ST. PAUL -- Signs of legislative compromise emerged Thursday as lawmakers agreed on a strategy to approve new funding and Senate leaders made concessions to pass a tax bill that had been rejected.
The Senate voted 37-30 to approve a revised tax bill providing $244 million in permanent property tax relief for homeowners and businesses and closing tax loopholes lawmakers say are used by a small percentage of Minnesota-based corporations.
Passage of the tax deal came after rural DFL senators split from their majority caucus to defeat a similar bill on Wednesday because they worried Greater Minnesota businesses would be hurt by a provision repealing a cap on statewide business property taxes.
Senate Tax Chairman Larry Pogemiller, DFL-Minneapolis, brought his bill back for a floor debate Thursday and the business property tax provision that concerned rural Democrats was repealed.
The tax bill provides $78 million in new state aid for cities this year, Pogemiller said. Local government aid was cut in recent years and rural lawmakers have fought to get that money back because they say communities rely on that funding to provide basic services. The bill also includes tax credits to military families and dairy farmers.
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Senate Majority Leader Dean Johnson said approval of the tax bill was proof the DFL caucus is acting on one of its priorities for the short legislative session.
"That is significant," Johnson, DFL-Willmar, said of the property tax relief.
Senate Republicans voted against the tax bill again Thursday, arguing that the proposed corporate tax changes would hurt companies and the state's business climate.
The House is still debating its own tax bill; some House Republicans are calling for one-time property tax rebate checks.
As senators debated their tax bill, House leaders announced their plan to adopt a Senate strategy to advance a supplemental budget bill in the coming weeks.
The Legislature passed a two-year, $31 billion state budget in 2005. This year lawmakers are making revisions to that budget. Senate leaders have worked on one revised budget bill that includes funding for at least seven areas, including education, health care and the environment.
House Republicans wanted to consider each area's supplemental funding separately. The different approaches were expected to strain House-Senate negotiations.
But on Thursday, House Speaker Steve Sviggum said he agreed to change the House approach to more closely align with the Senate. The Kenyon Republican said the change should help lawmakers avoid a confrontation at the end of the legislative session, which must adjourn by May 22.
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Also, on a party-line 13-10 vote, the GOP-controlled House Rules Committee narrowed the focus of a proposed constitutional amendment to dedicate funding for the outdoors.
If the Legislature passes a proposed outdoors funding amendment, voters would decide the issue when they go to the polls Nov. 7.
