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Lawmakers reach session-ending deal

ST. PAUL - Legislative negotiators and Gov. Tim Pawlenty reached agreement on taxes, health-care reform and state budget-balancing packages early today, but lawmakers missed a self-imposed deadline to finish their work for the year, forcing a sec...

ST. PAUL - Legislative negotiators and Gov. Tim Pawlenty reached agreement on taxes, health-care reform and state budget-balancing packages early today, but lawmakers missed a self-imposed deadline to finish their work for the year, forcing a second-ever Sunday legislative session.

Lawmakers passed a health-care reform bill early today and planned to tackle the remaining bills after 2 p.m. But first, Pawlenty and legislative leaders met behind closed doors before noon to finalize their agreement. A news conference to announce details of the deal was expected this afternoon.

As darkness fell Saturday, the pieces began to fall into place. Health care reform was the first big area where negotiators found compromise, after days of saying they were close in all unresolved areas.

The biggest sticking point to an overall deal was property tax relief, as it has been for days. But in the end, leaders of the two parties agreed to set a limit of 3.9 percent on how much cities larger than 2,500 population, counties and township may raise property taxes the next three years.

How long the property tax cap remains in effect was the main disagreement.


The property tax cap, also known as a levy limit, should save taxpayers $67 million.

At 3:04 a.m. today, a House-Senate conference committee dealing with taxes met to begin working out details of the tax plan. Among its provisions are those increasing Local Government Aid to cities by $40 million and to county aid $20 million.

The agreement provides $130 million in property tax relief, said Rep. Paul Marquart, DFL-Dilworth, the House property tax chairman. The House started the process with $250 million in relief.

The House plan to dramatically increase property tax refund checks by eliminating an income tax deduction for property taxes was dropped from the plan. That proposal to pay Minnesota homeowners $207 million was pared down to $25 million in the legislative leaders-Pawlenty arrangement.

Pawlenty's rural economic development program, known as the Jobs Opportunity Building Zones, was not touched in the tax bill. Several proposals would have eliminated or curtailed the tax-free zone program.

Attempts by some Duluth legislators to require a public referendum on a school facilities plan were dropped.

A proposal to allow Bloomington to help build parking ramps to serve a Mall of America addition was cut back. The agreement allows the city to enact a sales tax on mall sales and a lodging tax across the city to fund the ramps.

Also in the agreement was a plan to settle the state's $935 million budget deficit by a series of program cuts and use of surplus money from various funds. And $109 million to plug the budget hole will come from closing a loophole some companies with operations overseas use to skirt state tax law.


Left unresolved early today was a proposal to buy land to form a state park along Lake Vermilion in northeastern Minnesota. Other public works projects also were being discussed.

The health-reform agreement, passed by the House and Senate with little debate early today, would broaden eligibility for both private and state-subsidized health insurance programs, improve the availability of health care information and begin caring for chronic disease patients differently.

"Given these are tough economic times, we got a little bit of expansion and quite a bit of cost containment," Rep. Tom Huntley, DFL-Duluth, said.

Pawlenty spokesman Brian McClung said the health-care agreement addresses health care cost, quality and access, all of which Pawlenty earlier this year said were needed in a health care reform package.

"This has been something that has seen its share of hurdles and ups and downs, but we think the work product represents some good bipartisan work," McClung said.

The bill would provide health insurance for 12,000 more Minnesotans. It expands eligibly in the state MinnesotaCare insurance program for 7,000 people. An additional 5,000 who meet certain criteria could seek tax credits to buy private insurance.

Huntley said that under the compromise plan, health-care premiums would be 12 percent lower in 2015 than without the bill. Under the origi-nal legislative plan, premiums would have been 20 percent lower, he added.

"The progress that we've made in the area of health care reform is part of the overall package and the overall puzzle that we are assembling here in the final days of the legislative session," McClung said.


Today is the last day lawmakers can pass bills, although they could meet in ceremonial session Monday. However, Democratic legislative leaders plan to fly around the state Monday, making stops in many cities, including Duluth, Bemidji and Moorhead.

For most of Saturday, there appeared no rush to work, even though lawmakers wanted to finish early today.

For instance, the House passed a resolution honoring Norwegian constitution day.

Many legislators spent time in the sun along the Capitol mall, eating at food stands and listening to music to celebrate the state's 150th birthday.

For a time Saturday, Pawlenty was signing autographs instead of bills, and was posing with legislative leaders for photographs instead of negotiating with them.

Most legislators and Pawlenty mingled with Capitol mall visitors. They watched vintage airplanes fly over the Capitol dome and posed for pictures. Senators, awaiting a group photograph on the Capitol steps, chanted "sine die," the term for ending of the two-year legislative session.

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