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No appetite for taxes
By Laura McCallum
Minnesota Public Radio
February 4, 2002

Gov. Ventura's proposal to raise some taxes to balance the budget got its first hearing in the House Taxes Committee Monday. Lawyers, auto mechanics and newspaper publishers objected to the plan's impact on their bottom line. House and Senate leaders continue to say they won't raise taxes in the current two-year budget cycle, although a spokesman for the governor says legislators are simply avoiding the tough decisions.

As House Taxes Committee Chairman Ron Abrams put it, his hearing was less than a ringing endorsement for Gov. Ventura's plan to raise taxes on gasoline, cigarettes, and some services. "I just don't see the proposal gaining very much traction so far. Nobody's saying, 'Gee, this appears to be the way to go," he said.

Some of the loudest voices against the plan came from industries that would no longer be exempt from the sales tax. Ventura would extend the tax to legal fees, car repairs, newspapers and magazines.

David Steffens, owner of Dave Steffens Automotive in Minneapolis, says taxing car repairs affects Minnesotans who can least afford it.

"New cars need very few repairs," he said. "The major repairs, and the expansive repairs, occur to cars that are probably on their third owner, 10 or 15 years later. Often these cars are driven by single parent families, by people who are just struggling to get by, and they need this transportation. I don't believe it's fair to add to their misfortune by taxing it."

Some tax committee members say Ventura's entire bundle of tax hikes is regressive. They say taxes on cigarettes and gasoline will disproportionately affect poor people.

Ventura spokesman John Wodele says it's not surprising that smokers don't want an increase in the cigarette tax, and lawyers and publishers don't want their industries taxed. "It's easy to criticize something and say, 'Don't tax me, tax the next person,' but when you ask for suggestions as to who the next person might be, they're tough to come up with one," Wodele said.

Wodele says lawmakers are fiscally irresponsible if they don't balance the budget over the next four years.

Legislative leaders say they'll tackle the deficit in two chunks. First, they'll deal with the current budget cycle that ends in June of 2003. They say they'll wait until the next budget forecast comes out early next month to resolve the following biennium, often called the "out years."

Senate Taxes Committee Chairman Larry Pogemiller says the Legislature doesn't need to raise taxes this biennium, but it's problematic after that.

"Obviously we would like to resolve the out years without tax increases also, but I've not yet heard of a plan that does that. I hear a lot of work avoidance, I hear a lot of House members saying they just want to ignore the '04-'05," according to Pogemiller.

House Taxes Committee Chairman Abrams says there's not much appetite for raising taxes in the next biennium, not when there's an election and several more budget forecasts before then. All 201 legislative seats are on the ballot this fall.

Ventura spokesman Wodele says the governor expects the Legislature to make the tough choices this year. "Let's face the music now, get it done and go home," he said.

Wodele says raising taxes and cutting spending won't be any more palatable next year. And if lawmakers use up most of the state's one-time money this year, those are the options they're facing.

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