The Free Press, Mankato, MN

State, national news

May 19, 2013

Minn. lawmakers take budget debate down to wire

(Continued)

Debate on the controversial measure could be broken up throughout Sunday and into Monday, as the House shifts back onto budget bills. The biggest budget debate is likely to be on the tax bill, which negotiators finalized late Saturday.

The bill raises Minnesota's tax rates for the first time in years, but in a targeted way. Smokers would pay $1.60 more per pack of cigarettes and for cigars. The top two percent of wage earners would pay two percentage points more on a slice of their income once it reaches $250,000 for couples and $150,000 for singles. Corporations would get fewer tax write-offs. And some businesses would pay sales tax on transactions they didn't have to before.

But the sprawling bill also contained hope of property tax breaks. Cities and counties won't have to pay sales taxes on purchases for the first time in decades. In exchange for more state money, cities and counties would be required to tamp down property taxes. A one-year levy limit would be imposed. Except in rare cases, new local levies will be held to three percent or less. Many cities could have to freeze their tax rates.

A bill providing money to operate several state agencies was the last to come together. Heading into negotiations, the Senate was pushing for raises for agency managers and elected officials, with the governor being permitted to adjust commissioners' salaries.

Top lawmakers were still searching for a way to assemble a slimmed-down construction projects bill that would include renovation funding for the state Capitol. On Friday, the House defeated an $800 million bill, and Republicans argued it was too large. Republican buy-in is necessary because the bill requires three-fifths majorities to pass, beyond what Democratic House and Senate majorities can muster alone.

A pared-back measure could be limited to the $109 million for the Capitol makeover, some disaster recovery assistance, matching money for a new Minneapolis Veterans home building and other projects deemed critical.

Another question mark was a bill to boost the minimum wage. House Democrats were pressing to lift the floor wage to $9.50 by 2015, but the Senate passed legislation topping out at $7.75.

Senate Majority Leader Tom Bakk, DFL-Cook, said he was hopeful the chambers could find middle ground, but indicated his members would only move so far.

"I don't see a path in the Senate to get above $8 per hour," Bakk said.

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