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Pawlenty property tax cap attacked

ST. PAUL - Rural and inner city communities would be hurt if Gov. Tim Pawlenty's property tax freeze plan is enacted, rural lawmakers say.

"Why should you always kick the dog at the bottom?" asked Sen. Keith Langseth following Pawlenty's fifth State of the State address Wednesday.

Langseth, DFL-Glyndon, and other rural lawmakers did not like the Republican governor's proposal to cap property taxes levied by local governments.

The dispute is a continuation of one that has gone on for years. Pawlenty had wanted to cap property taxes local governments could levy.

"Some oppose this idea by citing the need for local control,'" Pawlenty said in the speech before a joint session of the new DFL-controlled Legislature.

The governor said he would offer a compromise by proposing that any local government that receives less than a third of its general fund revenues from the state be exempt from the tax cap.

"I certainly don't see it" as a compromise, House Majority Leader Tony Sertich said.

The Chisholm DFLer said much of the governor's speech was positive but that it included some "leftovers served up again," including the property tax proposal.

Many rural towns within DFL legislative districts operate with more than one-third of their budget coming from state aid, Sertich said, suggesting Pawlenty could be picking "winners and losers."

Rural legislators said suburbs, like where Pawlenty lives, do not get heavy doses of state aid, but many poor rural communities do. Under the Pawlenty proposal, poor communities might not be able to raise enough property taxes to support local needs, the lawmakers say.

Rep. Frank Moe said that while he found much to agree with in the State of the State, capping property taxes didn't sit well with him.

"Saying we're going to cap property taxes after cutting state funds to local governments and school districts doesn't seem very productive," said the Bemidji Democrat.

Added Rep. Al Juhnke, DFL-Willmar: "He really set the stage for a suburban-metro-rural divide."

Supporters said Pawlenty offered a forward-looking plan.

"As we move forward during this legislative session, it is my hope that the Legislature will adopt the governor's plans to hold the line on taxes, restrain spending and hold government accountable," Minnesota Republican Party Chairman Ron Carey said.

Beginning his second four-year term, the governor also discussed the need to improve the health care system.

While it is a widely supported goal, ensuring that every Minnesotan has health care insurance would be too costly immediately, he said. Current law will allow 45,000 more people to seek coverage from state-subsidized health care, Pawlenty said. He proposed funding a program to expand coverage to all children under 21 in homes with a household income of $60,000 or less in a family of four.

In addition, Pawlenty said health care costs must be contained. That often can be done best with market-based approaches, he said, proposing to use some private market ideas for state programs. He also wants to create an insurance exchange with lower premiums for uninsured Minnesotans. The governor also reiterated his desire to streamline the electronic medical billing system.

Pawlenty also called on lawmakers to help advance renewable energy initiatives in Minnesota. Pawlenty recognized Luverne farmer Mark Willers, who was sitting in the House chamber balcony, as a renewable energy leader.

Willers, from southwestern Minnesota, serves on the board of the Agri-Energy ethanol plant and is chief executive of Minwind Energy company, which owns wind turbines. He said he has supported Pawlenty's leadership on energy issues.

Willers said legislators should take a comprehensive look at the state's energy future. They should "step back and look at where we're going and have an energy policy," he said.

That could include promoting wind energy, hydrogen fuel and fuel derived from plant material, he said.

Rep. Paul Marquart, DFL-Dilworth, said most of Pawlenty's speech was good, but he disagreed with the property tax comments.

"You are really gong to penalize the smaller, more rural cities," Marquart said.

Conspicuously missing from Pawlenty's speech, Sen. Tom Bakk said, was tax reform.

And, Bakk noted, he didn't consider Pawlenty's call for caps on local property taxes apropos.

"I don't think it's very responsible," the Cook DFLer said of state-imposed caps.

Bakk said the governor's plan removes flexibility for local governments and "demonizes" those municipalities.

His sentiment was common Wednesday among rural legislators.

Rep. Brita Sailer, DFL-Park Rapids, agreed. Though she supported some measures outlined by Pawlenty - primarily renewable energy initiatives - she was disappointed by his call for caps.

"Placing a cap on local property taxes ties the hands of city, county and school officials and erodes local control," Sailer said.

She supports a combination of aid increases to cities and counties among wider tax relief.

Sen. Gary Kubly, DFL-Granite Falls, also opposed the measure.

"Why would we want to support something that hurts the rural communities?" he said.

Freshman Rep. Sandy Wollschlager, DFL-Cannon Falls, said she agreed with many of Pawlenty's general themes, such as property tax relief, but like most of her fellow DFLers she stopped short of backing his levy limit plan.

Sertich said he was glad Pawlenty stuck to themes that both he and DFL leaders want to address this legislative session.

"We're thankful that we're speaking the same language," Sertich said of Pawlenty's speech focus on education, property taxes, energy and health care - issues on which both he and Democrats campaigned last fall.

But Sertich also said he and other DFLers want to know the details of Pawlenty's initiatives. That will come when his full two-year budget proposal is released next week.

Davis, Wente and Longaecker work for Forum Communications Co.

Don Davis
Don Davis has been the Forum Communications Minnesota Capitol Bureau chief since 2001, covering state government and politics for two dozen newspapers in the state. Don also blogs at Capital Chatter on Areavoices.