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Tax-tradeoff proposal headed for votes today
The House and Senate will vote on a tax plan to trade higher income taxes for reduced property taxes.
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In an attempt to break a House-Senate logjam on taxes, the Senate Taxes Committee on Wednesday endorsed the House plan to trade an income tax increase for property tax relief.
Put on a fast track, the bill is scheduled for votes in both the Senate and House today and could land on Gov. Tim Pawlenty's desk by Friday. Pawlenty has said he would veto any income tax increase.
But House and Senate leaders insisted that Pawlenty would have to carefully consider his next move.
"He'll have to think long and hard about this," said Speaker Margaret Anderson Kelliher, DFL-Minneapolis. "We do not use this for increased spending. We use it to lower property taxes, which would go up a half-billion dollars under his budget."
Pawlenty has not proposed property tax increases, because that is done through local government and school districts, but property taxes are projected to rise by that much unless there is state aid to offset the increases.
The Senate has resisted the income-tax-for-property-tax proposal until now, preferring to use an income tax increase to fund education.
But Senate Taxes Chairman Tom Bakk, DFL-Cook, said that negotiations "haven't been going too good," and that he was looking for a way to broker a deal.
The House plan would raise $452 million in 2008-09 by raising the state's top income tax rate to 9 percent. House leaders have said that 80 percent of the burden would fall on those Minnesotans who net more than $1 million per year.
The Senate plan would raise the top tax rate to 9.75 percent, using the money entirely for education increases. Because that proposal was in a Senate K-12 bill, tax conferees have been unable to reach agreement on either K-12 or taxes.
Senate Majority Leader Larry Pogemiller, DFL-Minneapolis, said that he supported Bakk's "attempt to break the logjam," but did not say the Senate would withdraw its K-12 income tax proposal.
Legislative leaders were scheduled to meet with Pawlenty this morning for a breakfast and on Wednesday, House leaders, who have made a string of unrewarded concessions, were openly angling for a deal.
Dangling a couple of freshly purchased walleye lures from her lectern, Kelliher told House members, "I'm going to go fishing for a deal to end this session."
Said House Majority Leader Tony Sertich, DFL-Chisholm, "I'm hoping for a good breakfast tomorrow -- and I'm not talking about the scrambled eggs."
Patricia Lopez • 651-222-1288 • plopez@startribune.com
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