House, Senate continue to struggle

ST. PAUL -- Talks broke off Friday evening without a compromise budget deal between House and Senate leaders, nudging them closer to no resolution before a midnight Monday session deadline.

Aides to Gov. Jesse Ventura offered a new budget plan, keeping alive hopes they can work out a last-minute deal that might sidestep the need for a special session.

But the two sides reached an impasse and stopped discussions about 6 p.m.

"The last word I got was that it did not look particularly promising," Ventura said an hour later on the public television show "Almanac."

But, he added, "Late game miracles can happen."

Late Thursday, Republicans had rejected a proposed "lights-on scenario," in which lawmakers would pass bills with just enough spending to keep essential services going plus a cost of living increase.

House Speaker Steve Sviggum, R-Kenyon, said members of his caucus were concerned it spent too much money without providing any permanent tax cuts. That left them back at square one, trying to fashion a delicate overall agreement that would satisfy all sides.

On Friday, Sviggum said House Republicans were "very willing" to leave without a deal if they weren't able to secure enough tax relief.

"They say a bad deal is worse than no deal," he said.

At issue is the fundamental philosophical difference between Republicans, who want deep tax cuts and minimal new government spending, and Democrats, who believe some tax cuts should be sacrificed for education, transportation and environmental programs.

Republican leaders said the caucus was seriously considering the governor's latest proposal and they, Senate Majority Leader Roger Moe, DFL-Erskine, and members of Ventura's staff met off and on throughout the day.

Details of Ventura's latest proposal weren't immediately released to the media, but House Republicans said the plan would increase spending in specific programs in exchange for policy changes.

The biggest sticking point of negotiations has been over broad property tax reform -- a major focus of Republicans and Ventura, but not as much of a priority for DFLers.

Sviggum said he was still holding out for policy reform that would include having the state take over the bulk of local school funding and using surplus money to pay for property tax cuts.

Moe said the Legislature does not have time to achieve such a deal this year.

All plans discussed so far include a sales tax rebate of the current surplus to be sent out this summer.

Without an overarching agreement on how much to put toward new spending and tax cuts, the Legislature won't be able to divvy up money for specific programs. Governmental agencies and programs need spending bills to pass before the new fiscal year starts July 1. A tax bill isn't essential because the current rates would just continue if new ones aren't passed.

Even as leaders were presenting the Ventura administration's proposal to rank-and-file members, the governor used his weekly radio program to give them a taste of the wrath they could expect for a year if they left this session without a major agreement.

He painted them as an irresponsible group who spent months meddling in people's private lives by working on bills covering soda pop in schools and Ventura's own outside income pursuits instead of meeting on the budget.