House tax chair to Senate counterpart: We're not close to a deal

After a day of exchanging offers on tax proposals, DFL lawmakers working on the state's tax plan laid bare their differences late Wednesday night.

"We have a handful of hours," said DFL Rep. Ann Lenczewski, DFL-Bloomington, charged with negotiating the details of the tax plan with the Senate and the governor. "We're not close."

"I'm not exactly sure that today has been as productive as it could" have been, said DFL Sen. Rod Skoe, of Clearbrook, Lenczewski's counterpart.

Among the major issues are the rate DFL lawmakers will tax the state's higher earners.

The Senate's latest offer to the House includes a 10.5 percent tax rate on married couples who filed jointly and make $250,000 (and similarly situated singles.) The Minnesota House inched up on their highest rate through successive offers but late Wednesday, House lawmakers said they simply could not approve a rate as high as the Senate proposed.

Rep. Kim Norton, DFL-Rochester, said the Senate's proposed rate was "completely unacceptable" and "dead on arrival." She said the House's late Wednesday willingness to hike the rate near 9 percent did not make her comfortable either.

"In fact I was a little appalled at our last offer," Norton said.

DFL lawmakers also appeared no closer to settling their differences on the cigarette tax. The House, the Senate and the governor all want to raise it but the House has proposed a far greater increase than the other DFL entities say they can absorb.

Skoe said he has long been against the raising a cigarette tax and could barely stomach the Senate's 94 cent increase on the cigarette tax.

"I still think it's a very regressive tax and we should use it in moderation," Skoe said.

Despite some apparent testiness, Lenczewski said at the meeting: "I hope you didn't hear what we're saying as 'we don't like you.'"