No deal yet on property tax relief or spending cuts
Budget talks between the Democrats who control the Legislature and Republican Gov. Tim Pawlenty resumed Thursday morning at the state Capitol.
House Speaker Margaret Anderson Kelliher went into the meeting saying she is maintaining an "open mind and a feeling of optimism" about reaching a deal.
The legislative leaders and the governor are trying to close a $935 million budget gap and give homeowners relief from rising property taxes.
The Legislature faces a mandatory Monday deadline to finish its business. "The pressure is on us, obviously," said Senate Minority Leader David Senjem, R-Rochester.
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The main sticking points are 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.
The two sides are also divided on about $100 million worth of spending cuts and revenue to cover the deficit.
Senjem said the DFLers have "four or five poison pills in the deal for us," including reductions in a scholarship program, changes to health care policy and a proposed cap on property taxes.
Wednesday's talks ended for the night after Democrats proposed capping property tax increases at 5.5 percent, combined with some direct help to homeowners and aid to cities and counties.
Kelliher called the offer a valid attempt at compromise, but Pawlenty spokesman Brian McClung said the property tax cap did not go far enough. Pawlenty has sought to limit tax increases to 3 percent a year.
Democrats also offered a $103 million list of program cuts, fee hikes, reserves and a hospital payment shift to address the last part of the deficit still separating the two sides. McClung said many items on the list were "problematic."
The two sides also discussed military tax breaks and extra aid for schools.
Kelliher has suggested the possibility of override votes later this week if Pawlenty rejects an education spending package and legislation barring the implementation of federal Real ID regulations requiring government-approved ID cards. Both bills passed both houses of the Legislature by veto-proof margins.
