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A mutually agreeable plan to blunt property tax hikes around the state proved elusive. It is considered the key ingredient to a broader budget deal and an orderly finish to the election-year session.
Uncertainty revolved around the effect of a property tax cap on local governments, said Senate Taxes Committee Chairman Tom Bakk, who was waiting for Gov. Tim Pawlenty's Revenue Department to provide more data on various tax cap scenarios. Bakk, DFL-Cook, said lawmakers must be careful when restricting tax money to cities and counties because public safety is one of their major responsiblities.
Bakk said a tax compromise is still within reach. He said the Republican governor needs to do something about the increase in property taxes during his administration and the state needs the money that would be raised by tightening taxation of companies with foreign operations.
"If the governor really wants one, we'll get there," Bakk said of a compromise.
Pawlenty has been calling the property tax cap the key to a session-ending deal.
Pawlenty spokesman Brian McClung said talks with legislative leaders were set to resume by midday Tuesday. Monday's talks spilled past midnight, capping what DFL House Speaker Margaret Anderson Kelliher said was "a frustrating day" that included hours of waiting for property tax data.
The tax talk has occurred as state leaders also try to mend a budget with a projected $935 million shortfall.
Other items awaiting action in the final week — the session must end by May 19 — were a proposal to send more money to schools and a subsidy package for the Mall of America.
The Democrat-controlled House started debate on a bill that would send an additional $51 per student to public school districts around the state, even as Republican Minority Leader Marty Seifert urged Democrats to wait until they get an overall agreement with Pawlenty.
Schools would get the extra money on a one-time basis. The bill also seeks to freeze a Pawlenty-pushed program that gives more money to school districts that adopt performance-pay contracts for teachers.
Behind closed doors Monday, top legislators and administration officials tried to fashion a limit on increases in city- and county-approved property taxes. They also debated whether to provide millions more to local governments to pay for police, fire and other municipal services. And the House continued to push for the state to absorb a greater share of property taxes for some homeowners.
The Legislature stood ready to authorize the city of Bloomington to raise a menu of sales, lodging and restaurant taxes to help subsidize a $2.1 billion Mall of America expansion. The mall's owners first would have to open their books to prove a need the public dollars.
Lawmakers sent Pawlenty a bill changing health care policies. The bill rewards providers that stress preventive care, expands publicly subsidized health programs and accelerates the development of electronic transactions in the health field.
Pawlenty has threatened a veto, taking issue with the expansion of the MinnesotaCare health insurance program at a time when medical care is consuming an ever-greater portion of government budgets.
"Throwing more people into a public system is not reform. It's more of the same," said Rep. Laura Brod, R-New Prague.
Rep. Paul Thissen said covering more people will cut down on uncompensated care that now shifts costs to people with private insurance. "We save money when we have people insured and not uninsured or underinsured," he said.
Pawlenty was due to act Tuesday on a batch of bills the Legislature sent him last week.
Among them are an education policy bill that would raise the high school dropout age from 16 to 18 and make hockey the official state sport. Another bill would let state employees take time off to donate blood.
The governor also faces a Thursday deadline to act on a plan raising the minimum wage and another granting local leaders permission to let Twin Cities bars to serve drinks two hours later during the Republican National Convention. He has said he is inclined to veto the wage bill, but expressed support for the bar-hour proposal.
Associated Press writer Martiga Lohn contributed to this report.
