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Legislative and Administration Leaders Agree on Budget Deal
By Michael Khoo, Minnesota Public Radio
May 25, 2001
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The break in the deadlock over a state budget came after Gov. Jesse Ventura "tweaked" his earlier proposal. See details of the deal.
House and Senate negotiators announced a compromise on tax and spending measures that paves the way for an anticipated special session. Responding to an offer from Gov. Jesse Ventura, legislative leaders shook hands on an agreement for significant property-tax relief and reform as well as new funding sources for K-12 education. House GOP leaders and the Ventura administration are hailing the agreement as historic, but Senate Democrats say the compromise shortchanges education.

AFTER DAYS OF STALEMATE, Gov. Ventura made a last-ditch attempt to break the legislative deadlock. The governor acknowledges the deal doesn't completely satisfy any constituency, but he says it's attentive to the major requests of all three sides in the budget negotiations.

"Clearly it delivers on the promise I made to Minnesotans last January - permanent property tax relief starting next year, combined with fundamental reforms of the tax and school financing system. I urge the legislative leadership to accept it and commit to a completion date," Ventura said.

And accept it they did. The plan calls for eliminating the state-mandated general education levy, a cornerstone of Ventura's tax plan which should provide double-digit property-tax relief for all types of property. To satisfy a key Republican demand, the compromise also moves towards a uniform classification rate for properties of different types and market values.
Senate Majority Leader Roger Moe said the deal represents most of the framework of a plan from Gov. Ventura and House Speaker Steve Sviggum. He described the negotiations as "two against one." Listen to Sen. Moe's comments.

House Speaker Steve Sviggum thanked Ventura and his administration for brokering the deal. "You can say that the home team won in the extra innings; the home team meaning Minnesotans. Not Gov. Ventura, not House Republicans, not Senate Democrats, but all Minnesotans win with this agreement," Sviggum said.

Senate DFLers pushed for - and received - a plan for the state to take over a portion of excess school operating levies borne by local taxpayers. The move will increase revenues for districts with low property values and provide further tax cuts for wealthier ones, creating a more uniform and stable funding system.

The administration says the compromise gives each side three-fourths of what they sought. But Senate Majority Leader Roger Moe says the new spending for education and other sectors is inadequate. "I don't think that kids in Head Start and early childhood education got three-fourths of what they wanted. Far from it. They got nothing. I don't think trying to fix bottlenecks in this metropolitan area and addressing some of the transportation needs in this state got three-fourths of what the wanted. Far from it. I don't think the housing needs were met in any way, shape, or form," Moe said.

Moe predicted the budget will lead to teacher shortages in K-12 classrooms and tuition hikes at state colleges and universities. While unsatisfied with the deal, Moe says the Senate was painted into a corner when the administration and House Republicans linked arms over spending levels and how to structure property-tax reform, and he says holding out longer could have forced a government shutdown in July.

"When it's two against one, it's very difficult to negotiate from that position," Moe said. "The public has to know that. But at the same time, we feel it's not the responsible thing to do to shut government down."

House Republicans say they got most of the property tax changes they sought. House Speaker Steve Sviggum (shown above with House Majority Leader Tim Pawlenty) says the changes amount to meaningful reform of the property tax system. Listen to Sviggum's comments.
DFLers say the move towards uniform property-tax class rates will shift a greater share of the tax burden to lower- and mid-valued homes. The administration and Republicans respond that all properties will see a sharp drop in tax payments even if homes will pay a proportionally greater share of that reduced burden.

"This is a wonderful package," Sviggum said. "How he can be raining outside and thundering on a wonderful agreement that funds schools adequately, provides reforms in nursing homes, and comes forward with historic property? Wasn't the Democratic Party about property tax reform and relief at one time? Where the heck are they, folks? This is it."

The budget details remain to be resolved by informal conference committees, and heated battles over abortion and school accountability measures could still derail the progress. But Ventura has asked lawmakers to wrap up all work by June 11th. Without a tax bill by that date, cities, counties, and school districts will be unable to include any reforms in next year's tax collections. Ventura says if lawmakers miss that mark, all bets are off.