In what he said was "the spirit of compromise," Gov. Tim Pawlenty on Monday put out his own alternative to a $1 billion tax increase he's vetoed that would balance the state's budget and close out the session.
But there are no tax increases in Pawlenty's plan. Instead, he offers to cut in half his own proposal to borrow against future state revenues, drain the state's reserve and fill in the gap with the accounting shift proposed by the DFL-led House.
"The proposals noted above would generate $1 billion, which is the level of funding included in the vetoed tax bill," Pawlenty wrote in a letter to Senate Majority Leader Larry Pogemiller, DFL-Minneapolis, and House Speaker Margaret Anderson Kelliher, DFL-Minneapolis.
House and Senate DFLers had joined forces on Friday to pass a $1 billion tax bill that would have raised taxes on the wealthy, on alcohol and on credit companies that charged excessive rates. Pawlenty, a Republican, vetoed the bill within hours.
Billions of dollars in spending for the next two years remain in dispute. Pawlenty and majority Democrats haven't reached a broad-ranging budget deal in the face of a mammoth deficit. The $4.6 billion shortfall -- an amount that would be larger without Minnesota-bound federal stimulus money -- is about 13 percent of the total budget.
Democrats and many Republicans are opposed to Pawlenty's approach of borrowing against future state revenue to generate almost $1 billion. It's possible a scaled-back version could be part of a final agreement.
House Speaker Margaret Anderson Kelliher, DFL-Minneapolis, said an override attempt on the tax-for-spending trade-off bill wouldn't happen until later in the week, if that vote occurs at all.
"It's going to be very apparent to people very quickly that what the governor did on Saturday is he vetoed hope," she said. "He vetoed hope for our schools. He vetoed hope for our hospitals. And he vetoed hope for nursing homes around the state."
It would take Republican defections for an override to succeed. Democrats have a two-thirds majority in the Senate but are a few seats short of that constitutional threshold in the House.
"People have shown independence in the past. This might be a time to show independence of the governor -- an independence in favor of their local communities," Kelliher said.
Seifert has predicted his 47 members would hang together on an override vote.
Lawmakers are moving ahead without a big-picture deal. They are expected to vote Monday on health and welfare package that trims $500 million from prior state obligations. Pawlenty had pushed for cuts three times as large.
"The reduction level is not deep enough," said Human Services Commissioner Cal Ludeman, adding that there was still room for compromise. "We have a whole week to get this figured out."
A bill paying for courts, prisons and state-level law enforcement is also headed toward a vote.
Legislators are trying to approve a full budget by midweek to leave time for possible veto overrides over the weekend or next Monday, the final day they can meet in their regular session.
If they fail to pass a complete budget by then, Pawlenty would need to call them back for a special session or risk an interruption of state services when the new budget year starts on July 1.
"This is a mammoth problem," said Senate Taxes Chairman Tom Bakk, DFL-Cook. "Everybody has to be willing to give some ground this week."
The Associated Press contributed to this report.
Patricia Lopez • 651-222-1288