Tax bill a veto target

By Tim Krohn
The Free Press

MANKATO May 22, 2007 11:21 pm

— MANKATO — The North Mankato sales tax and higher state aid payments to area communities appear doomed as Republican Gov. Tim Pawlenty all but promised on Tuesday to veto the tax bill passed late Monday night.
The governor also said he sees no reason to call a special session of the Legislature.
During a stop in Mankato Tuesday morning, Pawlenty said he expects to veto the tax bill because it contains a provision he told lawmakers would trigger his rejection of the bill.
North Mankato Mayor Gary Zellmer, who attended the news conference held by Pawlenty, was visibly upset by the news.
While he did not say who he thought was at fault for the expected veto, he said politics is getting in the way of good decisions.
“It’s been a long time working on (the sales tax) to have it go down. What’s frustrating is the political games that hurt the citizens. It has to stop,” Zellmer said.
Zellmer talked briefly with Pawlenty telling him the city’s local sales tax approval was in the tax bill and it was a good program that they worked hard to get approved.
“There are a lot of good things in this (bill) that will go down,” Pawlenty told Zellmer.
The tax bill, approved by the DFL-controlled Legislature, provides increases for Local Government Aid that range from 10 to 18 percent for area communities and cities across the state. The increases were meant to make up for cuts to LGA in 2003.
The bill also authorized North Mankato to implement a half-percent local sales tax that would raise about $6 million. The money was earmarked for five projects, including an expansion of the Taylor Library, downtown improvement projects, a Highway 14 interchange, and improvements at Spring Lake and Caswell parks.
Pawlenty said he plans to veto the tax bill because the Legislature added a clause that would require the state to add in inflation when making budget estimates, something the state did until a few years ago.
Adding inflation would cause government spending increases to “Go on automatic pilot,” Pawlenty said.
“They didn’t listen,” said the governor. “I told them it would trigger a veto.”
If Pawlenty vetoes the tax bill, the current tax policy would remain in place.
“I don’t see any reason for a special session,” said the governor, who is the only one who can call lawmakers back to St. Paul.
Zellmer said that if current tax policy continues, cities such as North Mankato will continue to receive the lower level of LGA, which, factoring in inflation, “Would leave us with less than in 2003.”
LGA is used by cities for basic government services. Local officials say that reduced LGA means local property taxes have to rise to make up differences.
The governor has three days to veto bills. He can apply line-item vetoes only to spending items. If he opposes policy bills, such as the tax bill, his only choices are to veto or sign the entire bill.
Pawlenty said he hasn’t had time to go through the other bills approved by the Legislature and was unsure what, if any, line-item vetoes he might level.
Pawlenty said there were several significant bills approved that he expects to sign, including more money for K-12 education, higher education, reform of the states mental health-care system, and a veterans and military aid bill.
“We kept Minnesota’s quality of life,” Pawlenty said.
Overall, the spending bills expected to be signed by the governor increase state spending by 10 percent over the next two years, the exact increase the governor had asked for in his budget request.
There was no transportation bill passed after Pawlenty vetoed a bill and the Legislature was unable to override it. The bill contained a 7 1/2-cent-a-gallon gas tax and surcharge increase, a sales tax hike in the metro area and increases in license tabs.
“They just over-reached,” Pawlenty said of the transportation bill.
Sen. Dick Day, R-Owatonna, who joined Pawlenty on a fly-around of the state Tuesday, said the governor had proposed “a great, $1.7 billion transportation bill with no tax hikes,” that lawmakers should have passed. That proposal relied heavily on bonding.

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