May 12, 2009 9:47 pm US/Central
6 Days To Deadline And Still No MN Budget Deal
ST. PAUL (AP) ―
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Pawlenty invited legislative leaders to his office on Tuesday afternoon. They accepted. (File)
CBS
Top Democrats and Republican Gov. Tim Pawlenty did something Tuesday they have done only a few times this year: They sat down and talked.
With six days to go in the session, Pawlenty invited Democrats who control the Legislature to his office. The two sides remain far apart on how to close a $4.6 billion deficit and wrap up a two-year state budget by Monday. The size of the gap: $3 billion.
It was the first time lawmakers and Pawlenty faced each other directly since late April. Judging by the comments afterward, they still have a lot of ground to cover before shaking hands and going home for the year.
"There's still plenty of time to get this session done if there's a willingness to do that," Pawlenty said. He said he wasn't budging on his opposition to tax increases.
House Speaker Margaret Anderson Kelliher said talk of overriding Pawlenty's veto of a $1 billion tax plan went nowhere in the meeting. Democrats want the budget to include $1 billion in ongoing new revenue, most likely new taxes, but Pawlenty has shown little interest.
"His basic answer to all of these things was no," said Kelliher, DFL-Minneapolis.
GOP House Minority Leader Marty Seifert said the state's business climate can't handle the tax increases. "It was a cordial meeting. I don't know that there was an enormous amount of progress other than just restating where everyone is at," said Seifert, R-Marshall.
Having no overarching budget deal, the Legislature has moved ahead to pass pieces of the state budget anyway. The House voted 87-45 on Tuesday for a spending bill that funds courts, prisons and state-level law enforcement, sending the package to the governor.
Meanwhile, conference committee negotiators wrapped up bills for K-12 schools, higher education and other state programs.
The $14 billion K-12 plan keeps aid to schools at present levels over the next two years. Rep. Mindy Greiling, DFL-Roseville, said while the bill avoids real-dollar cuts it wouldn't spare them hard budget decisions.
"With flat funding, schools will still be laying off teachers," she said.
Republican Rep. Pat Garafolo, R-Farmington, said he is counting on a Pawlenty veto because the bill lacks changes to the way schools do business, including performance incentives.
The higher education bill shaves funding to public colleges, but not as deep as proposed earlier. Rep. Tom Rukavina, DFL-Virginia, said colleges leaders agreed not to resort to steep tuition hikes to make up the losses.
Both bills, and a few other remaining budget packages, are due for votes Wednesday.
Senate Majority Leader Larry Pogemiller said negotiators have worked closely with Pawlenty's administration but the governor has made no promises to sign the bills. Pawlenty said a few of the bills were in a form he could accept and others might face partial vetoes.
A "lights-on" bill to keep government running if no deal is struck took a step forward in a House committee. Pawlenty said a "responsible and sustainable lights-on bill makes some sense" but he wouldn't commit to the one in play.
Before the meeting, Pawlenty's top finance official said it was time for top-level talks.
"It's getting increasingly difficult how that's going to piece together without looking at the whole picture," said Management and Budget Commissioner Tom Hanson.
The $3 billion gap remains after the governor vetoed the tax bill and the Legislature rejected his $1 billion borrowing plan. Also in flux: Delaying as much as $1.8 billion in school payments, a position the Senate has not yet accepted.
Kelliher is contemplating an attempt to override Pawlenty on the tax bill to bring in cash for schools, hospitals and nursing homes. The bill contains tax increases on the best-paid earners, alcoholic beverages and credit card companies that charge high interest rates.
"Whatever the governor needs to call it, if he needs to call it a surcharge, if he needs to call it a fee, whatever the governor needs to preserve his dignity I will do," Kelliher said.
Still, Republicans predicted there wouldn't be three or more GOP defectors needed to pull off an override in the House.
To build support for an override, Democrats are planning to unveil a second round of bills with even more painful spending cuts. A House-Senate conference committee on health and welfare programs started that effort Tuesday, with a lineup of people ready to testify.
"It makes me shudder," said Mary Edwards, an executive with Fairview Health Services who said deeper state cuts would lead to more job losses in an industry already hard hit by the recession.
Pawlenty has until Thursday to act on a health and welfare bill that doesn't cut as deeply as he proposed.
While public universities and colleges are also facing state aid reductions, House Capital Investment Committee Chairwoman Alice Hausman said Tuesday that they will do well in a construction projects bill of slightly less than $300 million.
In addition to money to fix up college buildings, Hausman, DFL-St. Paul, said the bill includes $54 million for flood relief projects, primarily in the Red River Valley, and $26 million for intercity rail initiatives.
She said the bill is being finished without a deal with Pawlenty, who could remove some items using the line-item veto.
If lawmakers miss Monday's mandatory adjournment deadline, a special session would be needed to finish the budget before it runs out June 30.
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Lawmakers managed to narrowly avoid a special session drafting the budget last year.
(© 2009 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)
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