Leadership

Eric Black, reporting for MinnPost, has the latest in the "unallotment" story.

DFL legislative leaders, union officials, attorneys and representatives of some of the groups that expect to be hammered by Gov. Tim Pawlenty's "unallotment" plans have been meeting to strategize ways to fight back.

A legal challenge is under discussion, as well as political counterattacks.

Three meetings have been held over recent days, including one Wednesday. House Speaker Margaret Anderson Kelliher seems to be running or at least coordinating the effort. She presided over two of the three meetings and another legislator close to the speaker represented her at the third.

The first thought that sprang to my mind when I read this was "where were these people last summer when the session ended with the ANNOUNCEMENT of a huge budget shortfall?" and "What were they doing all last fall and winter when the reality of this recession was settling on us all?" and most importantly "where were they in February, March, April and the first part of May during the legislative session when they SHOULD have addressed all this?" Then my next thought answered the questions.....

Where were these people last summer when the session ended with the ANNOUNCEMENT of a huge budget shortfall? - They were all gearing up for the fall campaign by holding townhall meetings that only screened out questions that were critical of the Legislature or asked how they were going to FIX the problem.

What were they doing all last fall and winter when the reality of this recession was settling on us all? They were (in the fall) campaigning for office on the claims of fiscal responsibility and fixing the problem - promises that they never kept.

Where were they in February, March, April and the first part of May during the legislative session when they SHOULD have addressed all this? They spent the first 13 weeks of the session passing more spending bills on wants - rather than figuring out how they were going to fund the needs (like GAMC).

The same people that frittered away the last 12 months that they had to fix these problems are now complaining about the fact that someone has decided to FIX THEIR MESS (rather than kicking the can down the road some more)??? If the DFL leadership was so concerned about fixing the budget, why didn't they do it during session? Why didn't they take the compromise that Governor Pawlenty offered them (when he gave in to them on 2/3 of their objections to the his budget proposals)? WHY DIDN'T THEY DO ANYTHING CONSTRUCTIVE THIS PAST SESSION?

My dear friend Gary Gross is absolutely spot on in his analysis of the situation....the only one showing leadership in this situation is Governor Pawlenty. The DFL Leadership, on the other hand, are acting like a bunch of spoiled three year olds that didn't get candy before dinner. It's time for the DFL Leadership in St. Paul to grow up - and if they refuse to do their Constitutional DUTY then the voters need to replace them with adults who are willing to do the job that they have been hired to do!

The Bullet Minnesota Dodged

The Wall Street Journal tells the story of what could have been in Minnesota.

Here's a two-minute drill in soak-the-rich economics:

Maryland couldn't balance its budget last year, so the state tried to close the shortfall by fleecing the wealthy. Politicians in Annapolis created a millionaire tax bracket, raising the top marginal income-tax rate to 6.25%. And because cities such as Baltimore and Bethesda also impose income taxes, the state-local tax rate can go as high as 9.45%. Governor Martin O'Malley, a dedicated class warrior, declared that these richest 0.3% of filers were "willing and able to pay their fair share." The Baltimore Sun predicted the rich would "grin and bear it."

Wow does THAT sound familiar?????? Minnesota's Legislature couldn't balance the budget either. I don't care what the Speaker of the House says, when you are spending $34 billion dollars and you are only bringing in $31.6 you are spending MORE than you bring in and that is NOT the definition of a balanced budget! Anyone who says that is needs to go back to 3rd grade math class! Oh and then there was the unaddressed $6+ billion in the current deficit that they never addressed.....

One year later, nobody's grinning. One-third of the millionaires have disappeared from Maryland tax rolls. In 2008 roughly 3,000 million-dollar income tax returns were filed by the end of April. This year there were 2,000, which the state comptroller's office concedes is a "substantial decline." On those missing returns, the government collects 6.25% of nothing. Instead of the state coffers gaining the extra $106 million the politicians predicted, millionaires paid $100 million less in taxes than they did last year -- even at higher rates.

No doubt the majority of that loss in millionaire filings results from the recession. However, this is one reason that depending on the rich to finance government is so ill-advised: Progressive tax rates create mountains of cash during good times that vanish during recessions. For evidence, consult California, New York and New Jersey (see here).

The Maryland state revenue office says it's "way too early" to tell how many millionaires moved out of the state when the tax rates rose. But no one disputes that some rich filers did leave. It's easier than the redistributionists think. Christopher Summers, president of the Maryland Public Policy Institute, notes: "Marylanders with high incomes typically own second homes in tax friendlier states like Florida, Delaware, South Carolina and Virginia. So it's easy for them to change their residency."

....like Tom Golisano did?????

