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Sen. Rod Skoe of Clearbrook talks Friday about tax provisions being discussed in the Minnesota Senate, where he is Taxes Committee chairman. Don Davis | Forum News Service

Capitol Chatter: Tax debate divides Democrats

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ST. PAUL — Everyone knew taxes would be a prime discussion point this Minnesota legislative session, but it now appears to be less between Democrats and Republicans than among Democrats who control the House, Senate and governor’s office.

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The GOP-DFL split is well known: raise taxes vs. cut taxes. But Democratic-Farmer-Labor divisions are less predictable.

Legislative Democrats appear to agree with Gov. Mark Dayton’s proposal to increase taxes on the richest 2 percent of Minnesotans. Beyond that, there is less agreement.

At the beginning of the year, Dayton wanted to increase sales taxes on goods and services, while lowering the overall rate. That idea fell with a thud, and he abandoned it last month.

Now, Senate Democrats propose something similar and Taxes Chairman Rod Skoe, DFL-Clearbrook, said he expects that to be in a tax bill he will unveil in a couple of weeks.

But Dayton does not plan to revisit his failed proposal.

“The governor has his own tax plan; he has no interest in an expanded sales tax proposal,” Dayton spokeswoman Katharine Tinucci said, stopping short of saying Dayton would veto the concept.

House Speaker Paul Thissen, DFL-Minneapolis, also is not interested in the sales tax.

On the other hand, a House plan to add a two-year income tax surcharge on the richest of the rich — on top of the Dayton tax on the top 2 percent — has little or no support in the Senate or governor’s office.

Democrats need more than $2 billion in new taxes over two years to fund increased spending they want in areas such as education.

“We don’t believe we need any tax increases,” Senate Minority Leader David Hann, R-Eden Prairie, said, citing a $145 million increase above projections in February and March revenues.

Busy time

Legislators have been talking budget since well before the November election, but now they’re are serious.

“It’s only going to get busier,” House Speaker Paul Thissen, DFL-Minneapolis, said.

Monday marks the first day the full House and Senate will debate budget bills. In the Senate, discussion will center on a bill to fund various state agencies, veterans and military programs. The House plans to delve into a jobs bill, including funding economic development programs.

Legislative leaders said they expect to meet every day Monday through Saturday, with all-day sessions possible late in the week.

The state budget is divided among various committees to deal with part of the spending plan. All of those committees are producing their final bills, sending them to the House Ways and Means and Senate Finance committees.

As those two committees wrap up work on each budget area, the bills are sent to the full House and Senate.

The goal is for final initial votes on each budget area by the end of April, giving conference committees time to combine House and Senate versions of the bills with proposals by Gov. Mark Dayton.

The Legislature must adjourn by May 20.

Mayo holding

Mayo Clinic’s dream of getting more than $500 million in state money needed some retooling in recent days as it ran into several roadblocks.

The original plan was for the state to sell bonds to finance $585 million in infrastructure and cultural improvements for Rochester, where Mayo is headquartered. Repayment of the bonds would be financed by taxes that Mayo’s $3 billion expansion is expected to bring in.

It was a complex plan, and could reduce the amount of bonds the state could sell for other projects. So the reworked plan is a bit smaller, less complicated and does not require the state to borrow money.

Senate Tax Chairman Rod Skoe, DFL-Clearbrook, said the revised plan released Thursday is only a partial proposal. He said more work is needed before his committee considers it.

“We are committed to doing this” during the current legislative session, Skoe added.

Too quick work?

Republicans say Democrats have been rushing through major spending bills too fast, not letting them or the public know enough about the bills before committees vote.

Senate Republicans on the public education finance committee were especially upset.

They said they were called to a briefing about the bill Wednesday night. The briefing included a spreadsheet containing budget basics, but GOP senators said Democrats would not allow them to take the spreadsheets out of the room.

Sen. Gary Dahms, R-Redwood Falls, said his first look at the bill itself was 8:30 a.m. Thursday. The committee approved the bill, with no Republican support, at 10 p.m.

That is not enough time to understand all that is in the bill, Dahms and other Republicans said.

Senate Finance Chairman Dick Cohen, DFL-St. Paul, said the education finance committee got a three-hour mid-day break (with the full Senate meeting during some of that time) to examine the bill that would spend $15.6 billion in the next two years, the most of any budget area.

The song sounded much the same in the House.

Rep. Denny McNamara, R-Hastings, said information was tough to find in a measure funding environment, natural resources and agriculture programs “in the 46 hours we have had to look at this bill.” Like Senate Republicans, McNamara there were too many unanswered questions by the time the final committee vote came.

Stadium work expected

There appears growing interest in funding a backup plan to fund a new Vikings stadium this legislative session.

House Speaker Paul Thissen, DFL-Minneapolis, said Friday it would be “prudent” for lawmakers to deal with the funding issue even though he does not think it is mandatory.

The problem arose when electronic pulltabs lawmakers authorized last year produced only a fraction of the state revenue, destined to the stadium, that has been predicted.

Many stadium opponents say it is time to delay stadium work until a better funding source is found. Opponents to that idea say construction planning already is underway, and a delay would cost the state more money.

Some, like stadium bill author Sen. Julie Rosen, R-Fairmont, say e-pulltabs will come around, it just takes time. Others want the Vikings to pay more toward the nearly $1 billion Minneapolis stadium.

Who’s to blame?

Legislative Republicans have unveiled a public relations campaign they call “30 days of wasteful spending.”

The third of 30 planned examples of wasteful spending is $840,000 the state Arts Board used to send artists on “exotic overseas trips” to places such as Bora Bora.

Democrats were all too happy to point out the program was included in the budget Republican legislative majorities passed two years ago.

House Minority Leader Kurt Daudt, R-Crown, admitted the overseas artist program funding came from a GOP-passed bill, but said lawmakers did not specifically approve the Bora Bora provision. He called it “not the best use of tax dollars” and said legislators might need to do a better job of following how the Arts Board spends its money.

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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.
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