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Published May 20, 2013, 03:43 PM

Minnesota legislative session closes on adjournment

ST. PAUL, Minn. (AP) — Short on sleep and time, state lawmakers darted Monday toward the finish of a legislative session that already has produced a hefty tax increase, substantial new money for schools and a landmark law legalizing gay marriage in Minnesota.

By: BRIAN BAKST,Associated Press PATRICK CONDON,Associated Press, Associated Press

ST. PAUL, Minn. (AP) — Short on sleep and time, state lawmakers darted Monday toward the finish of a legislative session that already has produced a hefty tax increase, substantial new money for schools and a landmark law legalizing gay marriage in Minnesota.

The last hours promised drama as House and Senate Democratic majorities worked to finish up must-pass budget bills while trying to squeeze in a smattering of policy changes they hoped to accomplish before leaving town for the year.

Around 2 a.m., the House narrowly approved a $2.1 billion tax increase that falls primarily on smokers and the top 2 percent of income earners, vaulting the state's top income tax rate into the nation's top five. The Senate was expected to pass it later Monday.

"There is no glee or joy in doing the difficult work of raising revenue," said Rep. Ann Lenczewski, D-Bloomington.

She framed the vote as a responsible approach to erasing a $627 million deficit and fashioning a two-year budget that makes big new commitments to schools, colleges and other programs.

In a six-hour debate, one Republican after another warned the new taxes would backfire and lead the wealthy to flee.

"Money talks and money walks," said Rep. Peggy Scott, R-Andover.

The House passed the bill 69-65, with four Democrats joining all Republicans in opposition. It would result in the first state-level tax increase approved by lawmakers since the gas tax went up five years ago.

Some 54,400 taxpayers would pay a higher income tax, averaging $7,200 more per year. The new 9.85 percent upper income tax level is two percentage points higher than the current top tier. The tax on a pack of cigarettes goes up $1.60. Corporations lose some tax preferences. And some businesses see more transactions subjected to the sales tax.

The bill contains $570 million in new credits and local government exemptions that backers frame as property tax relief. Some money flows into aid programs that give breaks directly to homeowners.

Upon Senate passage, the bill heads to the desk of Democratic Gov. Mark Dayton, who is on board.

The taxes represent a key link to a new $38.3 billion state budget for the next two years.

In the afternoon, the House finally voted to send Gov. Mark Dayton a bill that would allow union organizing drives among two groups of workers: in-home daycare providers and personal care attendants to the elderly and disabled. The 10-hour debate was strung out over more than two days, as Republicans blasted what they called a union power grab and Democrats defended as giving those workers an option to unite over common issues.

The House passed the bill by one vote, 68-66, with five Democrats defecting. The bill's passage prompted an eruption of cheers in the House gallery, which in turn provoked angry shouts from several Republican lawmakers.

The only other outstanding portion was a bill to pay for core state agencies, such as the Revenue Department and Department of Veterans Affairs. Both chambers were primed to act on that.

Democrats reluctantly declared a bill aimed at curbing school bullying a casualty of the dwindling clock. Critical financing for the state Capitol's ongoing renovation was in limbo. A sizable increase to the state's minimum wage remained in play, but barely according to top lawmakers.

Sen. Scott Dibble, the Minneapolis Democrat pushing for the new bullying policy, complained that Republicans stonewalled his bill by pledging a lengthy debate.

"This is a political agenda and kids lose out," he said.

Senate Minority Leader David Hann and his fellow Republicans expressed concern it would burden schools with new state requirements and open them up to potential lawsuits.

"Many people in the state frankly don't think it is needed," Hann said. A few dozen supporters of the bill rallied at the Capitol Monday morning, vowing to push it again in the 2014 session.

Harmony was more apparent in the Senate on other things. A 43-26 tally sent a proposed constitutional amendment to the 2016 ballot that asks voters if an independent council should set legislator pay; that decision now rests with lawmakers, who haven't touched salaries since 1999 for fear of a political backlash.

A surprising unanimous vote came on a borrowing measure that would generate $131.6 million for the next phase of a state Capitol fix-up and related parking structure. Hann and Senate Majority Leader Tom Bakk said they were worried about a costly lapse in the project by doing nothing on the financing this year.

"I know a little something about construction," said Bakk, a carpenter. "It doesn't make any sense to ask the contractor to leave and pay for the cost of remobilizing to come back here and start up again."

The House rejected that approach Monday, setting up a conference committee on the issue. The borrowing bill takes a super-majority to pass, making some Republican support necessary. The Capitol project was contained in a much-larger construction borrowing bill that was fell a handful of votes short of a passing margin late last week.

A House-Senate conference committee convened briefly on the minimum wage, which now stands at $6.15 per hour, but reached no immediate resolution.

What was considered a priority earlier in the year has stalled. The House approved a bill raising it in three stages until the hourly minimum reaches $9.50 by 2015; the Senate's bill topped out at $7.75. If they agree on a number, legislative negotiators also must decide if the wage will rise by an inflationary amount in future years.

Republicans had little appetite for that bill, which they lump together with the tax plan in their argument that Minnesota is becoming less attractive for businesses.

Once lawmakers adjourn, they won't return for their election-year session until late February.

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