Since January, when there was ice and snow and bitter cold, people at the state Capitol have been saying that if anyone can pull this legislative session out of the ditch, it is House Speaker Margaret Anderson Kelliher.

Now, it is lovely May. The fishing season opener. Mother’s Day. Lilacs ready to bloom. And still people are saying that if anyone can save this session, it is Kelliher, the Minneapolis representative.

But does she have any answers to the gridlock between Gov. Tim Pawlenty and the DFL-controlled Legislature over how to deal with a $4.6 billion budget?

At 11 a.m. today, Kelliher strolled into a room filled with reporters awaiting an answer to the question.

“Good morning,” Kelliher said to the reporters. “It’s good to see you.”

At this point in the session, many legislators are barely speaking to each other. Necks are red. People are tired and angry.

But Kelliher, as always, seemed mellow and happy. She acted as if things are under control.

Any chance of a resolution?

“We believe there has been a bold move by the Legislature,’’ she replied.

The bold move: A Senate and House tax committee agreement hammered out late last night that calls for $1 billion in new revenue. That’s the same amount Gov. Tim Pawlenty sought in his budget proposal.

The difference, of course, is that the DFL-controlled conference committee calls for the $1 billion to come in the form of new taxes;

• A fourth-tier income tax rate on those making $250,000 or more;
• An increase in the tax on alcohol;
• A tax surcharge on revenues raised by credit card companies on interest rates above 15 per cent.

Pawlenty wants his $1 billion to come by selling a so-called bond based on tobacco revenue that would be repaid over the next 20 years.

So that’s what it’s come to. And now, just 10 days before the end of session, there appears no way out.

The governor has made it clear that he’ll all but jump out of his fishing boat on opening day to veto any bill that includes tax increases.

“We take him at his word,” Kelliher said softly, a smile on her face.

Nonetheless, both the House and Senate were expected to pass the tax-increase bills later this afternoon.

“I don’t doubt he’ll veto it,” she said, in effect seemingly rendering the legislative action futile.  
Kelliher doesn’t think so. She seems to think that there’s a chance that some Republicans might cross over and help override a Pawlenty veto early next week, though in the next breath, she acknowledges that would take acts of political courage.

“It’s difficult for them,” she said of her Republican colleagues. “The governor is a powerful figure. He’s a tough operator.”

Still, she seems to believe there will be public pressure on Republicans to support the legislative view of how to deal with the budget over the governor’s view. The public, she said, also will be supportive – especially when they see the alternative.

Her point seemed to be this: The DFLers, and many Republicans, would prefer even deeper cuts than have already been made, rather than “borrowing” the tobacco bond money.  Beyond that, she says that the governor’s budget proposal calls for deeper cuts in health care areas than the House and Senate proposals.

It’s interesting how the two sides present Health and Human Services cuts.

Pawlenty makes his deepest cuts there, indicating that the decreases would affect the welfare crowd, faceless people most Minnesotans don’t know.

DFLers paint the picture dramatically differently. They say the cuts would affect you and me. The governor’s cuts, they say, would close hospitals, especially in small communities. They also say that the governor’s cuts would toss your granny out of her nursing home. These are people and institutions that affect people most of us know.

Kelliher said that the governor’s health care cuts even would be a job killer.

“Sixteen thousand people working in health care would lose their jobs under the governor’s proposal,” she said.

Her Republican colleagues, she said, know the price that would be paid in health care following the governor’s plan. They are facing big pressure from health care providers to say no to Pawlenty.

Overall, she added, the budget cuts proposed by the legislature are DEEPER than the governor’s proposed cuts. But they come across the board, not aimed so specifically at Health and Human Services.

All of this, Kelliher says with great calm. She thinks she has Minnesota on her side.

“We’ve heard from thousands of Minnesotans,” she said.  “… They don’t say they want either public education or health care. … They want a balanced approach.”

So how does this play out?

Kelliher says that the conference committee’s call for $1 billion in new tax revenue meets the governor’s acknowledgement that $1 billion in new revenue is needed.

He gets his money with the tobacco bond. She believes both DFLers and many Republicans oppose that plan.

"It would take 20 years to pay back the debt on that scheme,” she said.  “ … Does he want to be known as the ‘Credit Card Governor?’ ”

So we have two lines in the drifting sand: The governor says, “NO NEW TAXES.” The DFL says, “NO TOBACCO BOND SCHEME.”

If the two can’t find some middle ground, what happens?

Kelliher implied that the Legislature then might go to work cutting another $1 billion from the budget.

“We’d have to see if Minnesotans like what they see,” she said.

Any way to avoid a special session?

“There’s time to get this done,’’ said Kelliher.

The governor made the same comment Thursday.

So on some things, there is agreement.  And everyone’s still waiting for Kelliher to pull it all together.