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Action on tax, education bills lessens chance of shutdown
By Michael Khoo, Minnesota Public Radio
June 29, 2001
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State lawmakers worked into the early morning on budget legislation needed to avert a partial government shutdown. While their work still isn't complete, both the House and the Senate did pass a cornerstone of the budget Thursday - a major overhaul of Minnesota's property-tax system. The $760 million package offers double-digit property-tax cuts for all categories of property and significantly reforms the way schools are funded. And just past midnight, the House passed a funding bill for K-12 education.
House Speaker Steve Sviggum attends to the daughter of Rep. Chris Gerlach while directing debate of a major tax bill Thursday. Listen to a portion of the debate.

See details of the plan.

GOV. VENTURA INITIATED THE PROPERTY-TAX DEBATE last fall when he first proposed eliminating the state-mandated general education levy. Abolishing that levy and filling the funding gap with projected surplus dollars generates significant local property-tax cuts. As the House opened debate on the bill, Ventura declared victory during an address to the Minnesota Taxpayers' Association.

"The economic times were right; the will of the people of was here; and we didn't give up when the going got tough. We swung hard and we connected. This bill, ladies and gentlemen, is a home run," he said.

The House passed the measure on a strong 117-16 bipartisan vote. Republican leaders, who joined Ventura in pushing the property-tax reforms, say the bill will cut property taxes roughly 25 percent for homes and apartments and nearly 10 percent for businesses and cabins. House Taxes Committee Chair Ron Abrams says the bill also contains important reforms that give local voters greater influence over property tax decisions and reduce disparities that taxed homes at lower rates than businesses and apartments.

"We are turning the property tax truly into a local property tax. We are setting the rates between various classifications of property in an appropriate fashion rather than in a way which stifles economic growth and development," Abrams said.

Shortly after the House vote, the Senate approved the tax bill 52-11. Among the "no" votes were Senate Majority Leader Roger Moe and Senate Taxes Committee Chair Larry Pogemiller of Minneapolis. Moe, who last week accepted the tax bill as part of Gov. Jesse Ventura's global budget compromise, says he agreed to the deal in order to end this year's overdue session. He says that doesn't mean he believes the plan is good policy. Moe says the package will shift a larger portion of the property tax burden to low- and mid-valued homes, despite safeguards won by Democrats. And he says the tax cuts siphon funding from other state services.

"I didn't think we put enough into early childhood education. I don't think we're going to put enough into K-12 education and other areas. Then I'm not going to be a hypocrite. I'm not going to stand here and say, 'Yeah, I'll vote for the politically easy thing for the tax cuts, short term.' But then see a problem out two, three, four, five years from now? No, I can't do that," Moe said.


The school-funding debate returned in the House when lawmakers took up the K-12 spending bill. The $8.7 billion measure passed on a vote of 69-62. DFLer Lyndon Carlson of Crystal argued the measure was too lean and would lead to teacher layoffs over the next two years.

"It means that class sizes will increase. And when I mentioned earlier that I spent 34 years in the classroom, for those of you that are not in education, believe me it makes a difference when you have more students in the classroom. You just can't meet the individual needs in the way you should," Carlson said.

Julien Carter, who directs the shutdown operation for Gov. Ventura, talks to MPR's Lorna Benson about the prospects for a government shutdown. Listen.
House Republicans, however, note the bill provides roughly three times the new money proposed by Ventura. And K-12 Finances Committee Chair Alice Seagren of Bloomington says negotiators did as much as they could within the spending parameters they were given.

"Is it enough? No, it's probably not enough. But we worked hard to try to do what we could, and we're hoping that districts will be able to continue to educate. And I do believe that they will be able to do a good job with some of the reforms and some of the monies that we have provided," Seagren said.

Among the reforms is a requirement that school districts not approve teacher contracts that could throw their budgets out of balance. The "structural balance" condition was a key provision for Ventura and House Republicans. The Senate is expected to approve the bill later Friday. Lawmakers also must pass measures to fund health and human services, transportation, and state agencies by midnight tomorrow, otherwise some state services are likely to shut down.