Tax increases stick out in first Senate bills

(AP) The glow of opening day had barely worn off when suggestions for tax increases started popping up on Thursday. The first 20 bills introduced in the DFL-led Senate Thursday included proposals to raise the gas tax, the sales tax, cigarette taxes, vehicle taxes and more.

Higher taxes go against the flow of two marquee proposals - Senate File No. 1 aims to bring spiraling property taxes under control, and a major health care package could save consumers money by capping premium increases.

Democrats have long dominated the Minnesota Senate but their policies have better chances of becoming law this year with their party also ruling the House. Still, they've still got to contend with Republican Gov. Tim Pawlenty, who opposes raising taxes.

Senate Republicans were quick to see a pattern in the proposals for tax increases.

"Right out of the gate we're seeing Democrats propose tax increases," said Sen. Chris Gerlach, R-Apple Valley. "We have a multi-billion-dollar surplus. That ought to be enough."

The proposals include:

- A transportation funding package would raise Minnesota's 20-cents-a-gallon gas tax by another dime. It would also increase license tab fees on newly purchased vehicles. And it would let all counties charge up to $20 annually for every car, what's known as a wheelage tax.

- A constitutional amendment bill would ask voters to raise the state sales tax by 3/8ths of a percent to pay for clean water, the arts and the outdoors. Another variation would boost the sales tax by a quarter of a percent for the outdoors and clean water.

- A children's health care bill would triple a wholesale tobacco tax beginning next year.

- Another bill would let school districts levy local property owners for the full cost of running ice arenas, instead of the current limit of 90 percent of the cost.

Senate Majority Leader Larry Pogemiller said it would be "improper" to conclude that Democrats are pushing tax increases. He said his caucus's top priority is to cut property taxes, and voters would decide whether to approve a constitutional amendment for a higher sales tax.

"This is a tax cut," said Pogemiller, pointing to Senate File No. 1 on a list of bill introductions. "That's a tax cut. No. 1 is a tax cut."

He added: "What matters is what the committees decide to do in terms of appropriate investments in Minnesota's future. We're done with the bullet points. We're going to do serious legislative work."

Sen. Steve Murphy, author of the transportation bill, said most people are willing to pay more for better roads. He said roads and transit are underfunded and it's time to catch up.

"If we want our state's economy to improve, we have to make investments and this is one of the investments," Murphy said. "It's we the taxpayer that are going to have to make the investment."

The health care package aims to save consumers money by requiring electronic medical records and limiting the amount insurers could spend. The bill would trim premium increases for the MinnesotaCare program and eliminate copayments for two other subsidized programs. It also revives a proposed constitutional amendment asking voters to define health care as a right.

The bill's sponsor, Sen. Linda Berglin, said her proposal would move the state closer to universal health care coverage. She said a health care fund tied to the MinnesotaCare program for the working poor is running a surplus that will probably cover the bill's costs.

On another policy front, the Democratic energy package calls for a requirement that utilities generate a quarter of their electricity from renewable sources such as solar or wind power by 2020 - five years faster than a goal Pawlenty wants lawmakers to set.