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Tax, transportation hopes crash

ST. PAUL - A flood of transportation funding and property tax-relief hopes overshadowed the reason Minnesota lawmakers met in special session Tuesday night - to help southeast Minnesotans affected by deadly floods.

In the end, however, it appeared only an obscure elections-related bill would pass along with the disaster bill.

Democratic-Farmer-Labor Party lawmakers gave up on their desire for property tax relief by 8 p.m. Tuesday after it became apparent they could not work out a deal with Republican Gov. Tim Pawlenty.

"There will be another day," Rep. Paul Marquart, DFL-Dilworth, said after emerging from a Democratic lawmaker meeting.

"The political will was not there," added House Majority Leader Tony Sertich, DFL-Chisholm.

Marquart, chairman of a House property taxes committee, said he hopes Pawlenty will call a second special session to lower property taxes, although there were no signs that will happen.

Marquart said preliminary numbers he has seen show large property tax increases if no state relief is voted.

His community of Dilworth, for example, would have seen steady property taxes had the tax bill lawmakers passed earlier in the year been enacted. As it stands, taxes there could rise as much as 16 percent, he said.

"It is still a huge, huge issue," Marquart said.

Pawlenty vetoed the tax bill over a technical rider and some individual provisions. A bill being considered by some House members Tuesday was a watered-down version of the bill they passed earlier this year.

The original tax bill would have given every Minnesota homeowner a break on property taxes. It also would have provided cities more state aid, under the theory that such a move would lessen cities' need to raise property taxes.

Pawlenty sent legislators a letter Tuesday night urging them not to take up other issues: "I am hopeful you share my belief that a deal if a deal and the agreement to hold a one-day special session limited to the agreed-upon disaster issues will be upheld."

The governor and legislative leaders decided in private to hold the special session, and what would come up in it, although they did exchange letters given to the media throughout the process.

Property taxes emerged as a potential issue on Tuesday, but transportation funding was discussed even more.

A loud pro-transportation rally of about a dozen people greeted lawmakers as their special session was called to order at about 5 p.m.

"We are missing a huge opportunity," Sen. Steve Murphy, DFL-Red Wing, complained when talking about the lack of a transportation-funding bill. "We have had 20 years of missed opportunities in this state."

Murphy and other Democratic-Farmer-Labor Party leaders have negotiated transportation funding with Republican Pawlenty since the regular session adjourned in May. He said the two sides have grown further apart in recent weeks, even after Pawlenty and legislative leaders agreed after the Aug. 1 Minneapolis bridge collapse that more money is needed to improve the state's roads and bridges.

However, Murphy said, he did not push to include transportation funding in the brief special session because he knew Pawlenty would balk.

"The flood is the most immediate and pressing issue facing the state today," he said.

Rep. Doug Magnus of Slayton said DFL legislative leaders' failure to negotiate in good faith with the governor means transportation issues will not be addressed until at least next year.

Magnus, the top House Republican on transportation issues, said he worked with the Pawlenty administration to craft a compromise highway funding bill, but Democrats rejected it outright.

"It is a missed opportunity," Magnus said during a break on the House floor Tuesday night. "We should have been doing something."

Rep. Larry Howes, R-Walker, said this is not the time to tackle transportation funding, which many experts say is more than $2 billion short annually.

"There is too much passion here," Howes said, adding that more thought is needed to work out a transportation deal.

"We need to do a transportation package without the emotion," he said.

Transportation funding was a prime concern in the days after an Aug. 1 Minneapolis bridge collapse, with Pawlenty going so far as saying he would change his long-standing opposition to a gasoline tax increase.

Democrats complained that Pawlenty kept changing his position on transportation funding.

Rick Krueger of the Transportation Alliance, a former Alexandria-area lawmaker, said his organization is looking ahead to the next legislative session that begins Feb. 12.

"The momentum is not going to die," he said. "We will be organizing statewide."

Murphy said lawmakers have no choice but to infuse road, bridge and transit programs with money in 2008.

"I can guarantee everybody in this room that next year we are going to have to have a transportation bill or we are not going to be able to do a lot of projects," Murphy said.

Murphy, the Senate transportation chairman, pledged to resume talks with the governor's office soon after the special session with a goal of reaching an agreement before the 2008 session starts on Feb. 12. However, he appeared pessimistic that a deal would be reached.

"The bill is going to grow," he added.

Sen. Kathy Saltzman, DFL-Woodbury, said without a transportation bill this year, it will be even harder to negotiate with Pawlenty before Feb. 12.

House Transportation Chairman Bernie Lieder, DFL-Crookston, said a special session is not needed to fix bridges; state transportation officials can find money for that in light of the Interstate 35W bridge collapse.

However, Lieder said, a special session transportation bill could speed funds to state and local road projects.

Sen. Keith Langseth, DFL-Glyndon, complained about the special session because it did not include transportation money.

"Now it's squeezed down to the absolute minimum," he said of Pawlenty's latest transportation proposal. "He won't let us do a thing."

"How this thing can be called a compromise is beyond me," Langseth said.

State Capitol Bureau reporter Scott Wente contributed to this story.