Politics

ST. PAUL (WCCO) ― Democrats who control the Minnesota Legislature on Friday confronted GOP Gov. Tim Pawlenty with a $1 billion tax-for-spending trade-off he promised to veto, setting the stage for a potential override attempt.

The House debated the bill for five hours before voting 86-45, which is four votes shy of the support it would need to get by a Pawlenty veto. The Senate passed the bill 44-20.

It contains a mix of new taxes on alcohol, income from the top-paid Minnesotans and credit card companies that charge their consumers high interest rates.

House Speaker Margaret Anderson Kelliher wouldn't say whether she has the votes to buck Pawlenty. At least three House Republicans would have to join every House Democrat to enact the bill over a veto. One Democrat, Rep. Gene Pelowski of Winona, sided with Republicans.

In the Senate, Democrats David Tomassoni of Chisholm and Dan Sparks of Austin joined all present Republicans in opposition. In both chambers, there were a combined six absenses, all Republicans.

Kelliher said lawmakers must face the prospect of losing local hospitals and nursing homes without the extra tax money.

"If the governor remains inflexible and so disengaged and does not bring ongoing revenue to the budget shortfall, then I think the Legislature and the House will be left with only one choice, and that is to attempt an override," said Kelliher, DFL-Minneapolis.

She nicknamed Pawlenty the "Permanent Deficit Governor" and "Credit Card Governor" for his long-standing opposition to state tax increases and his $1 billion borrowing proposal. Republicans got into the name-game, with Rep. Steve Drazkowski accusing Democrats of "Taxaholism."

Even as the chambers prepared to vote on the plan, Pawlenty warned that the exercise would be a waste of time. The Legislature has just nine days left before its May 18 adjournment deadline.

"I'll be happy to swing by the Capitol on my way home and veto it so they can get to a new and better bill on Saturday or Monday," Pawlenty said on his weekly radio show from White Bear Lake, where he is opening the fishing season.

He went even further in a letter to legislative leaders, urging them to send him the bill immediately for a veto.

"Hardworking Minnesotans might want to enjoy a drink over the Fishing Opener weekend without facing another tax hike," the letter said.

Fishing puns were in full bloom during the Legislature's debate. Sen. Geoff Michel, R-Edina, used one to describe the looming veto.

"We're going to get to watch the governor play catch and release," Michel said.

Sen. Tom Bakk, DFL-Cook, said raising taxes wasn't anyone's first choice.

"It's not perfect, but it is a solution," he said. "If not this, what?"

After the House vote, Republicans contended it didn't actually pass because bills that alter banking laws require two-thirds votes under the Minnesota Constitution. Kelliher didn't rule on the point of order, but DFLers insisted the GOP was relying on an outdated interpretation of the constitutional clause.

Minnesota's state budget is short $4.6 billion over the next two years, a hole that would be deeper without federal stimulus dollars. So far, Pawlenty has signed two small spending bills. He and lawmakers have yet to agree on the other 98 percent of the budget.

The attention is on the House, where the DFL is three votes short of the veto-proof majority they enjoy in the Senate.

"With the economy in the tank as it is the choices are all bad. If you just say 'No' that doesn't make it any easier on that school kid or on that mom or dad in the nursing home," said House Majority Leader Tony Sertich, DFL-Chisholm.

Rep. Keith Downey, R-Edina, criticized the proposal as "a gimmick to distract attention from the fact we've been here four months and we're down to the two-minute warning and we don't have anything coming close to a compromise solution."

House Minority Leader Marty Seifert predicted Republicans would sustain a veto. Three of the 47 House Republicans were absent for Friday's vote.

"We stand as a united caucus with the governor to say that the state treasury is not open for pillaging from the billion-dollar tax increase Kool-Aid drinkers," said Seifert, R-Marshall.

The bill would raise income taxes on the wealthiest Minnesotans, creating a new 9 percent rate starting at $250,000 for married couples filing jointly or $141,250 for single taxpayers. Taxes on beer, wine and liquor would go up for the first time since 1987, and credit card companies would pay a 30 percent surtax if they charged consumers interest rates topping 15 percent.

The proposal would funnel $585 million to public schools, $287 million to nursing homes and other long-term care providers and $114 million to hospitals.

The timing of the tax crescendo is telling.

If a veto override falls short, Democrats could have a diminished appetite for holding out for tax increases in a special session. But there might still be enough time left in the regular session to compromise and finish a budget, perhaps by accepting Pawlenty's borrowing plan, which is unpopular among lawmakers.

Meanwhile, the Legislature repassed an economic development budget bill that Pawlenty vetoed a day earlier. The new version lacks a roughly $33 million loan forgiveness for the Xcel Energy Center hockey arena, which Pawlenty objected to. The legislation pays for the Historical Society, tourism promotion and business development.

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In his veto message on the economic development bill, Pawlenty criticized St. Paul city leaders for planning to build a new ice sheet across the street from the Xcel while complaining about shrinking state aid payments. St. Paul aimed to use the money saved on the forgiven loan payments to finance the project.

(© 2009 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)