All of this means that the burden of paying for bloated government in Annapolis will fall on the middle class. Thanks to the futility of soaking the rich, these working families will now pay Mr. O'Malley's "fair share."

In Minnesota's case, it's not just the Middle Class that the DFL wanted to soak. With new taxes on cigarettes and liquor (in Minnesota) and junk food, fast food and soft drinks (on the national levvel) this new generation of Democrats are proposing some of the most (dare I say it) regressive taxes we have EVER seen!

As I said the other day - these are not your grandparents Democrats. These Democrats don't care WHO they soak as long as they can get their special interest spending projects passed. Thankfully (for Minnesota) we had a Governor who was willing to do what the DFL led Legislature refused to do - balance the budget.

Thank you Governor Pawlenty for doing your job.

Defending A Rigid Theology

Well the Governor did it. He went and used his line item veto power to do what the DFL has refused to do all session - balance the state budget as is constitutionally prescribed. If you had listened to the hyperbole that ensued from folks like DFL Chairman Brian Melendez...

We may as well not have held an election in 2008. First, former senator Norm Coleman has deprived Minnesotans of their full representation in the United States Senate, refusing to concede that Al Franken got more votes and is entitled to the seat. Now, Coleman’s crony Governor Tim Pawlenty has threatened to dispense with the elected Legislature, and run the state’s finances in the middle of a historic economic and fiscal crisis using only his executive powers of line-item veto and unallotment. Next week, after the Legislature adjourns its regular session, Minnesotans may wake up in the closest thing that America has had to a monarchy in 233 years.

...to the Speaker of the House...

Gov. Tim Pawlenty has announced his intention to go it alone on balancing the state budget if an agreement satisfactory to him cannot be reached by Monday. He will unallot $3 billion in state funding for areas such as health care, schools, public safety and local government aid. He indicated these cuts will be similar to his first budget proposal; if this is true, Minnesota will lose thousands of jobs in nursing homes, hospitals, schools and public safety. The health care of our families and seniors will be diminished, and the education of our children will be compromised.

...you would think that the best efforts of the Legislature were by-passed by a power crazed mad-man. However their best protestations are (as usual) about as far from the truth as the east is from the west. Britt Robinson, from PIM, laid out a laundry list of DFL missteps that (in his analysis) were precursors of the events that we saw today.

Literally months before the start of the 2009 session, the challenging scenario confronting the DFL leadership was already clearly apparent: The state’s general fund would be billions of dollars in deficit, and a nationally ambitious governor would do anything possible not to raise taxes. But Tim Pawlenty was vulnerable on two fronts, both of them exacerbated by the deficit. First, basic services such as education and health care increasingly lack the funding necessary to ensure that Minnesota will retain its traditionally above-average quality of life, and regain its standing, lost during the Pawlenty Administration, as a robust regional economy. Second, for the past decade, the state budget has been put together with accounting gimmicks and baling wire, without the basic structural integrity necessary to guarantee that there will be revenue available to underwrite ongoing government services.

First off I do have to agree with Chairman Melendez on one thing. We might as well NOT have had an election in 2008 with the way that the Legislature handled the power vested in them by the voters of Minnesota. The DFL leadership knew when the session adjourned last summer that the state of Minnesota was facing a record budget deficit and they knew when they adjourned last summer that all budgets - from the state down to the taxpayers were facing ever tightening budgets. They could have (and should have) started working on a solution to the state's woes last summer (as the Governor did). Oh they will cry and tell you that they did not have access to the same resources that the governor had but that is total buncome! As a co-equal branch of the state government they have the right to the same resources that the governor has - all they need to do is go to the state agencies in question and ask!

Thus far this session, Pawlenty has predictably stuck with his simple but compelling message that Minnesotans should not be burdened with increased taxes at a time when many are struggling for solvency in this brutal recession. In response, DFLers could have chosen between two messages that are nearly as simple and equally compelling.

One would be a full-fledged “Invest In Minnesota” message that argues for a significant tax increase along with the usual accounting gimmickry so that the education and health care needs of Minnesotans are adequately funded. DFLers can rightfully argue that previously substantial investments in education were rewarded by decades in which our state economy outperformed the national averages, and that a major reason for the current spike in health care spending is the victimization of middle-class Minnesotans who have lost their jobs and/or health insurance in this recession.

Or the DFLers could have opted for a “Fiscal Integrity” message, pointing out that Pawlenty’s no-tax stance is literally unaccountable and irresponsible, hamstringing prudent planning and innovative flexibility by obliging future governors and Legislatures to patch over increasingly large structural deficits, even as services fall further and further short of keeping up with needs.

Instead, DFL legislators have half-heartedly commingled these messages and thus botched them both...

