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Talks continued into the evening, with just a handful of days left in the 2008 session.
Negotiations were focused on proposals to rein in fast-rising property taxes and cuts made necessary by a $935 million deficit. The main sticking points were how to structure a limit on local property tax increases and how much money to put into municipal aid and homeowner property tax assistance programs.
Democrats gave the Republican governor a proposal for program reductions and a tax break for active-duty Minnesota National Guard troops. House Speaker Margaret Anderson Kelliher said extra money for schools had become part of the talks after both houses approved an education spending bill Tuesday by veto-proof margins.
Kelliher suggested the possibility of override votes later this week, if Pawlenty rejects the school bill and legislation barring implementation of federal Real ID regulations requiring government-approved ID cards. The Real ID bill also passed both houses by wide margins on Tuesday.
“We’d like to have options at this point,” she said during a mid-evening break in talks.
Monday is the Legislature’s mandatory deadline for finishing the session.
Pawlenty spokesman Brian McClung said the property tax discussion was consuming much of the time.
The governor is also insisting that an overall deal include tax breaks for military pay and pensions, McClung said.
“From the governor’s perspective, we think it’s extremely important that we have significant property tax relief, and we believe the best way to do that is to cap property taxes,” McClung told reporters.
Meanwhile, Mall of America officials warned Wednesday that they could delay or scale back a planned $2.1 billion expansion if a package of proposed state-authorized subsidies isn’t reworked before lawmakers close their session.
It poses yet another challenge for political leaders as they try to complete a puzzle that also includes a solution to the $935 million deficit, a property tax relief plan, a modest boost in school funding and a $70 million bond issue for a new light rail transit line.
The mall’s owners balked at a proposal that would generate $370 million in public aid for the project through taxes imposed on retail sales, restaurant tabs and lodging bills in the city of Bloomington. The plan doesn’t allow the mall to divert money from a regional property tax pool as its owners wanted.
“The mall stuck a fork in it,” Pawlenty said.
The project is expected to spark 7,000 construction jobs and just as many permanent positions when completed. The mall would grow by 5.6 million square feet to accommodate new store, hotel, restaurant, theater and office space.
Kurt Hagen, vice president for development for Triple Five Corp., the mall’s owner, said relying solely on city-generated taxes adds too much uncertainty. City leaders would have to sign off on the taxes, but might be reluctant to do so if the burden is solely on them, Hagen said.
“It’s going to be very difficult. At a minimum it’s going to delay the project,” Hagen said. “It’s going to take several months to work through that process. It’s going to be an election issue this fall.”
Without the full subsidy, Hagen said private investors could hold back, possibly resulting in a smaller expansion.
Hagen didn’t publicly offer an alternative proposal. The mall’s past proposals didn’t satisfy top politicians, including Pawlenty.
Pawlenty said he wasn’t sure whether an acceptable package could be put together in the final few days of the session.
“It doesn’t look good and we may have to start from scratch,” he said.
Kelliher said the main elements of the mall package won’t change. “We know the resources are there to build this project,” she said. “In fact, the menu is a little larger than it needs to be.”
Brian Bakst can be reached at bbakst@ap.org. Martiga Lohn can be reached at mlohn@ap.org.
