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Pawlenty vetoes DFL's budget plan, next budget steps remain in limbo

ST. PAUL - A Democratic-Farmer-Laborite spending cut and tax bill ended up trashed late this morning.

Republican Gov. Tim Pawlenty fulfilled his promise to veto the bill soon after it arrived in his office. His spokesman, Brian McClung, said the measure was vetoed, but the governor's letter explaining his reasons for taking the action would come later.

House Speaker Margaret Anderson Kelliher put the next move in the hands of Republicans now that Pawlenty has vetoed the proposal that included an income tax increase of more than $400 million for the richest Minnesotans.

Kelliher said during a Tuesday morning conference call that House leadership planned to feel out House Republicans to see if they have any ideas that could balance a nearly $3 billion budget deficit.

"We certainly are looking for if maybe there are those Republicans who have some ideas about what to do," she said. "They certainly are in a place where they have a very strong hand right now."

One suggested floated late Monday, after the House and Senate passed the budget will with only DFL support, was that spending cuts for the current budget cycle only could pass. Republican lawmakers had said they wanted permanent cuts that would last beyond the current budget.

There were no talks scheduled between legislators and Pawlenty as both sides grapple with the deficit, although Senate Majority Leader Larry Pogemiller, DFL-Minneapolis, said he wanted to set up a meeting.

The House and Senate both passed bills Monday that included a $445 million tax increase that Pawlenty promised to veto even before debate began.

Kelliher was non-committal when asked if the House would try to override his veto. However, it passed the House well short of the number of votes needed to override a veto.

One issue bogging down negotiations is the need for a new source of revenue to ensure that the $1.7 billion in delayed payments to schools can be paid back.

"The governor is borrowing at an unprecedented rate," the speaker said.

Kelliher did not rule out the need for a special session to deal with the budget issue. But she added there are only a couple of other major bills left to pass and she expects that work to be done by Thursday.

The Legislature must pass all of its bills no later than Sunday, although it can return on Monday for a ceremonial meeting.

Tellijohn and Davis report for Forum Communications Co.