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Minnesota Senate Majority Leader Paul Gazelka answers a reporter's question about budget talks on Monday, May 6, 2019. With him is Senate Finance Chairwoman Julie Rosen. Don Davis / Forum News Service

Friction after Republicans push to drop gas tax hike, Hortman fires back

ST. PAUL -- Budget negotiations came to halt late Monday, May 6, as leaders in the nation's only divided Legislature reached an impasse over education funding and proposed tax increases.

And early Tuesday, it was unclear whether conversations would continue without one side willing to bend on its spending plan.

A nearly $2 billion gap separates Gov. Tim Walz and House DFL lawmakers, who hold a majority in that chamber, from Senate Republicans, who have control there. And as they missed a self-imposed Monday deadline to decide spending targets for areas of state government, each side appeared ready to stand firm in support of the plans they put forward.

Walz, House Speaker Melissa Hortman, DFL-Brooklyn Park and Senate Majority Leader Paul Gazelka, R-Nisswa, exchanged offers late Monday, but Democrats and Republicans both said the compromise plans didn't go far enough.

An atmosphere of positivity that surrounded early budget talks seemed to evaporate overnight and legislative leaders in news conferences and statements early Tuesday came out swinging.

“I am disappointed Governor Walz and Speaker Hortman have so far refused to drop even one cent of their massive four-year $12 billion tax increase agenda," Gazelka said in a statement Tuesday morning. "Serious negotiations can continue when St. Paul Democrats realize we can’t keep taxing people out of independence and prosperity by promising them a public program to help them instead.”

In response to that statement, Hortman defended Walz's and House DFL lawmakers' offers to cut from their more than $49 billion spending plans.

“I’m sorry, bullshit,” Hortman said. “The governor moved $200 million, we proposed to move $664 million. They are not that bad at math, $200 million is not zero, $664 million is not zero. We put a substantial move on the table and the Senate put nothing on the table in response.”

Senate Republicans in Monday night negotiations countered DFL offers with a 12% spending boost to E-12 education compared to what they'd originally proposed. And any spending to the Department of Human Services determined to be in excess after implementing fraud-prevention measures would also go toward E-12 education, they said.

But that increase would come on the condition that a 2% tax on medical providers sunset as it is set to at the end of the year and the gas tax at the current level. Walz and Democrats have proposed phasing in a 20-cent-per-gallon gasoline tax to pay for road and bridge repairs. And they maintain that the provider tax must stay in place to fund health care for low-income people and the working poor.

“If they can’t compromise at all, it is unclear how we end this session,” House Majority Leader Ryan Winkler, DFL-Golden Valley said at a news conference Tuesday.

Pre-set deadlines to wrap up conference committee bills are off the table, Hortman said, and legislative leaders should prepare to work through the next 13 days of the legislative session to reach a deal. She and Walz said they expected Senate Republicans to prepare a counteroffer ahead of their next talk.

“Until there’s a real counteroffer there’s nothing to talk about,” Hortman said following a brief meeting between legislative leaders on Tuesday afternoon. “I understand that we have fishing opener, I understand that we have Mother’s Day, but we have a job to do."

Gazelka said Democrats should come to him with a new offer and prove why taxpayers should foot the bill for increases at the gas pump or elsewhere. He and other Senate Republicans have said they'd sink a gas tax hike and have opposed the continuation of the provider tax.

“We feel like (their plan) is way, way high as far as tax increases on Minnesotans and so that’s what we’re waiting for,” Gazelka said.

Walz said he was glad the discussions were taking place with two weeks left in the legislative session, rather than at the last minute. But he said he was disappointed that leaders in the nation's only divided Legislature couldn't reach a deal on the self-imposed deadline to list budget targets for state government spending areas.

“I think there’s reasons to be optimistic," Walz said. "I just need to wait for a serious counteroffer."

Legislative leaders were slated to meet Sunday, May 12 at 6 p.m. but said negotiations could continue earlier if either side could bring forth a compromise plan.