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Senate approves tax hike for tax cut

ST. PAUL - Two young girls were skipping rope just down the street from 1006 Summit Ave. in St. Paul.

They were laughing during their Thursday morning playtime, enjoying each other's company.

At 1006, the governor's official residence, Democratic-Farmer-Labor Party legislative leaders downed French toast, bacon, fresh fruit and other breakfast foods with Republican Gov. Tim Pawlenty, apparently getting along as well as the little girls.

However, four hours later senators threw a political spitball at Pawlenty in passing a property tax relief bill funded by higher income taxes on the state's richest citizens, a bill the governor vows to veto.

On a 35-31 vote, the Senate approved a property tax proposal written by Rep. Paul Marquart, DFL-Dilworth. The vote sent it back to the House, which could approve the measure and send it directly to Pawlenty.

"This sincerely is an effort to provide meaningful property tax relief to homeowners," said Sen. Tom Bakk, DFL-Cook, the Senate tax chairman who on Wednesday amended Marquart's proposal onto a minor tax bill.

Bakk said tax bills earlier passed by representatives and senators are being considered by negotiators, but hinted those talks may not work out. As a back-up, he brought up the new bill, which would "supercharge" an existing property tax refund to give Minnesotans more than $200 million in bigger refunds in the next two years.

The bill would raise $452 million by adding a fourth tier to the state income tax, charging couples who earn $400,000 or more a year 9 percent.

That money would be split between the bigger refunds and going to schools in an effort to lower property taxes.

A few Democrats, including Sen. Dan Skogen of Hewitt, joined Republican senators in opposing the bill.

"This looks like a disincentive for hard work," Sen. Julianne Ortman, R-Chanhassen, said, because it would raise taxes wealthy pay and does not give them property tax breaks that poorer Minnesotans would get.

"This is the Minnesota mistake," Ortman said.

But, Bakk said, those not as wealthy need help because "they are working their tails off to keep up."

Added Sen. Mary Olson, DFL-Bemidji: "The tax cuts in recent years have tended to favor those in the higher income levels."

Thursday's bill helps make taxes fairer, she added.

With a May 21 legislative adjournment deadline looming, some lawmakers are getting nervous about finishing their work.

"It is May 10 and we are taking more time on the floor of the Senate talking about a bill the governor will veto," Sen. Geoff Michel, R-Edina, said. "We are not even sending something to the governor that he can consider."

Legislative leaders leaving the governor's breakfast did not seem concerned about missing their May 21 deadline.

"I feel we are making progress," House Speaker Margaret Anderson Kelliher, DFL-Minneapolis, said. "No decisions were made."

The DFL leaders and a Pawlenty spokesman said most of the meeting dealt with the process of how to wrap up work this session. They said they did not discuss issues.

Pawlenty has vetoed five major funding bills, and signed three. The public education bill remains in House-Senate negotiations, as does the broad tax bill.

In coming days, the House and Senate are expected to approve a transportation funding bill, also destined for a Pawlenty veto.

Kelliher and Assistant Senate Majority Leader Tarryl Clark, DFL-St. Cloud, said they and the governor had not discussed how to prepare new bills to replace vetoed ones.

"We are going to continue working together," Clark said.


Here is how local senators voted on the property tax relief bill:

Thomas Bakk, DFL-Cook, yes

Steve Dille, R-Dassel, no

Michelle Fischbach R-Paynesville, no

Dennis Frederickson, R-New Ulm, no

Joe Gimse, R-Willmar, no

Bill Ingebrigtsen, R-Alexandria, no

Gary Kubly, DFL-Granite Falls, yes

Keith Langseth, DFL-Glyndon, yes

Tony Lourey, DFL-Kerrick, yes

Steve Murphy, DFL-Red Wing, yes

Mary Olson, DFL-Bemidji, yes

Pat Pariseau, R-Farmington, no

Kathy Saltzman, DFL-Woodbury, no

Tom Saxhaug, DFL-Grand Rapids, yes

Katie Sieben, DFL-Cottage Grove, yes

Rod Skoe, DFL-Clearbrook, yes

Dan Skogen, DFL-Hewitt, no

Yvonne Prettner Solon, DFL-Duluth, yes

LeRoy Stumpf, DFL-Plummer, absent

David Tomassoni, DFL-Chisholm, yes

Ray Vandeveer, R-Forest Lake, no

Jim Vickerman, DFL-Tracy, yes

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.