Legislative update, week 17: Showdown over tax increase plans

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Lawmakers at the Minnesota Capitol burned the midnight oil last week as they work their way through spending bills that set budgets for state agencies over the next two years.

This week a big question looms large for lawmakers: How is the state going to raise the money to pay for all that spending, plus dig the state out of its projected deficit?

The House last week approved a bill that would raise $2.6 billion in new taxes, so now it's the Senate's turn, and lawmakers there have a smaller number in their sights. Senators as early as Monday are expected to consider a measure that would raise $1.8 billion in new taxes.

There are a number of other key differences between the House and Senate plans, and MPR outlines some of the big ones.

For one, senators said they don't intend to swallow a House plan that leans heavily on raising the alcohol tax as much as $4 for a case of beer. Another difference: House Democrats would raise cigarette taxes by $1.60 per pack, while Senate Democrats aim to increase cigarette taxes by 94 cents a pack.

Both chambers seem to agree with Gov. Mark Dayton's sock-it-to-the-rich approach, but the chambers differ in the details. Leaders in the DFL-controlled House aim to hike income taxes on the top 1.1 percent of filers (couples with taxable incomes of $400,000 a year or more). The House also includes a 4 percent temporary income tax surcharge on people with taxable incomes of more than $500,000.

But that contrasts with Senate Democrats who have said they aim to raise income taxes on a bigger slice of high-income earners, the top 6 percent of filers (couples with incomes of $142,000 and higher), from 7.85 percent to 9.4 percent.

Senators are also expected to repeal a longstanding ban on sales tax for clothing, the Associated Press reports.

Lawmakers are scrambling to finish their budget-bill work in the next few weeks. After those tasks are done, observers are eager to see how lawmakers proceed with several unresolved high-profile issues, including:

Gay marriage. Insiders say floor votes on a bill that would legalize same-sex marriage in the state could be just a week or two away. The Star Tribune reports that much is happening behind the scenes, as the faithful on both sides of the debate lobby to influence lawmakers.

The measure is generally thought to have support in the Senate. The House vote is more of a mystery, and it is believed to be very close. Lobbyists on both sides continue to intensify their efforts, meeting with lawmakers daily, the Star Tribune reported.

Background checks. Lawmakers have been debating whether to require broader background checks for gun buyers. A House panel approved a measure last month that extends background checks to private sales at gun shows.

Vikings stadium. Lawmakers have been irked to see just how little money electronic pulltab gaming machines, still trickling into the state's bars and restaurants, have been generating. State officials were counting on tax revenue generated from the machines to help pay the state's $348 million share of the new $975 million Vikings stadium. Now they are casting around for new ways to come up with the cash.

Minimum wage. The current minimum wage in the state is $6.15, but most workers are paid the federal minimum wage of $7.25. One House proposal would hike the rate paid by large employers to $9.85. A Minnesota Senate bill would require a much smaller increase to $7.50.

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