ST.

Wednesday, June 27, 2001

ST. PAUL – The most contentious bill of the session has been, for the most part, wrapped up.

Although the House-Senate conference committee endorsed the $900 million tax relief package late Tuesday night, the Senate reserved the right to hold onto it if the K-12 education committee didn’t finish its work.

"There’s no way there will be a tax bill without an education bill," said Sen. Larry Pogemiller, DFL-Minneapolis, the Senate’s lead tax negotiator.

The K-12 committee finished a battle over the Profile of Learning late Tuesday, leaving members time to work out remaining details on the $8.7 billion spending bill for public schools. The working group expected to work into the morning hours to polish around the edges and vote on the bill.

Pogemiller said if that happened, the tax bill would be ready for a floor vote as planned on Wednesday.

The proposal was offered on Friday by Gov. Jesse Ventura’s administration and accepted by House and Senate leaders. Pogemiller and House Tax Chairman Ron Abrams, R-Minnetonka, made a few minor changes to that bill with the consent of the administration.

If it passes the House and Senate floor, the bill would mean all three sides could declare a victory.

The House would get significant property tax relief and reform. The plan would reduce property taxes, on average, by 24 percent on homes, 25 percent on farmland and apartments and 10 percent on businesses.

The Senate would get what it considers a more stable funding source for education and more money to help property-poor schools keep up with the rest of the state. The bill would establish a new $592 million statewide levy on businesses and would direct some of the proceeds to education.

And the governor would get $250 million on the bottom line as a hedge against a slumping economy, in addition to the structural property tax changes he wanted. And taxpayers would get sales tax rebates again this summer, about $700 million worth.

"I believe that in many respects, this bill is historical and will stand the test of time," Abrams said.

Pogemiller agreed that it was a "great bill with a lot of stuff in it," but said he still had concerns about shifting more of the tax burden from businesses to homes. "History will tell," he added.

Revenue Commissioner Matt Smith said Ventura would be pleased with the final result.

Early on, "I don’t think a whole lot of people probably gave this a good chance of happening," Smith said.

Abrams and Pogemiller both pledged to guard the bill against any floor amendments that hadn’t been agreed to by both sides.