DFL Moves ‘alternative’ Tax Bill

Sen. Tom Bakk

Democrats in control of the Minnesota Legislature pushed through a second tax proposal late Thursday that combines major tax and spending decisions.

Republicans objected loudly to the maneuvering, which put major budget decisions in the hands of only several lawmakers who worked into the night.

The alternative tax bill could raise around $1 billion through a new income tax bracket on the wealthiest Minnesotans and an alcohol tax increase – and other measures – to fund two of the largest budget areas where agreements have yet to be reached – health and human services and public school education.

Senate Taxes Chairman Tom Bakk, DFL-Cook, said there are “stark differences” between a House tax plan that raises $1.5 billion and a Senate bill that increases taxes by $2.2 billion.

House Taxes Chairwoman Ann Lenczewski, DFL-Bloomington, said Gov. Tim Pawlenty has proposed $1 billion in new revenue, by borrowing funds, to help balance the state budget.

Lawmakers will compromise by lowering their proposed tax increases to $1 billion, Lenczewski said.

The bill, which surprised Capitol observers, is part of the debate about closing a $4.6 billion state budget shortfall and bringing the legislative session to a close by its May 18 adjournment date.

“We’re trying to create multiple avenues to get compromise and a solution,” Senate Majority Leader Larry Pogemiller, DFL-Minneapolis, said.

Negotiations continued on bills funding other budget areas, including agriculture, veterans, public safety and state government.

Republican Pawlenty has said he will not support tax increases.

“We’ll just let the Democrats get the tax increases out of their system early,” House Minority Leader Marty Seifert, R-Marshall, said. “At the end of the day, we’ll have to come up with something different.”