CHICAGO (Reuters) - Minnesota lawmakers approved a plan on Monday to plug a $3 billion hole in the state's two-year budget.
The legislation heads to Governor Tim Pawlenty, who called the legislature into a special session just after midnight to pass the measure after he reached a deal with legislative leaders that did not include any tax increases. Details of the plan were not immediately available.
Last week, the Republican governor vetoed a different plan passed by the Democrat-Farm-Labor Party-controlled legislature that would have raised the income tax rate for wealthier residents.
Balancing Minnesota's fiscal 2010-2011 biennial budget became more complicated after the state supreme court ruled on May 5 that Pawlenty exceeded his authority when he cut spending last year.
The governor touched off a legal challenge last June, when he used his so-called unallotment power to remove nearly $2.7 billion from the $34 billion budget to deal with falling revenue.
"We fought the governor's illegal unallotments, and won. We fixed the fiscal crisis he created," said House Speaker Margaret Anderson Kelliher in a statement.
(Reporting by Karen Pierog; Editing by James Dalgleish)