With calls to repay taxpayers, House GOP walks thin line in doling out budget surplus

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ST. PAUL, Minnesota — A projected $1.87 billion budget surplus puts majority House Republicans in a game of tug-of-war — not just with Democrats who control the rest of state government, but within their own party's competing and sometimes conflicting priorities over how much should be spent versus returned to taxpayers.

News that the state's surplus had nearly doubled from previous estimates of $1 billion amplified calls among some Republicans to give it all back to Minnesota residents through tax cuts or rebates, putting them at odds with House GOP leadership who have already earmarked some surplus dollars for nursing homes and road and bridge fixes.

"Government's bite out of the wallets of the people of Minnesota needs to stop," said Rep. Steve Drazkowski, R-Mazeppa. "I think there are a good number of people in our caucus that believe that government is too large and that we should give all the money back."

As if to show the delicate line he'll need to walk in handling the extra cash, House Speaker Kurt Daudt initially said Republicans would set aside a majority of the surplus for tax relief. But Republicans would first need to dole out money to some spending priorities, he added, and then give the leftovers back to Minnesota residents. Finally, Daudt promised to spend at least half the surplus on tax cuts, "and probably a lot more than that."

The House GOP will start laying out their budget targets later this month. With a 72-member majority, Republicans can only afford five defections on a vote unless DFL lawmakers join in.

Daudt and other House Republicans criticized Democrats for their initial plans to forego any tax relief, instead funneling the additional money into early education programs and tuition relief.

"How big would it have to be? $3 billion? $4 billion? $5 billion?" asked Rep. Jim Knoblach, the powerful Republican Ways and Means chairman. "Is there any number at which our Democratic friends would actually say, 'Government has enough, I guess we could give some back to some of our hardworking Minnesota families?'"

But the $900 million or more in tax relief Daudt laid out Friday isn't enough for Drazkowski and other members of their party. Within minutes of the larger surplus being announced, the Republican state party launched a call to send every dollar back to Minnesota residents — $350 per person, their statement noted.

"It is only common sense and a matter of fairness, I think, to return all of that to the people who sent it there in the first place," party Chairman Keith Downey said.

Despite the push and pull, Daudt said a larger surplus would make it easier to nail down a two-year budget with Democrat Gov. Mark Dayton and the DFL-led Senate.

Clearly, the GOP's ability to pump millions into schools and rural nursing homes without making cuts is an advantage House Democrats would prefer the GOP didn't have. DFL lawmakers have needled House Republicans for the hundreds of millions in spending they've proposed, suggesting the GOP has reneged on a campaign promise to hold the line on the state's budget.

House Minority Leader Paul Thissen, DFL-Minneapolis, tried to push Republicans last week to cap the state's next two-year budget at $39 billion — roughly the same size as the current budget.

"The fact of the matter is there hasn't been a single bill introduced on the Republican side cutting spending this year," Thissen said. "On the other hand we've seen plenty of bills to cut taxes and plenty of bills to spend lots and lots of money."

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