The self-inflicted legislative chaos allowed Governor Pawlenty to play the DFL like a finely tuned fiddle again and again. He saw that the House and the Senate were not talking and he offered compromises that he knew the Senate would partially accept but the House would reject out of hand. That showed the people of Minnesota how rigidly the DFL was sticking to ideology - as opposed to actually doing the people's business.

The DFL's biggest misstep though was coming into the Session unprepared or unwilling to tackle the budget right out of the gate. They held all the cards - a veto proof majority in the Senate and a near veto proof majority in the House. They knew going into the Session that this budget deficit was huge and a realist would understand that spending cuts and tax increases were inevitable. Instead of compromising, they held tightly to ideology. That allowed Governor Pawlenty to stick to HIS ideology - his no new taxes pledge.

In the end, the inflexibility that the DFL showed and their refusal to work together (much less working with the Governor) set the tone for the finish of the session. They could have taken advantage of their gains last November and used it to make even bigger gains in 2010. But instead, the DFL leadership sacrificed their Consititutional right to set the budget at the alter of ideology and in the end, that could (and should) spell the end of their large majorities in the Legislature. Well done Madame Speaker!

Update and Bump: Sarah Janecek said it best I think...

Hasn't this entire legislative session been about DFL indecision?

I think we can all agree that this was the case. They couldn't decide what to prioritize so they prioritized nothing. They were asked to make spending cuts, but they couldn't decide what to cut so they cut nothing...the list goes on and on!

The Best Of Both Worlds

Yesterday, I put up a post defending spending on transit as a warning to my Utah neighbors not to develop "ridership" myopia when it comes to deciding whether or not to continue spending on FrontRunner. Today I would like to direct the discussion back toward my former Minneapolis neighbors and discuss why their "transit only" myopia of today is not good thinking. The lesson comes courtesy of Mr. Lane Beattie who is the President and CEO of the Salt Lake Chamber (HT Utah Policy Daily).

You may have seen the TV commercial in which a motor oil company searches for the worst commute in America. It won’t surprise AJC readers that one of the featured commuters is trying to drive to Atlanta.

Had we not taken action a few years ago, it would have been equally appropriate to feature Salt Lake City.

By their nature, transportation and transit issues cannot be solved by an individual city or county government. The problems are too large and the scope of influence too wide. The cooperation of city, county and even state government is essential to creating a solution.

Emphasis mine. This is a lesson that my friends on the right AND the left must learn. The state Legislature can not dictate and the county can not say "keep your hands off". They need to be able to work on the solution that fits their regional needs best. If that best is commuter rail, then St. Paul you need to allow the discussion into commuter rail!

In Utah, a big part of our success stems from our ability to present a holistic solution including both roads and transit. Any time we found ourselves getting too far in one camp or the other, the going got rough. The best policy is to acknowledge and advocate the need for both modes.

Diversity of transit options was pretty much the gist of my post yesterday. Offering a diverse choice of transit options WORKS! See Europe, New York City, Chicago, Boston and a whole host of other cities.

I call a “roads-only” focus a “rear-view mirror mentality”; it misses the trends happening right before our eyes. The flip side is a “transit-only” focus, which I consider a “pie-in-the-sky mentality.” Get over it: Most people will never let go of the freedom, comfort and convenience of the automobile.

Focusing on one or the other is like asking which is more important, the gas pedal or the brake. You’ve got to have both.

This point can not be stressed enough! YOU HAVE TO HAVE BOTH!

Over the next 21 years the population of Utah is expected to increase by 56 percent, according to the Census Bureau. There is no time to relax or declare our problem solved. We’ve gotten ahead of the curve and must work to stay ahead.

This is where the Met Council really put the Minneapolis Metro area in the bind it is in today. Rather than focus on tranist issues when the metro was growing, it focused on maximizing green space, which while important was the sole myopic view of the Met Council to the exclusion of everything else and that IS bad.

Because we faced our transportation challenges head on, worked together and kept the big picture in mind, we avoided the oncoming catastrophe of crippling gridlock at the Crossroads of the West.

Alleviating traffic issues has increased efficiency for businesses, keeping many from downsizing during difficult times. Funding road and rail projects puts thousands of Utahans to work and stimulates our economy. It’s one reason Utah has fared far better than the rest of the nation during the current economic downturn.

And this (along with a well run state that does not tax it's businesses out of existence) is why Utah was one of the last states to enter the recession and it will be one of the first out! The "Happy to Pay For A Better Minnesota" can mewl all they want about the "quality of life" in Minnesota, but when people can not afford to live there because all the jobs are gone, you have no quality of life! Balance is the key and while not perfectly there, Utah has certainly tried to come close. It is a lesson that Minnesota lawmakers need to learn real fast if they want to turn the economy around and have a real "quality of life".

