ST. PAUL -- A bill Minnesota representatives passed late Tuesday continues to trim the state's largest spending area, health and human services programs.
The House bill passed 79-54 and cuts health programs, mostly for the state's poorest residents, by some $170 million.
Those cuts come on top of $147 million lawmakers and Gov. Tim Pawlenty cut earlier this year from a related program.
The bill would increase a tax on health maintenance organizations by $87 million and taxes on Minnesota businesses with overseas operations by $55 million.
Pawlenty said he would veto the House bill, in part because of the increased taxes.
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Rep. Tom Huntley, chairman of the House health finance committee, said if his bill were enacted the state will have cut $2 billion in the current two-year budget as lawmakers and Pawlenty struggle to balance the state budget.
At the same time, the Duluth Democrat said, his bill would maintain services many Minnesotans need.
"This bill, I believe, will protect jobs and vulnerable populations," Huntley said.
Much debate on the bill centered on a $55 million provision offered by Rep. Frank Hornstein, DFL-Minneapolis, to increase taxes on many firms that do business overseas, especially in the Caribbean area. The added money would be used to increase payments to nursing homes and other health-care providers.
Before the Hornstein amendment was approved, Rep. Jim Abeler, R-Anoka, said it would ensure that the bill would be vetoed. "It will move us further from resolution."
But Rep. Al Juhnke, DFL-Willmar, said that the provision would allow the Legislature to increase funding to nursing homes and long-term care facilities by 2 percent.
"This hurts nobody," he said. "To insinuate that it does, I believe, is incorrect."
On the other hand, Rep. Dean Urdahl, R-Grove City, said that increasing taxes on businesses would hurt the state economy at a time when more jobs are needed.
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Pawlenty does not like the bill or a similar Senate one.
"The bill is going to be vetoed as soon as it gets to my desk," he promised.
The bill changes a health care program for the poor, known as General Assistance Medical Care, that legislative leaders and Pawlenty thought they fixed earlier this year, saving $147 million.
"The GAMC supposed fix has collapsed," Huntley said.
GAMC provides health care to the poorest Minnesotans who cannot get care elsewhere.
After the Republican governor and Democratic legislators worked out the compromise to keep the program going, all but one hospital rejected it, saying there was not enough money available in the new law to care for the people who need it.
"What we are trying to do is fix that problem," Huntley said.
The fix in the House bill would use a new federal law that allows Minnesota to expand another program to cover GAMC recipients.
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Huntley said GAMC would cost the state $500 million, but the new program would cost $1 billion. If the state comes up with that money, the federal government would give the state another $1 billion, Huntley added.
Leading up to Tuesday's debate, many legislators had complained that the Pawlenty administration would cut programs known as "state operated services," those providing mental health and dental care to the poor.
"We have rejected the governor's cuts to state operated services and the hundreds of layoffs he has proposed," Huntley said.
The House bill includes $9 million that Huntley said would allow services to continue and preserve hundreds of jobs.
Andrew Tellijohn contributed to this story. Tellijohn and Davis report for Forum Communications Co.
