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Legislature begins its main job: balancing budget

ST. PAUL - Legislators arrived at the Minnesota Capitol in early January with five months to fix a multi-billion-dollar budget deficit.

Now, lawmakers are staring at the same massive budget problem and a deadline just three weeks out. And no one knows how the problem will be fixed.

Much of the Legislature's heavy-lifting always occurs in the session's final weeks - or, more accurately, days - as lawmakers scramble to pass a new two-year state budget, erasing a projected $4.6 billion deficit by the constitutional May 18 adjournment date.

"With three-and-a-half weeks left in session, I think it's time for us to get realistic," said House Minority Leader Marty Seifert, R-Marshall, who said Democrats are wasting valuable time by advancing bills that raise taxes against Gov. Tim Pawlenty's very strong objection.

Key players in end-of-session negotiations say they still do not know where the common ground will be between Pawlenty, who opposes any state tax increases to solve the budget deficit, and a Democrat-controlled Legislature that uses income and other tax increases to pay for much of its budget plans.

All budget proposals rely on federal funds to solve a third of the budget problem and spending cuts to handle another third, but the DFL also proposes tax increases while the governor suggests using borrowed funds instead.

Senate Majority Leader Larry Pogemiller, DFL-Minneapolis, said that in the end his caucus may not insist on income tax increases, but said Pawlenty has not offered a plan that balances the budget over four years, as law requires.

"We're not wedded to anything other than a balanced budget," Pogemiller said.

But Pogemiller and many other Democrats strongly object the Pawlenty's proposal to borrow money to gain state operating funds.

The House and Senate have passed many of their spending bills - including education, public safety, environment and agriculture - while massive health-care budget bills and the tax proposals are headed to final votes.

Hours-long House and Senate floor sessions of recent days soon will be replaced by even longer meetings of legislative negotiators who will begin to reconcile competing finance proposals.

Lawmakers face a May 7 deadline to complete those conference committee proposals. The negotiated deals then would face final House and Senate floor votes before being sent to Pawlenty.

Seifert, the top House Republican, said that those proposals - Senate Democrat's $2.2 billion income tax hike and House DFLers' $1.5 billion increase of several taxes - will be vetoed by the governor and GOP lawmakers will uphold the veto.

Legislative leaders say they plan to conduct end-of-session budget discussions in public, but in past years budget agreements only are reached after Pawlenty and top lawmakers meet behind closed doors.

Those talks have not started. House Speaker Margaret Anderson, DFL-Minneapolis, said she believes Pawlenty wants to reach a budget deal, but he has taken a stubborn position on taxes.

"As we look at that, we really need to focus on where the similarities are, how big the differences are and then get to work on the problem," House Speaker Margaret Anderson Kelliher, DFL-Minneapolis, said.

Kelliher said legislative staff members fear the session will not end on time, sending it into a special summer session.

The tax question, in particular, will be difficult. First, the House and Senate must reconcile their far different ways to raise taxes. And the House makes several reforms in tax laws while the Senate does not.

Even if Democrats who control the House and Senate can find a tax compromise, there remains no clear way to compromise with Pawlenty.

The GOP governor told a Minnesota Chamber of Commerce audience Friday that he is hopeful the budget will be settled by the Legislature's constitutional adjournment date.

"We're going to work hard to try to end in a constructive and timely manner," he said. "There's plenty of time to do it."

Pawlenty said policymakers' budget priorities will not change from May to June, when in past years special legislative sessions have been held to reach budget deals.

"Whatever those differences are, we might as well bring them to a head and get it reconciled now," he said.