The T Word: After House taxes vote, a shutdown showdown?

It’s an empty job, but somebody’s got to do it: This week House and Senate Taxes Committee conferees will begin meeting to reconcile their very different approaches [Senate] [House] to raising new tax revenues as part of the solution to the state’s $4.6 billion budget deficit. And when they’re finished, the package will head to Gov. Tim Pawlenty’s desk for a veto that’s already a foregone conclusion.

Both House and Senate DFLers, it should be said, deserve credit for fashioning solutions to the state’s long-term structural deficit that are more honest and more responsible than the Pawlenty administration’s perennial use of one-time moneys to plug the growing hole. Also more fair, to the extent that the tax increases they’re pushing would fall mainly on the state’s top earners, who now pay a lower share of their income in taxes than any other group in the state according to the 2009 Minnesota Tax Incidence Study [previous PIM item]. Nor should anyone overlook the fact that House and Senate budgets actually made deeper spending cuts than the Pawlenty budget.

But if there are reasons to admire their approach in principle, the practical politics of where they’re headed are another matter.

Saturday night’s 68-65 House floor vote passing that chamber’s tax omnibus laid to rest any lingering pipe dreams of the sort of unified House DFL front that might cause Gov. Tim Pawlenty to think twice before vetoing the DFL-controlled Legislature’s tax increase proposals. On Monday there was some face-saving talk about the close vote from House DFL members who supported the tax bill; they suggested that the 18 DFLers who voted against the bill had been released to do so in order to protect their hold on seats in conservative-to-moderate, electorally close districts.

No doubt there’s an element of truth in that, but it obscures a larger truth that’s been evident all along: There are just too many blue dogs in House DFL ranks to keep the caucus in lockstep on tax hikes. In fact, as Sarah Janecek demonstrated yesterday, fully half of the 18 DFLers who voted against the bill on Saturday won their 2008 races by margins greater than 10 percent–and in three of those cases, by margins greater than 20 percent (Gene Pelowski of Winona, Jeanne Poppe of Austin, and Bev Scalze of Little Canada).

Given the abundance of tax-averse rural and suburban legislators in their caucus, it’s hard to suppose that House DFL leadership ever took the override option seriously. But it’s also hard to discern what their endgame vision may have been if it was not to pursue an override. (The Senate DFL, remember, does possess a veto-proof majority, though whether they could have held the line is an open question; 11 Democrats in that chamber voted against the Senate omnibus tax bill.)

With the override option off the table, two practical choices seem to remain. DFL legislative leaders can stick to their positions through the remainder of the session and the special session that would follow, effectively forcing a game of chicken with Pawlenty over the prospect of a government shutdown when Minneaota’s current fiscal year ends on June 30.

That would seem to be the likeliest outcome at this point. But there’s another, little-noted possibility as well. As one House DFL member told PIM yesterday, there are still those Democrats who would rather cut a last-minute deal to extend legal gaming in the state–specifically, electronic pulltabs–which could yield an estimated $1 billion-plus in tax revenues. But chances are very slim that extended legal gaming would gain traction with DFL leadership.

One Response to “The T Word: After House taxes vote, a shutdown showdown?”

1. Anonymous Says:
   April 30th, 2009 at 9:06 am

   “who now pay a lower share of their income in taxes ”

   If, and only if, you completely ignore Federal taxes. (which you will)