Politics

ST. PAUL (AP) ― The DFL-controlled Legislature forged ahead with spending plans for public health plans, hospitals, nursing homes, courts, prisons and state-level law enforcement on Monday, even as the fate of most of the state budget remained in limbo.

Billions of dollars in spending for the next two years remain in dispute. Republican Gov. Tim Pawlenty and majority Democrats haven't reached a broad-ranging budget deal entering the final week of session, although the governor offered some concessions on Monday.

Meanwhile, in a possible sign that budget deliberations could blow past the constitutional adjournment deadline, the Senate approved a lights-on bill to keep state agencies running even if a full budget isn't in place when the current one expires July 1.

"Just as a precaution we wanted to make sure we had the ability to avoid a government shutdown or even an agency shutdown," said Democratic Senate Majority Leader Larry Pogemiller.

On Saturday, Pawlenty vetoed a $1 billion tax increase that would have directed dollars to education and health care in the face of a mammoth deficit. The $4.6 billion shortfall -- an amount that would be larger without Minnesota-bound federal stimulus money -- is about 13 percent of the total budget.

Democrats and many Republicans are opposed to Pawlenty's approach of borrowing against future state revenue to generate almost $1 billion. It's possible a scaled-back version could be part of a final agreement.

In a letter to top lawmakers, Pawlenty offered to cut his borrowing plan in half and to agree to a larger amount of deferred education spending that wouldn't appear on the books during this budget period. He also said he would divert $250 million he wanted in a reserve account to the general budget.

"While I offer these ideas in the spirit of compromise, I want to be clear that I will continue to oppose tax increases," Pawlenty wrote.

House Speaker Margaret Anderson Kelliher, DFL-Minneapolis, responded to the letter in a brief message on her Twitter account. "Governor's letter a compromise? Compromise in word only, doesn't balance the budget. Not a responsible plan," she wrote.

Late Monday at a meeting of the Legislative Commission on Planning and Fiscal Policy, Kelliher said Democrats don't plan to send Pawlenty any new proposals to bring in revenue. She also said negotiators working on the biggest area of state spending, K-12 education, are putting together a bill that would avoid both cuts and the state payment deferral.

Earlier, she said an override attempt on the tax-for-spending trade-off bill wouldn't happen until later in the week, if that vote occurs at all. It would take Republican defections for an override to succeed. Democrats have a two-thirds majority in the Senate but are a few seats short of that constitutional threshold in the House.

House Minority Leader Marty Seifert, R-Marshall, has predicted his 47 members would hang together on an override vote. He said the governor's new offer "accommodates the Democrats somewhat so they're not total losers in this discussion."

The Senate voted 45-19 along party lines for the lights-on bill, with Republicans saying it sends the wrong message when the pressure should be on to finish. The legislation would continue funding at current levels for a year, which is more than most agencies would get under the budget cuts being approved by the Legislature.

Lawmakers are moving ahead without a big-picture deal. Both houses passed a health and welfare package that trims $500 million from prior state obligations. Pawlenty had pushed for cuts three times as large.

The bill would reduce payments to hospitals by 3 percent -- far less than the governor wanted -- and make it harder for people with disabilities to get personal care assistants to help them in their homes. It holds funding flat for nursing homes but cuts other services for the elderly.

"The other choice is to make the cuts even deeper and to jeopardize even the existence of some of our hospitals," said Rep. Paul Thissen, DFL-Minneapolis.

GOP Rep. Jim Abeler said he signed off on the House-Senate compromise bill and hopes Pawlenty will, too. But other Republicans complained about the level of spending.

"The state continues to make promises it can't keep," said Rep. Laura Brod, R-New Prague.

Human Services Commissioner Cal Ludeman said the reductions weren't deep enough, but added that there's still room for compromise.

A bill paying for courts, prisons and state-level law enforcement cleared the Senate on a 36-30 vote. Its next stop is the House.

The legislation requires the Department of Corrections to cut daily inmate spending by 1 percent, or 89 cents per prisoner per day. It would move all short-term state offenders out of county jails and into state prisons by the end of the year, a change long wanted by counties.

The bill would also raise court fees on everything from subpoenas to wills.

Even top Democrats are less than enthusiastic about the choices before them.

"We're passing bills that none of us like," said Assistant Senate Majority Leader Tarryl Clark, DFL-St. Cloud. "We're passing bills because we have to balance the budget and our constitutional obligation is to provide adequate funding."

Legislators are trying to approve a full budget by midweek to leave time for possible veto overrides over the weekend or next Monday, the final day they can meet in their regular session.

If they fail to pass a complete budget by then, Pawlenty would need to call them back for a special session or risk an interruption of state services when the new budget year starts on July 1.

"This is a mammoth problem," said Senate Taxes Chairman Tom Bakk, DFL-Cook. "Everybody has to be willing to give some ground this week."

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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.)