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Capitol crowd gathers to hear the latest on budget: some progress but no agreement

The crowd milling outside the governor’s office this morning: included dozens of be-hatted veterans who had been called to show up at the Capitol to be on hand when Gov. Tim Pawlenty signed legislation involving agriculture and veterans’ issues.

They stood side by side with a dozen reporters who, though I’m sure they care deeply about veterans’ affairs, weren’t there for the bio-diesel action and veterans’ license plates for motorcycles. The reporters were waiting to see what the governor had to say on budget negotiations with legislative leaders.

House Speaker Margaret Kelliher had emerged from the governor’s office just minutes earlier, declaring that a brief meeting with Pawlenty had been “productive.” She said they still need to “work through some numbers” and that everyone planned “to be flexible” today.

She said she hopes they can make progress early this week because “last year it was topsy-turvy at the end, and we don’t want that to happen again.”

The governor, after signing the omnibus agriculture and veterans’ bill, let the vets file out of the packed governor’s reception room — the one lined with impressive Civil War and early Minnesota paintings — before taking questions on the legislative session.

Then the governor told reporters that there are still key differences between him and the legislative leaders. “We need to work out some key ideas revolving around a property tax cap,” he said.

He said the melding of ideas would be challenging, but not impossible.

He also raised the prospect of a potential special session.

if legislators start passing the big conference committee bills without further negotiations and changes, that’s a sign they aren’t coming together, he said. If that happens, he is prepared to handle the $935 million deficit in other ways, he said, noting that he’s preparing an unallotment list and thinking about a special session.

“I hope it doesn’t get to that point,” he said.

Pawlenty said he wants to limit property tax increases to the lesser of 3 percent or the consumer price index; legislators have agreed in theory to some kind of cap, he said, but their plan would have negligible impact in holding down giant increases.

He said it’s starting to feel like last year — maybe a little topsy-turvy, as Kelliher put it — and he hopes the legislators don’t pull the trigger on big spending bills that came out of a conference committee over the weekend but aren’t acceptable to him.

Pawlenty said he has a “somewhat optimistic hope” they’ll come together. His revenue commissioner is working today with the tax chairs to hammer out some numbers.

As to Central Corridor funding, he said: “First things first. If we can’t agree on the budget, there won’t be a Central Corridor.” He paused, then added: “This year.”

As for the ag and vets bill Pawlenty did sign today, it includes a jump in the required use of bio-diesel fuel in increments from 2 percent to 20 percent by 2015. He said there are protections, in case of price, availability or viability if the fuel become a problem.

The veterans issues include authorizing a special license plate for motorcycles, improving the state GI bill, expanding protections for those called up to military service and setting up a working group to improve county veterans’ service offices.

Just before signing, Pawlenty said: “We can never repay (the vets) for all they do, but we can remember their service.” The goal, he said, is to “make Minnesota the most veteran-friendly state in the nation.”

The men in American Legion and VFW hats all clapped.

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