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Republicans, DFLers reluctant to give Pawlenty his cuts in human services
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Sen. Dick Day's proposal for generating $100 million from slot machines at Canterbury matters, he says, because it can be used to sidestep politically-sensitive spending cuts proposed by the governor. (MPR file photo)
Lawmakers have had a week to digest Gov. Tim Pawlenty's $160 million deficit-reduction plan, but few seem inclined to endorse it. Republican and Democratic lawmakers are finding it difficult to accept the governor's reductions in health care spending, and both sides of the aisle are floating alternative concepts. But Pawlenty, in turn, is unlikely to approve of what's percolating at the Legislature.

St. Paul, Minn. — Senate Republicans were the first out of the chute this year with their response to the governor's budget plan. And -- no surprise -- the response was gambling-heavy. The centerpiece of the proposal adds slot machines at the Canterbury Park racetrack in Shakopee.

GOP Senate Minority Leader Dick Day says that in return for permission to install the slot machines, the racetrack's owners are willing to offer up to $100 million to defray the current deficit. The state's future share of gaming receipts would be reduced accordingly to offset the track's upfront contribution.

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Image Sen. Dean Johnson

Gov. Pawlenty has been reluctant to embrace the racino route, but Day says he won't let that deter him this year.

"I don't want to give up my project this time," Day said. "I'm going to hang with this one for a long time. If the governor isn't with us, fine. Nothing I can do about it, but we have to stay as strong as we can to try and get that $100 million in play."

The $100 million matters, says Day, because it can be used to sidestep politically-sensitive spending cuts proposed by the governor. Pawlenty achieves balance, in part, by cutting payments to hospitals, nursing homes, and pharmacies.

Lawmakers in both bodies and on both sides of the aisle are eager to avoid that path. Republican House Speaker Steve Sviggum says his caucus, too, will recommend the racino solution rather than pinch nursing home payments.

"The vulnerable people in society, the vulnerable from the standpoint that they certainly need some state assistance, some state support. We know that we can't be giving the increases that ought be there, but we think we should be able to protect them from reductions in funding, reduced funding. And it's just a high priority for us," Sviggum said.

It's a high priority for Senate Democrats, too. But Majority Leader Dean Johnson says they've no appetite for using gambling dollars. Johnson says his caucus hasn't completed its budget response yet, but says it's likely to include a sweeping reduction in government management positions and a tightening of corporate tax laws.

Johnson says DFLers are also likely to consider extending two statewide taxes that are currently set to expire: one on alcohol, the other on rental cars.

"When we have a $160 million deficit you have to uncover all the stones in the budget, look at all the potential sources of cuts as well as revenue sources that exist," Johnson said.

That's left some Republican lawmakers warning that Democrats are preparing for a tax-raising spree, something Johnson says isn't in the works. And Johnson says it's actually Pawlenty who's raising taxes by proposing to collect the sales taxes on car and truck leases in one lump sum at the time of signing. Currently those taxes are spread out over the life of the lease.

Pawlenty says its unfair to characterize that proposal as a tax increase. All of which is likely to set the House and the governor against the Senate's possible tax changes, set the House and the Senate against the governor's health care cuts, and set the governor and the Senate against the House's gambling initiative.

Pawlenty says it's no surprise that the three visions have yet to merge.

"People need to realize we still have some budget problems. And just ducking responsibility, particularly when those problems are projected to continue for a while, isn't a good answer, isn't a good enough answer. So I'm going to hold the Legislature's feet to the fire and ask them to make difficult decisions," Pawlenty said.

House Republicans say they'll introduce their budget plan sometime in the next few weeks. Senate DFLers are likely to follow shortly afterwards.

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