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Interest groups line up against tax provisions

ST. PAUL -- A parade of lobbyists picked apart proposals by House and Senate tax committees Tuesday while others gave the plans their blessings.

Minnesota liquor lobbyists complained that a House provision to raise alcohol taxes could add $2 in tax onto the cost of a 12-pack of beer.

Minnesota-based brewers would get a tax break, but imported drinks would cost an average of 7 cents more.

City leaders praised a provision to simplify and add money to Local Government Aid, a program that provides state funds to cities.

"This is, in our view, a very historic reform," said lobbyist Tim Flaherty of the Coalition of Greater Minnesota Cities.

But Sen. Paul Gazelka, R-Nisswa, complained that the bill would reduce the percentage of LGA going to rural cities.

Flaherty said the formula is fair because it would give LGA to many suburbs that now receive none. But, he added, more money is needed than now is spent on LGA.

"We only support the formula with the additional $80 million," Flaherty said. "To cement this reform into the future, we are going to need to see moderate increases in the future."

Sen. Julianne Ortman, R-Chanhassen, complained that there has been no estimate about the full cost of a proposal to begin taxing clothing, a part of the Senate tax bill. She said if clothing is taxed, fewer people will visit Minnesota -- especially Mall of America -- which would affect other sales such as airline tickets and motel rooms.

Don Davis
Don Davis has been the Forum Communications Minnesota Capitol Bureau chief since 2001, covering state government and politics for two dozen newspapers in the state. Don also blogs at Capital Chatter on Areavoices.