fairest way to get out of the session," Ventura said. "If they don't agree to it, well, that won't be a disaster because then the money will remain until the next biennial budget. I can live with that also."

Republicans in the House abandoned their typical openness approach and discussed the deal behind closed doors. House Speaker Steve Sviggum told reporters afterwards that many in his caucus are not pleased with the three-way split. But he says it's the best they could do with the other two sides working against them.

House Republicans originally proposed an $850 million tax cut, and Sviggum says he's disappointed to have to settle for a $350 million, but he tried to put the best face on the deal by saying it's better to govern than to end the session without an agreement. "It's a win-win-win in a package," said Sviggum. "Another permanent tax cut for taxpayers, some money for our schools, some money for nursing homes, tab reductions for the car owners of our state. You look at the entire package."

Some rank-and-file Republican House members were visibly upset as they left the closed meeting where they talked about the deal. Several refused to talk to reporters. Corcoran Republican Arlon Lindner did make a brief comment; saying he couldn't vote for the deal. "The governor's not supposed to be spending any money," Lindner said. "It's supposed to be the House and Senate's responsibility. I don't like this third, a third a third, and I'm not going to support that."

Republicans and DFL leaders will try to sell their members on the deal by saying the mix of tax cuts and spending increases will be a good plan to run for re-election on this fall. But at least one group, the Taxpayers League of Minnesota, is likely to make an issue out of the shrinking tax cut. "We distributed over a million voters guides with people's promises that they made, " said David Strom, the group's spokesman. "The very first question that we were asked was, 'Will you sign onto an omnibus tax bill that doesn't return the entire surplus?' Sixty percent of Republicans said, 'No.' We expect them to keep their promises and if they don't we'll inform people about that."

Even though they've worked out how to spend the ongoing surplus money, lawmakers still need to reach agreement on about $1.3 billion in one-time surplus money. Included in that money is another sales-tax rebate. House Republicans want a bigger rebate than Senate Democrats, but they say those issues shouldn't be nearly as hard to resolve as the ongoing money they've now agreed to divide up.

	Sign up to receive e-mail newsletters

	Audio help

	Text: Sm : Md : Lg