ST. PAUL, Minn. -- A tax deal remained elusive Wednesday night at the State Capitol with only five days left in the 2013 legislative session.
Most of the major spending bills were in limbo, awaiting a tax policy compromise to emerge from a joint House-Senate conference committee. The panel must forge a new bill from the competing tax measures passed separately by the Senate and House.
Negotiators from the House and Senate have been exchanging offers throughout the week, attempting to reach middle ground on competing plans to increase the tax rate on the state's top earners.
The state constitution prohibits lawmakers from meeting after the Monday that follows the third Saturday of May. So, in essence, they must wrap up their work before the clock strikes midnight on the evening of Monday, May 20.
House Majority Leader Erin Murphy told KARE that she's confident the Democratic-controlled legislature remains on track to finish business on time and avoid a special session.
"Every year, I've been here there's always been a flurry of activity near the end, to get a budget deal. There's always pressure and there's some disagreement," Rep. Murphy, a St. Paul Democrat, told KARE.
"People hear about that disagreement, and it looks like we're going to go off the tracks. But we're not. We're still on track."
Republicans were openly harboring doubt about that assessment.
"I'm not quite sure logistically how we get this done," Rep. Greg Davids, a Republican from Preston told KARE.
"Here we are on Wednesday afternoon and we have not had any of the major conference committee reports on the budget bills," he said, referring to the legislative term used for compromise measures produced by the conference committees.
The Senate pulled an all-nighter from Tuesday night into Wednesday morning debating a bill that would allow home-based child care providers to form a union.
The bill passed after a 17-hour debate, and Davids said House Republicans were fully capable of beating that mark when the unionization bill arrives in the House in a few days.
"We have twice as many members and we will put the plow down. It's like a 10 bottom plow on a John Deere Bean. You know what happens when they start going that way. The Deere Bean is going to go poof!"
That's a Republican farmer's way of saying that Democrats will be forced to give up precious time if they take up a controversial policy bill in the waning days of the legislature, one without much short-term bearing on the state's budget.
Tax bill negotiations
Democrats, who control the legislature, are seeking to raise enough new revenue to finance permanent spending increases for schools and higher education and to provide property tax relief.
The latest offer from the House side would raise income taxes on those joint filers who make more than $250,000 in taxable income, after deductions and credits, or roughly the top two percent of earners.
The higher rate or 8.84 percent would only apply to income earned above that $250,000 mark. The portion of their income below that would be taxed at the current rate, which tops out at 7.85 percent.
But lawmakers also mindful of how Minnesota's top income tax rate compare to tax rates imposed in other states across the nation.
As of Wednesday evening, House negotiators were sticking to the idea of imposing a temporary income tax surcharge on those couples who earn more than $500,000 per year.
That revenue would be dedicated to repaying $860 million in IOUs the state issued to local school districts in the past decade. The legislature was able to avoid deficits by delaying a portion of payments to school districts, but that is debt still on the state's books.
An array of other tax hikes are also still on the table, for cigarettes, alcohol and sports memorabilia.
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