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As legislative sessions winds down, both sides dig in
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Gov. Pawlenty announces steps to reduce the budget deficit. He was joined by House Speaker Steve Sviggum and Senate Minority Leader Dick Day. (MPR Photo/Laura McCallum)
Four days before the end of the legislative session, Gov. Pawlenty has used his executive authority to erase nearly $100 million of the state's budget deficit. Legislative leaders have been at a standstill over how to close a projected $160 million. Pawlenty and Republican leaders have a plan for taking care of the rest, but DFL leaders are demanding public hearings on the budget. If they can't agree on a solution, many organizations that rely on state funding are worried.

St. Paul, Minn. — House and Senate leaders have been sparring for weeks over how to bring an orderly end to the session. They've met privately, aired their differences to the media and met one-on-one with the governor.

Nothing has broken the logjam. Now Republican leaders are trying a different tactic. Gov. Pawlenty has taken action to eliminate about 60 percent of the budget deficit, and proposed a plan to erase the rest with proposals that have passed both the House and Senate.

"We now have one last fleeting opportunity to get this session done on time in a productive fashion. Is this bold? Yes. But I think it's appropriate; it's based on what we know to be consensus items," Pawlenty said.

Those consensus items include collecting sales taxes on leased vehicles at the time of sale instead of over the course of the lease, and collecting cigarette taxes at the wholesale rather than the retail level.

Gov. Pawlenty's portion of the fix used $80 million in federal money that was scheduled to be transferred to a fund that pays for subsidized health insurance. He also ordered a 3-percent cut to state agencies.

The proposal would mean no racino at Canterbury Park -- a racino Republican legislative leaders support -- and no changes in the corporate tax code, which DFL leaders have called for.

Republican House Speaker Steve Sviggum of Kenyon says the plan doesn't include everything the House or the governor wanted, but it's reasonable.

"As the governor is going north fishing tonight, he may say that this is not the trophy walleye that he was looking for; it is a keeper," Sviggum said.

Sviggum says balancing the budget is the first step, and following that, the Legislature should pass a bonding bill to fund capital improvements and tougher penalties for sex offenders.

DFL leaders say balancing the budget is their top priority, but they don't like the Republican plan. They say it was cooked up in a back room, instead of arrived at through a public debate. House Minority Leader Matt Entenza of St. Paul says the proposal is typical of Republicans' "my way or the highway" approach to the budget.

"About two-thirds of their solution is bankrupting the health care access fund and taking away health care from grandma and grandpa, and that's hardly a compromise, and it's sort of the compromise that the big bad wolf would be offering," Entenza said.

Lawmakers are running out of time to get anything done this session. They can't pass bills on Monday and don't want to meet on Sunday, which leaves just two more days to agree on issues. Gov. Pawlenty says if the session achieves nothing, he probably won't call lawmakers back in special session. He says he would then close the remaining budget gap on his own. That could mean a freeze on state grants, an option the Ventura administration used.

Many non-profit organizations that rely on state funding say a grant freeze would have devastating consequences. Pam Determan, director of VINE Faith in Action in Mankato, an agency that helps seniors live independently in their homes, says her organization is expecting about $100,000 in state grants in July.

"There will be many people, many vulnerable people and many people who have very few options who are going to be affected by this if the grants are not funded," she said.

Determan says if her agency's state grants are canceled, she would have to lay off four staff people. She says she doesn't know who's to blame for the current stalemate, but says she hopes the state fixes its budget problem without hurting vulnerable people.

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