Gov. Tim Pawlenty has stuck to his call for a cap on property taxes but has moved significantly away from tapping the Health Care Access Fund, as negotiations continue on how to close Minnesota's $936 million budget deficit.
After a weekend of talks, Pawlenty and legislative leaders returned to the bargaining table late Monday afternoon, with legislators providing a new offer.
Over the weekend, Pawlenty again removed the Central Corridor light-rail line and two of his pet projects from his latest offer. But he and DFLers left open the possibility that the Central Corridor and other projects might reemerge, and the light-rail line was part of the DFL counter-offer on Monday.
Tax cap is a 'linchpin'
Pawlenty continued to say that the cap on property taxes is a "linchpin" of any talks.
"The key message we're trying to deliver is that we can't be fiscally irresponsible," he said during a news conference Monday morning. "We can't be adding spending that is unsustainable. We have a tight economy that family and businesses across Minnesota are tightening their belts, and government has to do the same thing."
The DFLers' proposal acknowledged Pawlenty's call for a property tax cap, but they inserted their own version, which includes a levy limit trigger and assurances of local government aid for cities, counties and townships, which DFLers said is necessary to ensure funding of vital local services.
"I think it's fair to say that we are probably down to the heart of the matter," said House Majority Leader Margaret Anderson Kelliher, DFL-Minneapolis. "If the governor must have some form of levy limit, it is very important to a lot of cities and towns and counties to have local government aid, as well as Minnesotans have direct property tax relief based on their ability to pay."
The DFL offer also reinserts bonds for the Central Corridor because of concerns that $450 million in federal money for the project may be in jeopardy without state support.
Pawlenty's most recent budget remedy includes using $48 million from a surplus in the Health Care Access Fund, which finances MinnesotaCare for lower-income workers. That is down markedly from his original proposal to tap it for $250 million. DFLers say the fund should not be used to correct a budget problem.
Both sides now agree to using about $355 million in spending cuts and non-tax revenues. They also have moved closer on how much money to use from tax changes involving foreign operating corporations.
Assistant Senate Majority Leader Tarryl Clark, DFL-St. Cloud, characterized the tone of the weekend negotiations as positive. "There's some outstanding issues here. We've certainly learned from last year that it's not a deal until it's done, but we had a real productive weekend," she said. Mark Brunswick • 651-222-1636