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Progress in some budget areas, but core disputes remain

By Martiga Lohn and Brian Bakst

Associated Press

ST. PAUL — Some obstacles to finishing the 2007 legislative session on time slid away Thursday, although key elements of the state budget were still in flux.

Democrats bowed to Gov. Tim Pawlenty’s wishes on two items that drew explicit veto threats — a so-called "good faith" insurance provision in a $2 billion crime bill and a plan to offer health insurance to the unmarried domestic partners of state employees in a state agency bill.

The insurance provision came out in a deal between the House, Senate and Pawlenty. In exchange, the Republican governor promised to sign the public safety budget bill and negotiate with lawmakers on a stand-alone insurance bill, spokesman Brian McClung said.

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"It had to come out foz him to sign that bill," said McClung, who called the deal "a really positive development."

The agreement came after an 82-52 House vote for the crime bill — including the insurance provision, which would have made it easier for consumers to sue insurance companies over denied or delayed claims. After that, instead of voting on the bill as expected, the Senate recessed for hours while leaders made a flurry of phone calls and met behind closed doors.

Senate Majority Leader Larry Pogemiller said the compromise was a positive signal as bigger negotiations loom.

"It’s a small thing but I hope we can build off it," said Pogemiller, DFL-Minneapolis.

More pieces of the state budget could fall in line Friday, with final votes planned on the crime bill and spending packages for the environment, jobs and state government operations.

Pawlenty will sign a farm and veterans budget bill — although his veto pen still might get some use on line-item vetoes, McClung said.

But even as those budget bills advance, the core fight over additional education spending versus tax increases appears no closer to being resolved. Senate Republicans protested before the vote on the crime bill, saying they don’t have the big budget picture they need to make decisions on individual spending bills.

DFL leaders crossed their fingers that Pawlenty would spill less veto ink than promised.

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"I hope he gets past ‘Just Say No,"’ DFL Assistant Senate Majority Leader Tarryl Clark said.

The public safety package would boost funding for judges, public defenders, police, crime lab scientists and programs for crime victims.

It would also stiffen penalties for Internet surfers who solicit children for sex, batterers who violate no-contact orders or have weapons, massage therapists who have sexual contact with clients and adults who have sexual relationships with much younger teens. Crime victims and their relatives couldn’t get in trouble at work for taking time off to attend court hearings.

Missing from the bill was a proposal to try violent 13-year-old criminals in the adult court system; DFL leaders promised more hearings on that next year. The bill also didn’t fund Pawlenty’s full budget request for pandemic flu preparations, although it did fund a pandemic flu coordinator.

The "good faith" insurance proposal pitted Republicans who said it would jack up insurance premiums against Democrats who said it would help consumers go up against big corporations. Pawlenty painted it as a "turf battle" between trial lawyers and insurers.

Another sign of progress was a House-Senate deal on a $551.7 million bill for several state agencies and basic government operations. In a major concession, majority Democrats backed off a plan to require health benefits for domestic partners of state employees, which got tangled in a fight over gay rights because same-sex partners would qualify.

Instead, the state would study the cost of insuring "significant individuals," which could include an employee’s live-in sister or elderly parent.

Even that compromise might not be enough to prevent a veto. McClung said Pawlenty still objects to administrative cuts the bill would require him to make and proposed changes to the voter registration system, among other items.

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Rep. Phyllis Kahn, DFL-Minneapolis, said she and other negotiators tried to respond to the governor’s issues.

"If he does veto it, I would hope he would be more specific about what he opposes," she said.

The state government bill also includes $750,000 to keep a proposed Capitol renovation alive, a lights-on provision that would keep state government operating even if the Legislature and governor fail to pass budget bills, and more aggressive tax collection efforts that could bring in $104 million.

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