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Lawmakers eye deficit: Little progress reported on state budget

Senate Majority Leader Larry Pogemiller and House Speaker Margaret Anderson Kelliher, both Minneapolis Democrats, brief reporters Wednesday night on progress balancing the state budget. Little progress was noted. Pioneer Photo/ Don Davis

ST. PAUL -- Four days remain for Minnesota lawmakers to balance the state budget, but little progress was evident Wednesday night as they debated the second major bill in three days headed to a governor's veto.

Also Wednesday, Gov. Tim Pawlenty bought a fishing license early Wednesday afternoon before this weekend's Governor's Fishing Opener, not hampered by budget-balancing talks. Later, Pawlenty hosted legislative leaders in the day's only high-level negotiations.

"There is not a plan," House Speaker Margaret Anderson Kelliher said upon leaving the talks Wednesday evening. "There are some ideas."

She and Senate Majority Leader Larry Pogemiller, both Minneapolis Democrats, pledged to pass a health-care bill later that night, even though Pawlenty promises to veto it.

Like last year when Pawlenty vetoed a last-minute tax increase plan, there is no agreement on how to balance a nearly $3 billion budget deficit.

Last summer, Pawlenty cut spending on his own, but last week the Minnesota Supreme Court said his actions were illegal, forcing lawmakers to revisit the $2.5 billion in "unallotment" cuts and fill another $500 million the deficit has grown since then.

On Monday, the Democratic-controlled Legislature passed a budget-balancing bill that contained more than $400 million in tax increases, even after Pawlenty said he would veto it. He vetoed it Tuesday.

On Wednesday, DFL leaders pushed a health-care bill that contains several things Pawlenty does not like, including a variety of surcharges. He also promises to veto that measure, too.

Pawlenty and legislative leaders expect to meet today to further discuss balancing the budget, an issue that so far has produced little specific agreement.

Legislative leaders Wednesday checked with colleagues to determine whether they could accept a budget-balancing plan based on deeper spending cuts than earlier planned. The questions included: how much spending can be cut and whether the cuts should be permanent or temporary.

Also to be decided is how to pay back schools after the state delays $1.7 billion in payments to districts.

Lawmakers were moving toward a plan that looks a lot like the budget-cutting action taken by Pawlenty last summer, which the Supreme Court said would be acceptable with legislative approval.

The State Constitution requires lawmakers to end their 2010 session Monday, although they cannot pass bills after midnight Sunday.

Pawlenty will be at Kabetogama Lake, one of four lakes that make up Voyageurs National Park, in extreme northern Minnesota for the traditional Governor's Fishing Opener this weekend. He said he will be in touch with his office and legislative leaders as needed, and will be an hour plane ride away if needed to wrap up budget talks.

Debate ran late Wednesday on a health-care bill that would tack $166 million of surcharges onto hospitals, long-term care facilities and health maintenance organizations. It also would implement an early part of the federal health-care program promoted by President Barack Obama, a plan that Pawlenty says is too expensive.

The bill also would overturn a law Pawlenty and lawmakers negotiated a little more than a month ago to provide health care to some of the state's poorest residents.

Supporters of the bill said that overall it would save the state $114 million and keep open dental offices serving severely disabled Minnesotans and delay closing some rural mental health facilities.

Sen. Mary Olson, DFL-Bemidji, said Wednesday night the new bill would benefit rural hospitals, both through a formula change and having the former General Assistance Medical Care patients moved into the accelerated federal Medical Assistance program.

Those changes could bring $5 million a year more to North Country Regional Hospital, she said.

Rep. Tom Huntley, DFL-Duluth, said the bill would bring Minnesota $7.45 in federal funds for every $1 in state funds.

Huntley, the House health care finance chairman, urged Pawlenty to set aside his presidential ambitions long enough to deal with the health and human services bill. He said he would negotiate with the governor after the bill passed.

Despite strong words from both sides, House Minority Leader Kurt Zellers, R-Maple Grove, was optimistic Wednesday night: "I think there is a positive solution out there."

Pioneer Political Editor Brad Swenson contributed to this story. Don Davis works for Forum Communications Co., which owns the Bemidji Pioneer.