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Pawlenty vetoes tax increase

ST. PAUL - Gov. Tim Pawlenty wasted little time before vetoing a nearly $1 billion tax increase early this morning.

The Minnesota House and Senate late Friday passed the tax plan, an alternative to larger tax-raising proposals on the table.

The plan would have created a new, fourth income tax bracket for the wealthiest Minnesotans. It also included an alcohol tax increase and a surtax on credit card companies charging customers more than 15 percent interest.

"The DFL tax bill was like a bucket of leaches on the taxpayers," Pawlenty spokesman Alex Carey said.

The governor vetoed the tax bill "in the car before he left" home at 3 a.m. for the fishing opener, Carey said. The governor warned legislative leaders before the tax plan passed that he planned to veto the bill. He called it "hastily processed and ill-considered."

Democrats who control the House and Senate said the tax increase was an alternative to Pawlenty's plan to borrow $1 billion from future budgets as a way to help close a $4.6 billion budget deficit.

Lawmakers proposed spending the $992 million on public school education, nursing homes and hospitals.

"We need the governor to stop being inflexible to the balanced approach of cuts and revenue that will keep our commitment to our students, hospitals, nursing homes and disabled Minnesotans, while protecting jobs," House Majority Leader Tony Sertich, DFL-Chisholm said in a statement this morning.

Democrats have not ruled out attempting to override the tax veto.

The Legislature faces a May 18 deadline to complete a $33 billion two-year state budget. Pawlenty and legislative leaders have no scheduled budget negotiations.