The Shape of Things To Come

Tempers flared in the MN House yesterday during debate on the Omnibus Transportation bill.

If Tuesday paints a picture of how the 2009 legislative session will end, it won't be pretty.

An exchange between legislative leaders and a key Pawlenty administration official Tuesday morning was as tense of an exchange as seen in the Capitol this year. And things got worse a few hours later in the House chamber.

Republicans shouted down the Democratic speaker when she ruled that time had expired on a transportation debate, with two GOP amendments not yet heard.

Let's hop in Mr. Peabody's way back machine for just a moment to set the stage for yesterday's fireworks. Back in February, the House Floor Rules were changed to limit the amount of time for floor debate on issues. Discussion of this started last summer (as reported by the St. Paul Legal Ledger and apparently no where else). Even back then there was objection to the limit saying that it would not not allow representatives the ability to offer amendments and changes to the bills. Well yesterday those predictions came to fruition.

Back to today - house Minority Leader Marty Seifert was understandably concerned about the turn of events...

"I don't know if this is some type of flexing of the muscles or what," an angry House Minority Leader Marty Seifert, R-Marshall, said. "If you gag these two people from offering their amendments, who's next ... who are you going to gag next?"

Representative Bernie Lieder(DFL Crookston) also expressed concerns about the tone that this sets for the remainder of the session given that the real work of the body - balancing the budget deficit - has yet to be done!

Lieder was not optimistic for a smooth end to the session, which must pass a $33 billion budget while plugging a $4.6 billion deficit.

"I don't think the last three weeks are going to be easy," he said.

When the Speaker finally realized that she could not allow debate to end without hearing the final two amendments, she waived the white flag.....

The hour-long dust-up ended when House Speaker Margaret Anderson Kelliher, DFL-Minneapolis, sent word to Seifert that if Republicans quit objecting, Democrats would allow the debate to resume and GOP Reps. Torrey Westrom of Elbow Lake and Mark Buesgens of Jordan could offer the remaining amendments.

Which is as it should have been.

Yesterday's dust up is the calm before the storm. Without a doubt the most contentious bill will be the Tax Bill once it comes out of conference. The House and Senate leadership is going to have to lean hard on their more vulnerable members (members who represent more conservative districts). They got away with voting against the bill once - they will not be afforded that luxury again! As we saw last session with Rep. Mary Ellen Otremba (who reportedly was threatened with losing her committee chairmanship if she voted against the final Transportation Bill) was not allowed to vote her conscience and for her constituents even though she knew the Transportation Bill was not in their best interests. The Tax Bill just barely passed both chambers - 35-31 in the Senate and 68-65 in the House - and those Democrats (Will Morgan - Burnsville, Sandra Maisin - Eagan and Maria Ruud - Eden Prairie for example) who voted against it will be under intense pressure to make sure that they vote the way that their leadership dictates on the final bill.

Those vulnerable members of the House and the Senate have a very painful choice to make in the coming days. They are either going to have to vote their leadership or their district! Given their past records, I am willing to stick my neck out and say that the answer will be they will vote as their leadership dictates...for they fear the Speaker and her first lieutenant Tony Sertich more than they fear the voters back home! If you live in their districts, you may want to help change that perception.

Finally...

With 26 days left in the Legislative session (and with very little fanfare I might add), the House and Senate DFL majorities release their solution to the $6.4 billion dollar budget deficit. The Bemidji Pioneer reports...

ST. PAUL – Legislators arrived at the Minnesota Capitol in early January with five months to fix a multi-billion-dollar budget deficit.

Now, lawmakers are staring at the same massive budget problem and a deadline just three weeks out. And no one knows how the problem will be fixed.

Much of the Legislature’s heavy-lifting always occurs in the session’s final weeks – or, more accurately, days – as lawmakers scramble to pass a new two-year state budget, erasing a projected $4.6 billion deficit by the constitutional May 18 adjournment date.

Before we start looking at what the DFL led legislature finally proposed one has to point out again that they have had over 4 months to put forward a thoughtful solution to this bill. However, in their usual fashion, the DFL has pushed the state of Minnesota to the brink of a shutdown! It is no coincidence that this biennium budget, as with the 2005 budget bienium, happens to come on the political eve of a gubernatorial election.

