After Pawlenty veto, House Dems turn to GOP for budget fix

ST. PAUL -- A Democratic-Farmer-Laborite spending cut and tax bill ended up trashed late this morning.

Republican Gov. Tim Pawlenty fulfilled his promise to veto the bill soon after it arrived in his office.

The governor said that he could not accept a new, higher, tax on Minnesota couples who make $200,000 a year. He said about 122,000 taxpayers would be affected with an average $2,800 tax increase.

"It is nonsensical to increase taxes on job providers merely weeks after I signed a bill to provide tax incentives for Minnesota businesses to grow jobs," Pawlenty wrote in a letter explaining his veto. "This behavior sends a confusing and mixed message to companies looking to produce jobs in Minnesota."

Pawlenty long has opposed state tax increases and refused to consider higher taxes as part of an effort to fill a nearly $3 billion budget deficit.

House Speaker Margaret Anderson Kelliher, DFL-Minneapolis, put the next budget-balancing move in the hands of Republicans now that Pawlenty has vetoed the proposal that included an income tax increase of more than $400 million for the richest Minnesotans.

Kelliher said during a Tuesday morning conference call that House leadership planned to feel out House Republicans to see if they have any ideas that could balance the deficit.

"We certainly are looking for if maybe there are those Republicans who have some ideas about what to do," she said. "They certainly are in a place where they have a very strong hand right now."

One suggestion floated late Monday, after the House and Senate passed the budget bill with only DFL support, was that spending cuts for the current budget cycle only could pass. Republican lawmakers had said they wanted permanent cuts that would last beyond the current budget.

There were no talks scheduled between legislators and Pawlenty as both sides grapple with the deficit, although Senate Majority Leader Larry Pogemiller, DFL-Minneapolis, said he wanted to set up a meeting.

The House and Senate both passed bills Monday that included a $445 million tax increase that Pawlenty promised to veto even before debate began.

Kelliher was non-committal when asked if the House would try to override his veto. However, it passed the House well short of the number of votes needed to override.

One issue bogging down negotiations is the need for a new source of revenue to ensure that the $1.7 billion in delayed payments to schools can be paid back.

"The governor is borrowing at an unprecedented rate," the speaker said.

Kelliher did not rule out the need for a special session to deal with the budget issue. But she added there are only a couple of other major bills left to pass and she expects that work to be done by Thursday.

The Legislature must pass all of its bills no later than Sunday, although it can return on Monday for a ceremonial meeting.

Tellijohn and Davis report for Forum Communications Co.

Tags: tim pawlenty, margaret anderson kelliher, news, minnesota, politics, legislature, budget