Faced with a certain veto of their major tax bills and little agreement among themselves, House and Senate DFL leaders took opponents by surprise on Thursday evening with a brand-new bill that may raise $1 billion from a combination of taxes on cigarettes, alcohol and lofty incomes.
No one knows for sure how much the bill would raise or where it would come from -- because the bill itself had only blank spaces where the numbers should go.
"I've never seen anything like this," marveled House Minority Leader Marty Seifert, moments after the bill passed the Senate. "It has all blanks in it."
In the course of a single day, the bill, which had been a small, technical measure for the Revenue Department, morphed into a major vehicle for resolving a $1 billion dispute among Gov. Tim Pawlenty and the House and Senate.
Senate Taxes Committee Chairman Tom Bakk, who steered the bill to passage by a 43-23 Senate vote, said it was constructed as a "framework" that would tap undetermined taxes to fund K-12 schools and health and human services -- the two most costly areas of state government.
Leaders in both chambers rammed the bill through over the indignant objections of Republicans. After a House debate marked by outright anger, members voted 117-0 to send the bill to a conference committee that began deliberations Thursday night on reconstructing 70 percent of the state's budget.
"This is a sham. This is a charade. ... I was not sent here to play these games," said Rep. Mark Buesgens, R-Jordan, who was among a handful of Republican legislators who refused to vote.
House Taxes Committee Chairwoman Ann Lenczewski, DFL-Bloomington, said the conferees would spend the night filling in the blanks and could present a finished product to the Legislature within a day or two.
Brian McClung, Pawlenty's spokesman, said that DFLers "may have reached new heights of irresponsibility." In addition to trying to increase taxes by "billions of dollars," McClung said, "they are passing bills with blanks in them with 11 days left in the legislative session." Legislators, he said, "should get serious about trying to put a complete budget together."
House and Senate DFLers say they need an alternative to Pawlenty's proposal to raise $1 billion through tobacco appropriation bonds. There is little support for the proposal in the DFL or GOP caucuses and, without that money, cuts would need to be deeper to resolve the state's $4.6 billion budget.
Bakk, DFL-Cook, said that in an earlier meeting, House Speaker Margaret Anderson Kelliher, DFL-Minneapolis, had asked him to choose from a menu of tax increases that had demonstrated public support. On the floor, he said that he and Lenczewski don't want to borrow money to close the deficit and sought an alternative to Pawlenty's bonding proposal.
A recent Star Tribune Minnesota Poll showed that while Minnesotans rejected across-the-board income tax increases, they were more supportive of increases on cigarettes and alcohol and higher income taxes for wealthier Minnesotans.
Thursday night, just before he entered a conference committee on the new bill, Bakk said Kelliher "thinks she can get an override on this and bring the session to conclusion on time." "I don't think so," he said, but he added, "if we don't get this, we're looking at a lot more cuts."
The House and Senate have struggled to build support for the larger and broader tax increases they passed earlier in the session. Both the House's $1.5 billion tax bill and the Senate's $2.2 billion proposal barely passed and had little chance of overriding a gubernatorial veto.
Thursday's maneuver left Republicans gasping with outrage. They accused Pogemiller and Kelliher of scheming to dictate the tax bill themselves (Kelliher denied she planned to sit on the conference committee).
"This is unprecedented," Buesgens said when confronted with the vastly changed bill. "We are looking at a process here that is an abomination."
But Senate Majority Leader Larry Pogemiller, DFL-Minneapolis, said the bill provided "a vehicle" for compromise and a budget solution.
The House and Senate have reached agreement on smaller bills, but the major pieces needed to end the session and seal a budget -- education, health and human services and taxes -- have remained elusive. On Thursday evening, Pawlenty issued his first veto of the year, rejecting an economic development budget bill that included forgiveness of $32 million the city of St. Paul owes on a loan for the Xcel Energy Center.
How the new bill would resolve those differences is still uncertain. The language adopted by the Senate would grant a specific rate increase for hospitals treating indigent patients and for nursing homes, although the amount is unknown.
The bill would fall far short of the amounts the House and Senate had hoped to raise, but could give them a position that has far more support among the public.
House Republicans said that even if the amounts were smaller, the result would be the same: veto.
"There is no way they will get enough votes on this to override a veto," promised Rep. Michael Beard, R-Shakopee. "No way."
In an earlier news conference, Pawlenty had said that the DFL-led Legislature had dawdled too much time and now might leave themselves with too little time before the May 18 adjournment.
"They had months to plan," he said. "They had months to think about it, and they're going to miss their own deadlines. They may have run out the clock on themselves."
Patricia Lopez • 651-222-1288 Kevin Duchschere • 651-292-0164