After a year of knowing that there was a recordbreaking budget deficit (remember, the Legislature was told at the end of the LAST session that the deficit was going to be this bad) the DFL Legislature had all the time and resources that they needed to fix this pending crisis. Then when the took to the floor in January, the choose not to do anything. In fevruary, they choose not to do anything...March the same...Instead they spent that time writing legislation designed to blacklist and punish businesses that chose not to be unionized! It was not until April 21 that they introduced the first bill to try to fix the problem and their answer was predictable...they proposed tax increases on cigarettes, liquor and beer, snowmobiles, downloadable music (the so-called iTunes tax), clothing, food and gifts that you give to others (again). When they did finally decide to cut spending, the decided to cut school funding, public safety, hospital funding and veterans care funding. Meanwhile, Senators like St. Cloud's Tarryl Clark are sending out push polls to their constituents asking what "essential" services they would cut - even though the House and Senate proposals were already in committee (isn't it nice how they ask for your input AFTER THE FACT?). If the tax hikes (some quite regressive) aren't bad enough, the DFL Tax Bill repeals tax deductions for mortgage interest, charitable contributions (we can't have those charities competing for your tax dollars after all) and K-12 education expenses. The DFL's tax bill even takes away a gas tax credit that was designed to protect POOR PEOPLE from gas tax increases!

Even some DFLers were horrified by the increased taxes! Others came flat out and admitted what the rest of us have long said - increased taxes will push consumers to buy their goods elsewhere.

Senate Taxes Committee Chairman Tom Bakk, DFL-Cook, said eliminating the current mortgage interest deduction could hurt Minnesota’s high rate of home ownership and higher alcohol taxes would drive some liquor shoppers across the Wisconsin border.

Emphasis mine....

There can be no mistaking the DFL's motive here. House Speaker Margaret Kelliher Anderson is toying with the idea of running for governor as is Senator Tom Bakk, former House Minority Leader Matt Entenza, Representative Joe Atkins and the aforemention Senator Clark from St. Cloud. All of these legislators have a stake in making Governor Pawlenty (if he runs for re-election) or any Republican Legislator who decides to run look bad by forcing another government shut-down. It is their hope that they can again (as they did in 2006) blame the Governor Pawlenty and the Republicans for this government shut down. Will the voters of Minnesota fall for this blatent ploy again? Only if the Republican Party runs the same kind of lame campaign that they did in 2006. Hopefully they have learned a lesson from the last two elections and will put together (either as a party or as individual candidates) a campaign that finally holds the DFL accountable for their deceptive actions. Remember - NOT ONE DFL candidate for the House ran on tax increases in 2008. As a matter of fact they all ran as "fiscal moderates" who were going to be respectful of the taxpayers resources. Now that they have shown their true colors, it is up to the Republican candidates and the Republilcan Party to take advantage of that - if they want to regain the House in 2010.

See What You Started Governor?

During the last budget biennium Governor Pawlenty, in an attempt to say he stood by his "no new taxes" pledge insisted that his new cigarette tax was really a "fee". "It's a tax" activists on the left and right said - no a "fee" countered the governor...."tax" the activists asserted..."FEE" the governor insisted..."whatever" the activists shrugged as they walked away muttering something about walking and ducks....Well now the Governor's insistence is coming back to bite us all in the wallet yet again.....Representative Karen Clark (DFL-Minneapolis) has authored a pair of bills that, under the guise of being a "health and judicial impact fee" are designed to raise the taxes on beer and alcohol as much as 100%! Rep. Clark's "fee" is supposed to offset judicial fees and alcohol related court costs...right??? After all - the bill's respective titles do imply that. However, half of the fees go to (wait for it....)......


THE GENERAL FUND! This tax is not about offsetting "judicial" or "health" costs due to alcoholism. It's just one more way for the Democrats in the Legislature to pick the pockets of hardworking Minnesotans yet again!

Thanks for the latest sterling example of what the DFL is all about Rep. Clark! We really appreciate it.

The Blame Game

My friend Gary Gross has a post up at LFR this weekend about House Speaker Kelliher's unfortunate claim that they have only "had a few days" to deal with the realities of the Minnesota budget deficit and why the DFL does not have a proposal on the table while they take pot shots at the Governor's proposal.

Kelliher notes that the governor had all of the state's commissioners and finance experts working on the budget for months. The Legislature does not have those resources.

"He's had 7½ months. It's unrealistic to expect us to respond in just a few days,'' she said.

Speaker Kelliher's words are disingenuous at best. We knew, in January of 2008, that we would be facing a huge budget deficit in 2009. In spite of that, they went on a spending spree of epic proportions last session - making the deficit even larger than anyone could have imagined.

Some had an inkling as far back as 2007 that this could be coming...a warning that was repeated again in March of last year.

Where the Speaker's claims really fall flat is when you think back to the last time Minnesota faced a budget deficit. That was back in 2003 and the House Leadership (comprised of Rep. Steve Sviggum and Rep. Erik Paulsen) came to St. Paul in January ready to tackle the pending deficit. They didn't wait for the Governor's plan to be hand delivered to them as some today are doing....

