Minnesota political leaders fish for a budget deal as end of session looms

Minn. leaders fish for budget deal as clock ticks

ST. PAUL, Minn. — Minnesota’s legislative session slogged toward a weekend finale Friday without the deal to close a $3 billion deficit that’s needed to actually finish the job.

Both the House and Senate wrapped up floor sessions Friday evening without a budget accord, increasing the chances for an up-to-the-deadline sprint. They have until midnight Sunday to complete their work or they could wind up in a limitless special session.

Republican Gov. Tim Pawlenty was 300 miles away from the Legislature for the annual Governor’s Fishing Opener in a resort town near the Canadian border.

He spoke Friday night with legislative leaders by conference call, a meeting Democrats said went poorly.

“There was a step backwards,” said House Majority Leader Tony Sertich, adding, “They want to say no to everything that’s on the table that the majority parties think is necessary for the end of a successful session.”

Republicans were less pessimistic. Senate Minority Leader Dave Senjem said a deal was still possible. “Nobody has walked away. Nobody has blinked,” he said.

House Speaker Margaret Anderson Kelliher said she would request Pawlenty’s return to St. Paul after his early morning fishing outing Saturday.

Some lawmakers were frustrated by the governor’s absence at a critical point in the session.

“I don’t know how you can leave the house when the house is burning,” said Sen. David Tomassoni, a Democrat from Chisholm. “The guy that is supposed to be here should be here.”

Negotiations focused on the deficit and a related piece of health legislation. The health care piece of a potential deal looked shaky Friday, with Pawlenty spokesman Brian McClung and Republican lawmakers raising objections.

“Governor Pawlenty had said he would consider the DFL’s early enrollment proposal. He did and he doesn’t like it,” McClung said after the phone meeting.

Without a deal, Pawlenty might be forced to call a special session to balance the budget.

“No one really wants that as their first choice and so that’s why everyone is working very hard to conclude the session in a timely and orderly way,” Kelliher said.

A collapse in talks would produce huge uncertainty for the state. Pawlenty lacks the power to balance the budget on his own, something he tried to do last year until a court blocked the effort. Minnesota’s available cash is at a worrisome level.

Sertich foresees cascading problems that would lower the state’s credit rating and impair its ability to borrow for previously approved construction projects.

“The governor, as basically our CEO of our state, needs this solution more than we do because he can’t pay the bills if we don’t figure out our cash-flow situation,” Sertich said. “He’s basically overdrawn the state by signing all the spending bills last year and not having money in the bank.”

McClung said Friday that the health care deal sought by Democrats is “problematic” because of how they want to pay for it. He said in an e-mail that legislative Republicans don’t support it, either.

Rep. Matt Dean, R-Dellwood, agreed: “It’s been described as taking home a 3-week-old grizzly bear cub. We just can’t do it. If we can afford it now it’s going to eat us later.”

Democrats are pushing for an early expansion of Medicaid for the poor under the federal health care overhaul. Minnesota is among nearly a dozen states allowed to tap into a pot of federal money to help defray costs for insuring poor, childless adults before the health law takes full effect in 2014.

But Minnesota has to put up additional money to qualify for some of the federal aid.

Pawlenty vetoed the bill that would have accomplished the expansion, citing his opposition to surcharges on hospitals, health insurance plans and group homes to help pay for it. He said he was open to the concept if other financing was found.

Senate Majority Leader Larry Pogemiller, DFL-Minneapolis, said Minnesota stands to get $7.54 in federal aid for every dollar it puts into the program.

The broader budget problem continued to vex top officials. Among the items under discussion was whether to make previously temporary budget cuts permanent and designate money to pay schools back for delayed payments last year.

Depending on how this agreement shakes out, lawmakers will be confronting a budget deficit that could top $5 billion.

Associated Press Writers Martiga Lohn and Briana Bierschbach contributed to this report.