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Legislature passes budget, cigarette fee before heading home
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Work on the budget bills stopped when power went out at the Capitol. (MPR Photo/Tom Scheck)
Minnesota lawmakers are returning home after passing a $30.5 billion budget Wednesday night. The House and Senate passed four budget bills and then ended a special session that had resulted in a partial government shutdown. Lawmakers say they're disappointed they were a part of the first shutdown in state history but are urging the public to base their opinions on the final product.

St. Paul, Minn. — The final day of the seven-week-old special session showcased a battle of special interests, a bit of political showmanship and some blown fuses, literally. In the end, lawmakers finished their work at 10:45 after passing budget bills relating to health care, transportation, taxes and education.

Gov. Pawlenty says he isn't happy lawmakers needed to work overtime, but is happy with the final product.

"It wasn't pretty. It wasn't efficient, but it was democracy with all of its warts and all of its demands," he said.

In a news release, the governor maintained he held to his no-new-taxes pledge, something even Pawlenty's own colleagues question. The governor's proposal for a so-called health impact fee was the cornerstone to a budget deal between Pawlenty, House Republicans and Senate DFLers.

The 75-cents-a-pack cigarette tax will raise an estimated $400 million over two years. But Rep. Phil Krinkie, R-Shoreview, says calling the cigarette tax a fee is deceptive.

"I don't believe anyone in the state of Minnesota outside of the governor's office believes that a health impact fee is not a tax increase," Krinkie said.

Krinkie failed in his attempts to remove the tobacco tax from the Health and Human Services bill. Similar attempts failed in the Senate as well. Krinkie is one of 54 lawmakers who have signed a pledge not to raise taxes.

The health bill put many of them in a bind because it included the cigarette tax, but also other language favored by a powerful anti-abortion group. That meant conservative Republicans were forced to choose between breaking a no-new-taxes pledge or going against Minnesota Citizens Concerned for Life, which supported the bill.

Taxpayers League President David Strom says many lawmakers decided to break their no new taxes pledge instead of upsetting the MCCL.

"There are people who have told me, 'If I have to choose between babies and taxes, I'll choose babies,'" Strom said.

The House passed the Health and Human Services bill on an 88-40 vote. Many members argued the state needs the additional revenue to boost funding for schools and health care. Others, like Rep. Ron Latz, DFL-St. Louis Park, say the tax will decrease the costs attributed to treating smoking-related diseases.

I don't believe anyone in the state of Minnesota, outside of the governor's office, believes that a health impact fee is not a tax increase.
- Rep. Phil Krinkie, R-Shoreview

"Seventy-five cents per pack of cigarettes is a small amount to recoup some of those lost costs," Latz said.

Once the House passed the health bill, it looked like the Legislature would meet a self-imposed 8 p.m. deadline for completing the budget. And then the power went out. A blown transformer led to an hour-long delay in floor sessions.

Lawmakers prepared to continue in the dark, and planned to bring in court stenographers to record the debate. But the power came back and the House and Senate overwhelmingly passed the education and transportation budgets.

The education bill increases funding for schools by 4 percent each of the next two years. Sen. Leroy Stumpf, DFL-Plummer, said he's disappointed part of the package relies on local property tax increases. But he says the bill helps schools.

"This is a huge step forward for education funding for the state of Minnesota, even if it does rely heavily on property taxes. Our school districts will be very happy with what we do here today," said Stumpf.

Once they adjourned, several lawmakers expressed relief and were ready to start mending fences with a frustrated public. The eight-day shutdown did more than make lawmakers look bad. Nearly 9,000 state workers were furloughed and several state services were mothballed.

DFL Senate Majority Leader Dean Johnson blamed Gov. Pawlenty, calling him "Governor Shutdown."

"I've heard that back home and I hear it around here. He's the fifth governor I've served with, and that's the label he has," Johnson said.

Republican House Speaker Steve Sviggum say Johnson's characterization of Pawlenty proves that Senate DFLers wanted a shutdown to tarnish a well-liked governor with high approval ratings.

"They got their headline, which was, 'Gov. Pawlenty, first one to be over the shutdown of state government.' That's what they sought. That's what they were after," said Sviggum. "The fact that they're calling him 'Shutdown Tim' right now points that out even more vividly."

Even though lawmakers may shudder at the thought, there is talk that they may come back for yet another special session in the fall. Pawlenty and legislative leaders say they're open to the idea of addressing several issues, including stadiums for the Twins and University of Minnesota football team.

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