Tension building over deficit as session nears end - Star Tribune

Baird Helgeson and Mike Kaszuba, Star Tribune, May 12, 2010

Education funding compromise might prove a bigger problem to overcome as session nears end.

Legislators locked in the vise grip of the state's $3 billion deficit saw two main tasks Tuesday after Gov. Tim Pawlenty vetoed a DFL balanced-budget proposal that increased income taxes for the state's highest earners.

The easier part could be resolving the roughly $435 million gap between the governor's plan and the DFL proposal.

The real grinder, however, might be satisfying DFL leaders' insistence that the state have a way to pay back Pawlenty's proposed delay of $1.7 billion in K-12 school payments. That deferral makes up the single-largest share of his budget-balancing plan.

The governor, who has built a national reputation as a tax foe, vetoed a tax increase the Democrats hoped would help ensure schools are paid back.

So the challenge is to find a middle path that reconciles the two positions.

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Pawlenty's eager to veto DFL taxes - Star Tribune

Baird Helgeson, Star Tribune, May 11, 2010

The Senate and House passed a plan that includes a $435 million tax increase, and there's the rub.

Despite the promise of a swift gubernatorial veto, the DFL-led Senate and House narrowly passed a budget-balancing package Monday that includes a $435 million income tax increase on higher earners.

The bill adopts most of Republican Gov. Tim Pawlenty's proposed cuts, using the tax increase to bridge the gap. DFL leaders crafted the proposal over the weekend to address the state's $3 billion deficit and hustled it through committees Monday morning. They pushed it through both chambers by nightfall over the heated protest of Republicans and with only shaky support of their own members.

The bill squeaked through the Senate, 34-33, before clearing the House 71-63. All yes votes were cast by DFLers. All Republicans voted against the package, joined by 12 DFLers in the Senate and 16 in the House.

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