(Larry) Pogemiller said the Legislature ALWAYS works from the governor's budget proposal. "We don't even have complete drafts of his bill yet,'' he said. "When we get the full proposal, we will work off what he has. You see what's doable and where there might be disagreement.''

The "leadership" of this Legislature has never been shy about blaming others for their shortcomings, so you really can't be surprised that they continue to blame others for their lack of commitment to fixing the problems that the state is facing. While other Minnesotans are doing the adult thing and making the hard choices, the Legislative leadership fiddles around with trivialities like bike trails and parks and trails...and spending lots, lots, lots, LOTS more money that they do not have.

Emperor Nero has nothing on the DFL leadership in Minnesota.

Audlt Answers

While the MN DFL House leadership is twiddling their thumbs and pinning their hopes on an Obama federal bailout, the House GOP leadership has been busy proposing REAL budget cutting ideas.

Four proposals, offered by Representatives Marty Seifert and Tom Emmer, would have saved taxpayers money and shown the public that legislators are not above playing a role in balancing the budget. Seifert, R-Marshall, said the Legislature should hold itself to the same standard as the rest of state government.

"If we are going to be searching in every nook and cranny for ways to save money, it is hypocritical to set our own nooks and crannies off limits," Seifert said. His proposals included reducing House members' allotment of stationary and stamps, as well as reducing reimbursements for Internet, cell phone and other communications services.

A proposal from Emmer, R-Delano, – initially introduced as an amendment to House's Temporary Rules – would have cut off member housing allowances following adjournment in 2009. The housing allowance, which during the DFL-controlled 2007-2008 legislative session cost Minnesota taxpayers between a quarter and half-million dollars, would be returned to its 2005-2006 level when the Republican majority limited total out-of-session payments to less than $19,000.

The House DFL caucus reacted in their usual manner.....they voted them down in committee!

Honestly, which makes more sense - cutting per diem, postage and other Legislative expenses and combining committees or hanging your hopes on the possibility of a federal bail-out.

The Minnesota Legislature needs to lead and one of the ways it can show it's leadership is to do the same things that Minnesotans across the state are doing - cutting expenses FIRST!

UPDATE: It appears that I am not the only one who is making these prudent adult suggestions.

The commission's 34-page report that makes several recommendations for dealing with the ups and downs of the state budget.

Kiedrowski, co-chairman of the commission, said the report contains the first 25-year projections for state finances that have been prepared for the state.

Total state spending in the next 25 years is projected to increase 5.4 percent a year and health care costs in the state budget will rise at an average annual rate of 8.5 percent. Revenues are projected to increase 3.9 percent a year in the next 25 years, according to the report's projectoins.

“The public health care costs is the fastest rising cost in the state budget and far exceeds our revenue capacity,” Kiedrowski said.

Kiedrowski, who was Finance commissioner during DFL Gov. Rudy Perpich’s administration, said between $1 billion and $2 billion of the budget deficit for 2010-2011 is attributed to the state’s structural imbalance.

Kiedrowski said demographic changes in Minnesota will also have an impact on future budgets.

The commission isn’t recommending tax changes to ease the state’s volatility problems.

But the commission recommends a couple of ideas to help manage budget volatility in the future.

“I think what’s critical in this legislative session is for (lawmakers) to admit the problem, how they got into this problem and, in a sense, to adopt a work-out plan such that they have a financial goal in sight as to where they want to get as the economy recovers,” Kiedrowski said.

Until the DFL Leadership gets a grip on the FACT that spending is out of control, there is no solving Minnesota's budget deficit.

Show Me The Money

Not satisfied to fleece everything they can from the people of Minnesota, the Minnesota Legislature has decided to reach into the pocketbooks of the rest of the American people.

Show me the money!

That could be the motto for the Democratic-Farmer-Labor majorities in the Minnesota Legislature this year.

House and Senate DFL leaders announced Monday that their top priority for the 2009 session is to get all the federal money they can from President-elect Barack Obama's planned economic stimulus program.

While other states are doing the responsible thing and cutting spending, the Minnesota Legislature has bellied up to the federal trough. The same people who were opposed to bailing out the irresponsible management at Northwest Airlines back in the day are now lining up to get bailed out themselves.

So I will ask the Minnesota Legislature the same thing that they asked the Northwest CEO Doug Steenland back in 2001 - why should the citizens of Utah reward you for your mismanagement of your state? Hmmmmm??????

Hang On To Your Wallets

Hang on to your wallets Minnesota - the legislature will soon be in session. Next Tuesday, the Minnesota Legislature starts to deliberate how it will tackle the estimated $5.2 billion budget deficit. Already some legislators are drawing "lines in the sand" between the cuts and their pet projects (such as education and social programs) even as Minnesota taxpayers are tightening the belts another notch tighter. Meanwhile, other legislators are going back to their district bearing the bad tidings of cuts to come.

