Minnesota Lawyer

DFL legislative leaders have released their proposal for balancing the state's nearly $3 billion budget deficit by the time the session legally must adjourn next Monday. And the essential trade-off appears to be this: DFLers will say yes to 80-85 percent of Gov. Tim Pawlenty's unallotment actions, including a ratification of his ad hoc $1.8 billion school payment shift, if the governor agrees to $433 million in new taxes.

Wednesday's Minnesota Supreme Court decision invalidating the one-man, $2.7 billion budget-balancing act undertaken last year by Gov. Tim Pawlenty left Democrats cheering and Republicans sniping, but the reaction was richly bipartisan in another sense: Everyone began scrambling to figure out what has to happen next and what the broader repercussions might be.

A panel discussion this morning at the University of Minnesota explored the ramifications of this week's ruling on unallotment by the state Supreme Court.

DFLers aren't the only ones that are mulling over the question of which unallotments to ratify or restore.

Minnesota Gov. Tim Pawlenty exceeded his unallotment authority last year when he used the statute to balance the state's budget, the Minnesota Supreme Court has ruled.

In the face of opposition from the state's largest business association, the House Taxes Committee on Tuesday night laid over a proposal to eliminate so-called foreign operating corporations (FOC) for possible inclusion in an omnibus bill.

Minnesota Commissioner of Revenue Ward Einess will testify this afternoon in favor of a bill that would require his agency to conduct a study of Minnesota and Wisconsin residents who would benefit from a reinstated income tax reciprocity agreement between the two states.

DFL legislative leaders have long flogged Gov. Tim Pawlenty for his reliance on one-time moneys in crafting budget fixes that leave the hard budget-balancing questions for another time. But the omnibus budget supplemental passed today in both legislative chambers, which encompasses every budget sector except the two biggest -- health and human services and K-12 education -- does many of the same budgetary magic tricks that Pawlenty has grown famous for deploying.

DFL legislators in the House and Senate today passed a supplemental budget bill by comfortable margins. The votes weren't cast along straight party lines, however.

A House and Senate conference committee on Saturday came to an agreement on a supplemental budget. Floor votes are expected on Monday.