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Tax, budget talks face deadline in St. Paul

ST. PAUL - Property tax and budget-balancing negotiations continue today, with legislative leaders providing no proof of significant progress.

"It would be a good day to resolve it," House Speaker Margaret Anderson Kelliher, DFL-Minneapolis, said as she entered the talks.

Without resolution to outstanding legislative issues today, chances for a smooth end of the 2008 session decrease. Sunday is the final day lawmakers can pass bills, although they can be in session Monday for ceremonial and other purposes.

Talks involve two major items. First, Republican Gov. Tim Pawlenty and Democrats who control the Legislature are discussing ways to limit property tax increases. Second, they are trying to agree on how to fill a $935 million hole in the state budget.

"We are moving a little closer," House Minority Leader Marty Seifert, R-Marshall, said.

The governor wants to limit annual property tax increases local governments can enact to 3.3 percent. Democrats propose a 5.5 percent cap, but with several exceptions that would allow larger increases.

Seifert said a property tax reduction proposal spearheaded by Rep. Paul Marquart, DFL-Dilworth, appears dead for the year. Marquart's plan would eliminate the property tax deduction on the state income tax form, and instead use that money to send checks to people who pay a high percentage of their income to local property taxes.

Those in the closed-door meetings said most talk has been about property taxes. The two sides also are looking into the budget deficit.

However, if legislators and the governor do not agree on the deficit, Pawlenty can take some action to reduce spending on his own. And lawmakers will return to session in January, with six months remaining in the current two-year budget.