House stakes out position in tax-cut debate

ST. PAUL -- Negotiators have three weeks to draft an ending to the Legislature's tax relief sequel, a considerable chore given the differences among the House, Senate and Gov. Jesse Ventura.

The House staked out its position Monday, voting 85-47 for a plan that includes income tax cuts, a sales tax rebate and other relief totaling $3.2 billion over three years. It is more than twice as costly as the Senate bill. Both differ greatly from that proposed by Ventura, who has only a rebate and license fee cuts on his agenda.

''Three weeks is an eternity. It can't get any more difficult than closing up the session last year,'' said House Majority Leader Tim Pawlenty, recalling deliberations over spending bills and a $2.9 billion tax relief package that kept lawmakers working until midnight of the final day.

The House GOP plan -- which leaders describe as a ''lunch bucket'' tax cut focused on middle-income Minnesotans -- drew criticism from all corners Monday.

House Minority Leader Tom Pugh mocked the GOP slogan and argued that cuts for all three tax brackets skew relief toward the wealthiest Minnesotans and make the package unaffordable in the long haul.

Senate Majority Leader Roger Moe, DFL-Erskine, said the plan uses ''phony money'' from economic projections that are too rosy.

In a letter to House Speaker Steve Sviggum, Ventura called the Republican plan ''reckless'' because it is partly financed with one-time money. The plan depends indirectly on tobacco settlement money and federal welfare funds.

''I would not sign this legislation if it reached my desk out of respect to Minnesota taxpayers,'' he wrote, adding that ''it commits to more than we can afford.''

Through it all, House Republicans stuck behind their proposal for across-the-board tax cuts, which they say will attract new businesses to the state by making the tax system more palatable to employees.

Under the bill, the top and bottom tax brackets would be reduced by one-half a percentage point and the middle bracket would fall three-quarters of a percentage point. Starting at the top, the three new rates would be 7.5 percent, 6.5 percent and 5 percent.

DFLers failed on several attempts to eliminate the top-tier cut, mostly on party-line votes.