Reaction to proposal is mixed

ST. PAUL - Minnesota legislators and lobbyists, Democrats and Republicans huddled over news releases from Gov. Tim Pawlenty's office late Friday afternoon, trying to decide if his proposal could end the 2005 legislative session.

Reaction was mixed, but Pawlenty's offer to boost the tax on a pack of cigarettes produced a near unanimous feeling of hope that a budget stalemate could end.

Lawmakers face a Monday deadline to adjourn, and everyone agrees they cannot complete their work by then. But if Pawlenty's proposal produces serious negotiations, some legislators say they might be able to wrap up their work in a short special session next week.

Sen. Keith Langseth, DFL-Glyndon, said Pawlenty's offer was needed progress to end the Legislature's work.

"I don't particularly like the proposal, but something has to give," Langseth said. "Maybe this is what gives."

Like other Democrats, Langseth said everyone knows the 75-cent-a-pack cigarette fee Pawlenty proposed really is a tax, but the new revenue is something Democrats have wanted. "We better not give him a hard time about it now."

Rep. Paul Marquart, DFL-Dilworth, said Pawlenty's proposal was a good first step toward reaching compromise.

"I'm happy that the governor is realizing we need more revenues to fund those crucial services like education and health care," he said.

Still, Marquart had fun critiquing the proposal.

"Let's just be honest - it's a cigarette tax," he said, laughing.

Now lawmakers have three tax hikes to pick from, Marquart said. Pawlenty is offering a cigarette tax increase, the Republican-controlled House would raise taxes and Senate DFLers proposed an income tax hike on wealthy Minnesotans.

"At least now we're having an honest debate about what we need," Marquart said.

But Marquart isn't convinced Pawlenty's is the best idea. He said he opposes a cigarette tax increase, in part because it is not a deterrent.

"You may not control people's smoking habits," he said.

Marquart also is concerned about what it could do to convenience stores and other businesses in his district near North Dakota. Minnesota smokers could choose to save money by buying cheaper cigarettes across the border, he said.

With Pawlenty's offer, Rep. Morrie Lanning, R-Moorhead, said this may be an example of a plan that's not preferred but is the best one on the table. He praised Pawlenty for moving the negotiations forward.

"We don't have a lot of good, real alternatives to breaking this logjam," Lanning said.

Supporting a cigarette tax hike is not Lanning's first choice, he said, but "if this is what it takes to get us out of here, then yes."

He added: "We have to get something that the governor can sign."

There is a concern for Lanning, though. Like Marquart, he's worried a higher cigarette tax could force smokers in his district to drive the short distance to North Dakota to get their cigarettes.

"It certainly is going to create a border disparity," Lanning said, adding that he is "not happy," but could accept it.

Rep. Al Juhnke, DFL-Willmar, suggested that with Pawlenty embracing a cigarette fee, when it used to be called a tax, maybe the governor could accept a gasoline tax if it is called a "gasoline distribution fee."

Juhnke complained that taxes and fees are merging: "It's a tax - part fee and part tax."

"I'm thrilled the governor is finally coming around to the realization that we have to make adjustments to revenue," Juhnke said.

Rep. Brita Sailer, DFL-Park Rapids, said the Pawlenty plan started out positive. "Page 1 sounded good."

However, the freshman lawmaker has several issues with the proposal. For instance, Sailer and other Democrats have problems with some of Pawlenty's education proposals.

Pawlenty said any budget plan must include a program that moves teacher pay from the current seniority-based system to one based on a teacher's merits. That has not gained DFL support.

Another freshman, Rep. Frank Moe, DFL-Bemidji, gave the plan mild support.

"There are many problems with it, but the fact he came forward with it is a good sign," Moe said. "He acknowledged there is a revenue problem."

Even though he doesn't agree with everything Pawlenty wants, Moe said he could buy into it. "We are all going to have to compromise."

Readers can reach Forum reporter Don Davis at (651) 290-0707 Wente is a reporter for the Red Wing (Minn.) Republican Eagle, a Forum Communications newspaper