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Lawmakers, governor get down to hardest work of session

ST. PAUL, Minn. (AP) — Lawmakers and Gov. Tim Walz got down to the most difficult work of the legislative session Thursday, as they began what were expected to be marathon negotiations on budget targets.
The Democratic-controlled House, the GOP-controlled Senate and the Democratic governor face a self-imposed deadline of Monday to agree on spending caps so that conference committees can get busy on 10 different budget bills and a tax bill. Big differences remain with 2½ weeks until the May 20 adjournment deadline.
“It is very difficult to finish a legislative session on time when you have divided government,” House Majority Leader Ryan Winkler said. “In fact it’s been two decades since that has happened.”
But Senate GOP Majority Leader Paul Gazelka downplayed the urgency. He pointed out that it’s his second budget cycle as majority leader, while it’s the first for Walz and for Melissa Hortman as House speaker.
“We’re going to get this stuff done,” Gazelka said. “It’s not going to be easy. But the process is working.”
Hortman said she expected to finish on time.
Walz and the Democratic leaders underscored the importance to them of preserving the state’s 2 percent tax on health care providers, which expires at the end of the year and is one of the few issues on which Walz has said he won’t compromise. The money goes into the state’s Health Care Access Fund, which has long helped pay for Medicaid for the poor and the MinnesotaCare program for the working poor, though most of it now goes into other health programs.
Republicans want to let the tax expire and feed the fund in the short term with money scrounged from other sources. But Winkler said the GOP approach would push the state off “a fiscal cliff” four years from now.
Flanked by leaders of the Minnesota Hospital Association and around two dozen chief executives from rural and urban hospitals around the state, the governor said the tax and fund have survived nearly three decades and have been copied by other states because they work.
“The fact of the matter is, without the provider tax we’re erasing $700 million a year from the health and human services budget,” Human Services Commissioner Tony Lourey said.
Neither Walz nor Gazelka would say whether they’d consider a two-year extension of the provider tax to defer the issue. A small, bipartisan group of senators has proposed replacing the tax with a fee on health insurance claims paid by insurers and third-party plan administrators. Gazelka and Sen. Michelle Benson, who chairs the Senate Health and Human Services Committee, didn’t commit either way.
The many other unresolved differences heading into the final negotiations include Walz’s proposal to raise the state’s gas tax by 20 cents per gallon, or 70 percent, to fund road and bridge improvements. Republicans say that’s still a non-starter for them. They also oppose Democratic proposals on gun control, just as one more example, while Democrats oppose GOP proposals to limit abortions.