If you want to have a say in how the deficit is resolved, the Minnesota legislature wants to hear FROM YOU. The House has set up a webform where you can tell them what you want to see happen to resolve the deficit. Let them know how you feel - TODAY!

Compare And Contrast

Utah and Minnesota, like every other state in the Union, are facing a severe budget short-fall. How the two state's legislature is a telling study in contrasts. Utah legislators have gotten out the green eye-shades and sharpened their pencils.

House Republicans want to cut 15 percent from next year's state budget to help make up for what is expected to be at least a $1 billion shortfall. Incoming House Speaker Dave Clark, R-Santa Clara, says under the House plan Republicans agreed to Monday, no state agency would be spared.

"This is an unprecedented time. We don't have a historic benchmark to figure out $1 billion-plus cuts in the state of Utah," he said.

"I don't know how any form of state government is not going to be impacted at this point in time."

Their counterparts in Minnesota (on the other hand) are pointing the finger.

Democratic legislative leaders are blaming a lack of jobs for the state's projected $5.2 billion budget deficit. And they're pointing some fingers at the agency responsible for job creation, calling for a major overhaul at the Department of Employment and Economic Development.

House Speaker Margaret Anderson Kelliher and others are stressing job creation when discussing the deficit. She told Minnesota Public Radio it's time to re-examine the state's economic development efforts.

Because after all, they can't be responsible for a $7.2 billion dollar swing in the state budget. It HAS to be someone elses fault and who better to blame than a Republican appointee and the business community!

And that in a nutshell is why the state of Minnesota is $7.2 billion in the red.

Change That Will Bankrupt You

On Monday (12/1) I got the following email from my former State House Rep (yes I am still on his email list).

The biggest issue of the upcoming 2009 legislative session will be how to balance the budget. As we approach the start of session in January, the scope of what we face is coming into focus. Here is the latest
information: The state collected $31.4 million less in taxes than had been expected for the month of October. This is the first time that tax receipts have fallen below predictions since the state rolled over its calendar into a new fiscal year on July 1....
On December 4, a complete budget forecast will be released that predicts how much tax money the state will collect versus the expected growth in government spending. It is widely believed that this will show spending outpacing revenue by a billion dollars or more. Unlike the federal government, Minnesota has to have a balanced budget. We can*t just spend away and run up massive deficits with no regard for how to pay them back. It also means that we have to make tough decisions every two years about how we tax our citizens and how we spend that money.

Pardon the interruption but I have to remind you all that two years ago when the House DFL caucus was handed an overwhelming majority, the State of Minnesota had an almost $2.2 BILLION DOLLAR surplus! Even then, Rep. Beard was warning about the pending recession (as I remarked here). The DFL Majority, in their eternal wisdom, went on a spending spree of epic proportions. Well on Thursday, the Strib reported the grim forecast - Minnesota went from a $2.2 billion dollar surplus in February of 2007 to an almost $6 billion dollar DEFICIT! That is a turnaround of over $8 billion dollars in less than two years!

My good friend Gary Gross has a couple of posts up about his State Senator Tarryl Clark from this week. She has alternately said that there is "no fat" to be trimmed from the state budget to "she" won't raise taxes in light of this record deficit and then points out that the House DFL Caucus doesn't have a lot of credibility when it comes to that pledge.

The week ended with this email update from SD35's other wonderful representative - Mark Buesgens.

Our government is in a deep, deep financial hole, and the first step to climbing out of it is to stop digging it even deeper. Spending went up almost 10 percent in the last two years, and 12 percent in the two years before that. In just the last four years, state spending has increased by a whopping $ 6.5 billion dollars. If the Legislature and the Governor could simply agree to go back to the 2005 spending level, we would be looking at a $1.3 billion dollar surplus.
Government’s role in helping our state achieve more prosperous times is to focus on taking actions that preserve liberty, ensure public safety and develop the necessary infrastructure for a vibrant economy.
Minnesotans are industrious, intelligent and hard-working. Provide them with the conditions for success and they will succeed. The attitude by some politicians that the people are ‘victims’ and government must save them by creating more programs and more spending will only prolong and deepen the current financial crisis. That attitude must be utterly rejected.

Put down the shovels indeed. Unfortunately that is a trait that the Minnesota Legislature is not prone to taking. The Minnesota budget has swung from big surplus to big deficit for years. From the top of the biggest wave to the bottom, the budget has gone from one extreme to the other...but what (if anything can be done)?

Simply put the Minnesota Legislature needs to learn how to truly balance a budget so that it is not tossed about like a reed in the ocean every time the economy hits a bubble or a burst! It needs to save during the good times so that it is able to weather the bad - just like normal, responsible taxpayers do.

