Politics

ST. PAUL (AP) ― Democrats who control the Legislature and GOP Gov. Tim Pawlenty are trying to piece together a massive Minnesota budget without a breakthrough agreement that would bring closure to the session.

They're up against a May 18 deadline and a deficit that consumes roughly 13 percent of the state's projected two-year budget. The hole would be deeper if not for federal stimulus dollars.

Three minor spending bills that nibble around the edges await Pawlenty's approval, leaving about 97 percent of the budget to resolve. The governor said deals could come soon on spending for public safety initiatives and an agriculture and veterans bill.

Pawlenty said Wednesday he is considering the veto for an economic development package that would erase nearly $33 million worth of a state loan to St. Paul, money that went to build a professional hockey arena a decade ago. He said his office also is exploring whether the provision could be nixed by line-item veto.

"Without resolution of these larger bills the session's got a lot of uncertainty in its future anyhow, but this is a bill that if I veto they could very easily put it back together if they want to," he said between interviews with greater Minnesota radio stations in his office.

Still outstanding are the biggest budget items: K-12 schools, public health care and whether taxes will go up help close the $4.6 billion shortfall.

Top Democrats also took to the radio airwaves to press their case for a mix of spending cuts and tax increases. House Speaker Margaret Anderson Kelliher and Senate Majority Leader Larry Pogemiller said there's still time to make a deal before the constitutional adjournment deadline.

"Nothing's impossible here," said Kelliher, DFL-Minneapolis, on Minnesota Public Radio.

Pogemiller said he expects "very good success" in getting Pawlenty to approve budget bills. Still, he said Democrats are shooting to pass all budget and tax bills by midnight Tuesday, to give them some time to react to potential vetoes.

"If the governor would show a little more flexibility and a little more decisiveness, we could get this job done pretty easily," said Pogemiller, DFL-Minneapolis.

In usual years, top legislators huddle in the governor's office for private talks that lead to an overall budget agreement. But two years ago, those negotiations failed to yield a final deal, and Pawlenty vetoed a tax bill after lawmakers had adjourned for the year.

This year, legislative leaders and the governor have met privately only a few times. Instead, Democrats are using an obscure legislative commission to grill Pawlenty's top finance official, Management and Budget Commissioner Tom Hanson. Those sessions have yet to produce a major breakthrough.

Another such meeting was anticipated later Wednesday.

Meanwhile, Pawlenty met with the heads of legislative finance committees for K-12 education and public safety, and said he was open for more such meetings.

House-Senate conference committees were largely left to their own devices to strike deals.

In one such negotiating panel, a bill that keeps an array of state agencies operating was hung up over spending on technology upgrades. The committee was struggling to come up with more money to replace an antiquated accounting system.

Democratic Rep. Phyllis Kahn, the chief House negotiator, said spending money on computers and software is hard to sell when cuts are coming for programs that serve people directly.

"It's much easier to get emotional about elderly people in nursing homes," said Kahn, of Minneapolis.

Still, Kahn and her counterpart, DFL Sen. Don Betzold of Fridley, said the technology spending matters because it will help state officials enforce tax compliance better. They said a $15 million investment could reap as much as $60 million in uncollected taxes.

Democrats and the governor are far apart on the biggest issues.

Pawlenty is against tax increases proposed in both houses, while legislative DFLers have been cool to his plan to raise $1 billion by borrowing against proceeds of tobacco payments. They're also at odds over how deeply to cut health care programs and whether to raise or reduce spending on schools.

(© 2009 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)