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Cigarette fee is no slam dunk, leaders say
July 11, 2005

After months of verbal confrontations, Senate Majority Leader Dean Johnson and House Speaker Steve Sviggum enjoy a lighter moment prior to their appearance on MPR's Midday on Monday from the Capitol. (MPR Photo/Sam Choo)

Nearly 9,000 state employees are back on the job after a weekend budget deal ended a partial state government shutdown. Negotiators are trying to finish bills dealing with health and human services and taxes, and have already wrapped up a K-12 spending bill. Legislative leaders say they're trying to line up enough votes to pass the legislation. They disagree over whether the partial shutdown resulted in a better budget for the state.

St. Paul, Minn. — Legislative leaders say they're worried about finding enough votes for the health and human services bill, which includes a 75-cents-a-pack cigarette tax. The so-called "health impact fee" proposed by Gov. Pawlenty is the biggest new revenue source in the budget deal.

Republican House Speaker Steve Sviggum of Kenyon says the tobacco charge is controversial among lawmakers of both parties.

"I know a significant number of members of the caucus that will not vote for it. A number of Democrats have told me they will not vote for the health impact fee," he says.

One of those lawmakers planning to vote against the bill containing the cigarette tax is Republican Rep. Mary Liz Holberg of Lakeville.

"I think that we could have lived with an 8-percent increase in spending. I don't think we needed the extra money. Certainly, it appears that we needed it to get the job done, but I was not in that camp of doing additional spending," she said.

In Holberg's view, nothing was gained by the week-long government shutdown. She says the budget deal spends too much, and doesn't contain enough government reform.

Many Democrats, on the other hand, say they think the shutdown was worth it. They believe the final deal achieves DFL policy goals that weren't guaranteed before the shutdown.

Senate Taxes Committee Chair Larry Pogemiller says Democrats got more money for local government aid, and protected MinnesotaCare, the state's subsidized health insurance program for the working poor.

"It was worth holding on for a few more weeks to protect people's health care and to get more funding for education."

Right before the shutdown, Republicans did offer to maintain eligibility for MinnesotaCare, and boost education spending by 4.5 percent a year. But those offers hinged on money from a proposed casino at the Canterbury Park racetrack, which Democrats opposed.

The deal now includes a 4-percent education increase, and no so-called racino. DFL leaders also pushed to eliminate a $5,000 cap on MinnesotaCare benefits, which was included in the final deal.

DFL Senate Majority Leader Dean Johnson of Willmar says the package is better than it would have been before the shutdown.

"The one thing it has is 22,000 Minnesotans who will retain their health insurance; that would not have happened -- potentially not have happened -- had we shut down the legislative session earlier. I think it's a better education bill now than it was two or three weeks ago," according to Johnson.

Republican House Speaker Sviggum disagrees, saying there was no need to shut down state government to get this deal..

"I would say that there was probably nothing in this agreement that was not either on the table or had been discussed or been given offers back and forth," says Sviggum.

Sviggum and Johnson agree that all of the remaining bills will likely need bipartisan votes to pass. The full House and Senate plan to take up the bills Wednesday. The next deadline is midnight Thursday, when temporary state government funding runs out if the Legislature hasn't passed budget bills.