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Minnesota Senate Majority Leader Paul Gazelka, R-Nisswa, spoke with reporters on Tuesday, May 7, 2019, following a budget negotiation talk in the governor's office. Dana Ferguson / Forum News Service

Minnesota budget talks pick up as clock ticks down to strike a deal

ST. PAUL — Legislative leaders and the governor reentered closed-door budget negotiations Tuesday, May 14, a day after they deadlocked and broke off talks.

For more than eight hours on Tuesday afternoon, Gov. Tim Walz, Senate Majority Leader Paul Gazelka, R-Nisswa, and House Speaker Melissa Hortman, D-Brooklyn Park, discussed possible paths to a timely budget deal. Democrats and Republicans sit on either side of a $2 billion divide in terms of how much the state should spend over the next two years.

They said they planned to pull an all-nighter at the Capitol to continue work on a compromise budget plan.

"We're still here," Walz told reporters on Tuesday evening around 6:15 p.m. "That's a good thing."

While they inched closer to a compromise on Monday night, their core disagreement remained. The two sides split on whether the state should raise taxes to fund boosts to public schools, health care programs and other areas of state government.

Democrats and Walz say yes. Republicans say no. The result will determine whether Democrats can fund many of the proposals they've put forward.

House Democrats and Walz have proposed increasing taxes and fees to boost funding to schools, state health care programs and community prosperity efforts. If approved, Minnesotans could see those tax hikes at the gas pump, in medical bills and, for some, as part of their state income taxes.

Democrats argue that the state needs to bring in more money to pay for those "investments," And they've said Minnesotans are willing to pay more to get better services from the state.

Republicans have countered that Minnesotans are already overtaxed and put forth a plan that would keep taxes flat and offer tax relief to some.

"There’s not a middle ground on taxes,” Gazelka told reporters on Monday. “That’s not the direction we need to go. We don’t think we need it, and we want to make the case to the public.”

DFL leaders said they would continue to push for their proposals, despite GOP opposition.

"If (Senate Republicans) expect the House and the governor who just won elections to entirely capitulate, roll over and play dead for a Republican ideology, they are very much mistaken," House Majority Leader Ryan Winkler, D-Golden Valley, said Monday evening.

Neither side appeared ready to budge on Monday, one week before the legislative session was set to end. And legislative leaders said they need to reach a compromise by Wednesday, May 15, at noon if they want to get the bills drafted in time.