Talks intensify as adjournment deadline creeps closer

The outcome of Minnesota's 2007 legislative session was being determined Thursday in a small room off Gov. Tim Pawlenty's office, in closed-door meetings with the shades drawn and even staff members banished.

The governor and top lawmakers were in and out of the room, avoiding banks of cameras stationed outside.

GOP Senate Minority Leader Dave Senjem said early Thursday that they were "miles away" from a breakthrough that would wrap up the session, but at least they were in the same room talking.

"This is eyeball to eyeball," Senjem said, adding, "Everybody in that room realizes we have to rise above the rhetoric and get it done."

Since the session opened in January, Democrats and Republicans have been at odds over the amount of money the state should spend and where to put it.

The final two-year state budget will be in the neighborhood of $35 billion. Lawmakers are weighing how much of that pie to devote to schools, health care for the poor, college financial aid and other government programs.

The Legislature has until midnight Monday to complete its work. If lawmakers blow that constitutional deadline, it would lead to the fifth special session since 2001.

Republican House Minority Leader Marty Seifert said the two sides weren't far apart on spending for schools although they disagree on how to distribute the cash. Senate Democrats want to pump more money into special education programs, while Republicans are holding out for a bigger increase in the across-the-board school funding formula.

Spending on health and welfare programs appeared to be the biggest sticking point. Seifert, R-Marshall, said Republicans can't accept increased welfare eligibility and changes in work rules, but it's unclear whether Senate Democrats would give up their proposals.

Seifert predicted that some high-profile proposals including an outdoors funding amendment, medical marijuana and changes to make it easier for consumers to sue insurance companies might not pass this year, since lawmakers will probably need all their remaining time to finish a budget.

DFL House Speaker Margaret Anderson Kelliher and DFL Senate Majority Leader Larry Pogemiller wouldn't talk about details, but both said they were hopeful about an on-time finish.

"We by and large have a framework possibly that could end the session," Pogemiller said.

Negotiations haven't touched on the issue of new revenue yet, Seifert and Senjem said.

Pawlenty has insisted that the budget be built using projected tax collections under current law. State finance officials said in February that the treasury would run a $2.1 billion surplus, but Democrats note that at least half of that money would be chewed up by inflationary increases in existing programs and another big chunk is considered one-time revenue.

To offset extra school spending and homeowner property tax breaks, the House and Senate approved bills that would raise income taxes on top earners and eliminate tax shelters used by companies with overseas operations. Pawlenty vetoed the income tax proposal and has been cool to the business tax change.

Seifert said both sides are looking at what they can give up, both in spending and policy.

The House delayed action on a slate of budget bills that cleared the Senate on Wednesday.

Majority Senate Democrats muscled through the package in five parts, drawing some votes from Republicans in the process. But Seifert said DFL leaders agreed to pull those bills back and work out bills Pawlenty would sign. The governor had vetoed an earlier round of DFL budget plans and said he wouldn't hesitate to block another set if lawmakers ignored his priorities.

It's unusual for lawmakers to reach the session's stretch run without a broad budget framework to guide them.

Brian Bakst can be reached at bbakst(at)ap.org. Martiga Lohn may be reached at mlohn(at)ap.org.