Minnesota needs both tax, transportation bills from Legislature

Now comes the test of divided government at the Minnesota Capitol. In the next three weeks, the 2015 Legislature is constitutionally obliged to bridge yawning partisan differences over the 2016-17 state budget and recess for the year by midnight May 18.

Failure to do so would require a special session and call into question the competence of elected officials blessed with a forecast $1.87 billion surplus in the coming biennium. It would also cause a costly headache for managers of the Capitol's reconstruction. Their plans call for the building to be vacated by June 1.

Worry about the size of the task confronting House Republican and Senate DFL majorities intensified with Monday's release of the Senate tax bill. Weighing in at $170 million over two years in assorted tax reductions, mostly aimed at businesses, and $65 million in increased aid to local governments, it's a far leaner bill than the one crafted by House Republicans. The House version tips the scales at $2 billion over the next two years and includes business tax cuts that would balloon in future years to more than twice that sum.

Those aren't the only bills containing tax differences. Higher gas taxes and license tab fees are prominent features of the Senate's transportation bill and absent from the House's. Those bills head into conference committee this week; the tax bills, by early next week.

Transportation and taxes are already linked in partisan rhetoric, as Republicans fault DFLers for not only skimping on tax relief for average Minnesotans but also being willing to raise their motor fuel costs. They're also linked in a way that has begun to be whispered in Capitol corridors: Neither the tax nor the transportation bill must pass to keep state government operational.

The bills that must become law by July 1 to avert a government shutdown are spending bills — education, human services and assorted state agency funding. No change in tax policy is required to pay for those services. And as previous Legislatures have shown time and again, transportation improvements can be postponed.

But this year, they should not be. Transportation deficiencies are taking too great a toll.

This newspaper prefers a tax bill closer in size to the Senate's than the House's because we favor more spending on both education and human services and a beefier reserve than the House budget affords (See http://tinyurl.com/StarTribune-budget for our recommendations.) We wish the Senate bill included one or both of two breaks for lower-income families with small children proposed by DFL Gov. Mark Dayton. We applaud its inclusion of a $224 million "shift reversal," ending a delay in state aid payments to local governments that had been imposed to help balance the state budget several decades ago. Reverse that shift, and it becomes a hidden budget reserve, available to be applied again the next time the state faces a deficit.