- Associated Press - Sunday, May 22, 2016

ST. PAUL, Minn. (AP) - Minnesota lawmakers scrambled Sunday to finalize their plans for a $900 million budget surplus, rushing to pass tax cuts and spending bills in the final hours of the 2016 session as legislative leaders tried to salvage any hopes of striking a deal on a major transportation funding package.

Lawmakers face a midnight Sunday deadline to pass bills and will likely work up to that point. The Republican-controlled House made the first move on a major piece of legislation, passing 123-10 with overwhelming bipartisan support a $260 million package that would extend property tax relief to farmers and businesses, expand tax credits to parents with childcare costs and create a credit for college graduates with loan debt. The Senate later approved the bill on a 55-12 vote.

“This is a historic day with what we’re doing here. This is wonderful reform for middle-class Minnesotans,” said Rep. Greg Davids, a Republican member from Preston who chairs the tax committee.

Legislative leaders from the House and Democrat-led Senate had worked throughout the weekend to reach deals on the extra spending measures that Gov. Mark Dayton said were essential to gaining his support of a tax bill. Those plans call to spend $25 million toward a statewide voluntary preschool program, which Dayton has deemed a “nonnegotiable” priority, and an extra $35 million for boosting broadband Internet infrastructure into rural Minnesota. The House was taking up that catch-all bill late Sunday evening, with the Senate expected to follow suit.

It was unclear whether those spending agreements were enough to satisfy the Democratic governor. Dayton’s office has said he’d withhold comment until more details about the spending packages came into focus.

The prospect of passing a funding measure for billions of dollars in road and bridge repairs - a marquee issue heading into this year’s shortened session - was uncertain Sunday evening. Legislative leaders tried throughout the weekend to break a stalemate on how to fund $600 million in annual fixes, but Senate Democrats’ top transportation negotiator said those efforts stalled.

“The prospects for a long-term comprehensive transportation bill have ended,” Sen. Scott Dibble said.

As time slipped away, Republican lawmakers floated the possibility of a one-time infusion for road and bridge repairs, paid for with a mix of surplus money and borrowing. But Senate Majority Leader Tom Bakk was not fond of the prospect, and Dayton has continually insisted that the Legislature provide an ongoing funding source for transportation fixes.

A bonding bill full of public works projects across Minnesota appeared poised for a late resolution, as negotiators waited to see whether a transportation deal would materialize and require a slice of borrowing. In a move toward compromise in the session’s final hours, House Republicans prepared to propose a list of nearly $1 billion in proposed projects.

The House-passed tax measure saw a handful of Democrats opposed, including Reps. Erin Murphy and Rep. Laurie Halverson, who raised concerns over a handful of reductions on tobacco taxes - including removing the automatic, annual tax hikes on cigarettes and other products that lawmakers approved as part of a major tax increase in 2013.

“I am concerned that the tax cuts in this bill, along with the spending that will come along later, will put us into a deficit situation,” Murphy said.

The Legislature must adjourn by Monday.



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