Senators pass tax bill following uncertainty
ST. PAUL - Minnesota senators passed a tax plan 35-31 Monday -- eventually.
It took two tries, but they moved the bill forward, nearly two hours after it initially failed 34-32 with seven Democrats voting no.The second vote set the stage for legislative leaders and Gov. Mark Dayton to hammer out a final budget plan.
The Senate tax bill, sponsored by Sen. Rod Skoe, DFL-Clearbrook, would raise income taxes on the top bracket. It also would lower the sales tax rate to 6 percent while expanding what is taxed to more items such as clothing, auto repairs and digital downloads. It includes a cigarette tax increase of 94 cents per pack.
"Some people pay more and some people pay less, but you do better in the end," Skoe said. "Reform isn't easy."
All but one Republican, Sen. Dave Senjem of Rochester, voted against the plan. Five Democrats joined them.
Sen. Greg Clausen, DFL-Apple Valley, and Sen. John Hoffman, DFL-Champlin, originally voted no but switched to support the bill the second time.
The income tax change, which raises the top rate from 7.85 percent to 9.4 percent, was a key concern for Sen. Susan Kent of Woodbury, one of the Democrats who voted against the bill both times.
She said there are good pieces of the plan, but that change is a concern for her constituents.
"It's about my district," she said.
Most of the DFL lawmakers who voted against the plan come from suburban Twin Cities areas.
"There is a lot of mutual respect for the fact that we do represent diverse districts," Kent said of Democrats.
The initial tax vote was one of the most dramatic in recent years as the vote remained tight for about 10 minutes, with several senators not voting and others switching from yes to no or vice versa.
As Senate President Sandra Pappas, DFL-St. Paul, ordered voting to end, three Republicans who were voting "yes" quickly changed to "no" and the bill failed.
Senate Majority Leader Tom Bakk, DFL-Cook, immediately called a private meeting of his members in a room just off the Senate chambers.
After senators voted to reconsider the vote, Pappas told colleagues that she jumped the gun in closing the vote. Sen. Ann Rest, DFL-New Hope, said she was "stunned" that Pappas ended the vote because she had not yet pushed her voting button.
Bakk said that in the DFL meeting he did not twist arms, only explained that they had voted for spending bills and now it was time to vote to raise taxes to support that spending.
Kent said she was not pressured to change her mind.
"There were no screws being tightened," she said.
The tax bill "always is a hard vote," Bakk said.
Minnesota tax plans vary
The Minnesota House, Senate and governor's tax plans vary in how they raise funds to cover a $627 million projected deficit and new investments. Here are some highlights from the three plans and how they compare:
Income taxes: Senate, raise third tier rate from 7.85 percent to 9.4 percent; House,new fourth tier, 8.49 percent for couples making more than $400,000 a year in taxable income, temporary surcharge on couples' income more than $500,000; governor, new fourth tier, 9.85 percent for couples making more than $250,000
Sales tax: Senate, lower from 6.875 percent to 6 percent, tax more items including clothing; House, no change; governor, no change
Alcohol tax: Senate, no change; House, increase at wholesale level, about 7 cents per drink for consumers; governor, no change
Cigarette tax increase from current $1.23 per pack: Senate, 94 cents; House, $1.60; governor, 94 cents