Almanac: At the Capitol

Senate Tax Chair Tom Bakk came down to the Capitol Press Corps to respond to Gov. Pawlenty's remarks earlier in the day.  Bakk sounded a very interesting and conciliatory note.  He said in negotiations "nobody gets everything they want, but governors are very powerful."  Of course Bakk wants to be governor too.  Bakk also gave a surprising signal saying "we don't have to have a tax bill this year."  Some in the press thought that had the echo of several years ago when then Majority Leader Dean Johnson admitted "we don't need anything."

Meanwhile, Pawlenty had a new approach to talking with reporters.  He held a casual press conference sitting down with reporters at a big table in his reception room.  Pawlenty took on the tax chair saying "Sen. Bakk's bill increases property taxes more than mine" and added that the notion local governments have "no option but to raise taxes is bunk."  Bakk said he'd rather not have property tax increases approved either.  It seems maybe Bakk could get along better with Pawlenty than Senator Pogemiller who admits his relationship with the governor isn't great.

And Pawlenty is going new media, not just a new website, but he's now on Twitter (with staff help tweeting).  This is not a note you get every day:

Hi, Mary Lahammer  (mlahammer).

Tim (pawlenty) is now following your updates on Twitter.

Check out Tim's profile here:
  http://twitter.com/pawlenty

Taxes were the subject of the day as the Senate rolls out its tax plan and the House tax committee passed its bill.

View the Capitol Update for April 21, 2009.

Another day, another long line waiting for a tax bill.  Lobbyists are again lined up by the dozens to see the details of a tax bill.  This time it's the Senate tax bill that included web sales tax and creates a new 4th income tax tier and adjusts all the brackets.  The changes blink off in 2014.  More details:

The current rates are changed as follows: 5.35 percent to 6.00 percent, 7.05 percent to 7.70 percent, 7.85 percent to 8.50 percent. The income brackets are changed to reflect the inflation adjustment for 2009 as the new base year. The new fourth tier rate is 9.25 percent, and it begins at the following taxable net income levels: $250,000 for married individuals filing joint returns ($125,000 for married filing separately), $141,250 for unmarried individuals, and $212,500 for unmarried individuals qualifying as head of household.

***Update:  Senate Tax Chair Tom Bakk says 85% of taxpayers will be affected by the income tax increases, although he says it's "heavily weighted to high income earners."  Bakk said "we need to start the discussion with the governor" about revenue sources since both need it, the question is if they want to hold down property tax increases and not sell tobacco bonds, then where is the money going to come from?  Bakk said his bill "is more transparent" than the governor's budget.

Republican lead Sen. Julianne Ortman said the governor's plan even with onetime money is better than the Senate tax bill that "increases income taxes on low and middle income people, who'll have no money to send kids to school, fix up their house and cars" and get the economy going again. Minority Leader Dave Senjem said he has a lot of "fear of imposing a tax rate that will not spark interest or make Minnesota a place where we want to grow."  Gov. Pawlenty's spokesman Brian McClung called the bill "outrageous...even by DFL standards, an extraordinary tax hike."

Senate Republicans rolled out some fancy charts saying if Senate DFLers raise $2 billion in income taxes that's a 12.6% rate--the highest in the country.  They say 92% of businesses pay through the income taxes so this hurts jobs.  Republicans say the DFL plan would create "an average tax increase of $14,000."  Now Senate Minority Leader Dave Senjem admitted "we don't know what their plan is" but Sen. Geoff Michel added it "sends a dangerous signal the state is closing for business."

Senate Tax Chair Tom Bakk said his plan has been "misrepresented" by the governor and Republicans.  He said he hasn't decided where an income tax will start, Bakk said he "might go lower than $65,000" and hit across the board for all incomes.  But he is considering other taxes like online purchases and surcharge on credit card interest rates above 15%.  Bakk said the Republicans were sitting in committee this week when he said he'd look at more than the income tax but "they're having fun, I just wish they'd have fun with the facts and not make things up."  Bakk also shot down House Tax Chair Ann Lenczewski's huge tax overhaul saying this isn't the time to do that and "big reforms need to come from a governor."  Funny, he's running for governor you know...

Bakk joins me live on Almanac: At the Capitol tonight with tax committee member Sen. Warren Limmer. 

Governor Pawlenty's new budget has more money for education and cuts to health care, and there's another push against gay marriage.

View the Capitol Update for March 17, 2009.