In 2006, the voters of Minnesota voted for change. How are you liking that change?

Pinky Purple Minnesota?

From the "Is It Possible or Is It Too Little Too Late" comes this KSTP/Survey USA poll.

If the election for President were today, would you vote for ... (choices rotated) Republican John McCain? Democrat Barack Obama? Or one of the other candidates? Senator John McCain 46%, Senator Barack Obama 49%, Other 3% and Undecided 2%.

The sample size was 800 adults and it yielded 747 registered voters and 669 likely voters. The margin of error is 3.9%. The party breakdown was 32% Republican, 39% Democrats and 25% Independents.

The Party breakdown is pretty close for Minnesota - unlike the Minnesota poll that tends to sample 40 to 45% Democrats. I think that the the number of Undecideds is about right too. I find it very odd (and maybe a little unrealistic) that these national polls have 10 to 14% who say that they are undecided.

Does this mean Minnesota will flip on Tuesday. I doubt it. The sheer number of Democrats in the Twin Cities will probably carry the state for Senator Obama. But what it does mean is that the Republican Party of Minnesota has made progress in the last four years. It has been a long slow slog, but it is happening. While it may not mean much in the Presidential race, it could help not only Senator Coleman, but all of the state House and Senate Candidates. The Democratically led state House and Senate said that they would not raise Minnesota taxes and then the first thing they did was raise lots and LOTS of taxes. The voters have a long memory for broken promises and have rewarded politicians appropriately for doing so.

Four years ago, Minnesota was a solid blue purple state. If this poll is correct, it is no longer a state that politicians can take for granted. It is a pinker shade of purple and getting redder by the day.

A Tale Of Two Very Different States

It really is eye opening to get into a new state for a long period of time so that you can see the difference between the way the state you live in (or in my case lived in for 14 years) and the one you are in now. Case in point is how the current economic downturn is being handled by the State of Utah versus how it's hitting the State of Minnesota. First Minnesota....thanks to a slowing economy, state revenues are down $530 million, the reserves (rainy day fund) is down $33 million and spending is up $64 million, leaving the state in the hole $935 million - a far cry from the $2.2 BILLION surplus that the state had at the end of FY 2006. That led some legislators to come flat out and say "I Told You So".

One year ago the economy was doing well and the Legislature was overflowing with ideas on how to spend the $2.2 billion state budget surplus. It was the first time in several years that we weren't facing a large deficit. A new cast of leaders was eager to validate its sweeping victory in the 2006 election by turning their campaign promises into promises kept.

In the midst of the spending frenzy, I wrote to constituents my belief that "we need to be prudent with spending and not leave ourselves in a tough situation if the economy takes a sudden downturn." There was at the time plenty of historical evidence to suggest such a downturn could take place.

Utah, on the other hand, took many of the steps that Rep. Beard laid out in his legislative update. I know Rep. Beard will not be surprised at the results of such prudence.

On Friday, the Utah State Tax Commission released preliminary year-end revenue numbers.

When you look at the numbers, you will notice we're collecting less revenue than originally projected. That is not a surprise (we're actually pleased it's not worse). We're still within the range we predicted last month.

No one wants to be right about bad news but legislative dinosaurs like me have been through enough economic cycles that we felt the downturn coming and planned ahead for it. We have some carry-forward money, a healthy Rainy Day fund and we socked away an additional $100 M for the Uniform School Fund. In addition, we crafted a FY 2009 budget that is significantly lower than the FY 2008 budget.

From the article in the Salt Lake Tribune:

"We intentionally reserved a large carry-forward because we anticipated a slowdown," Valentine said. "Utah is very well poised to weather any kind of economic downturn."

Some states are having to cut services because of dwindling tax revenues, said State Tax Commission spokesman Charlie Roberts. "We're in a lot better fiscal shape than most," Roberts said, pointing to Utah's fiscally conservative bent and efforts to foster a favorable business climate as contributing factors.

So, we need to pay attention, spend carefully, and act wisely - but we don't need to be afraid. In keeping with being the best managed state in the nation we have already asked state agencies to plan ahead on where and how they can cut, should that become a necessity. I'm hoping it won't.

The Minnesota Legislature can and should take a lesson from their bretheren in Utah. Economic cycles are the norm. A little prudent planning, forethought and a lot of self-discipline can (in the long run) save your state from being blown around by the inevitable economic storms of life. Just as a wise worker sets aside money (and spends wisely) in case of a loss of income, the state should be setting aside money and wisely spending their money - in case of a loss of income. That is supposedly what we pay the Legislature to do.

The More Things Change, The More They REALLY Stay The Same

Back in November the Minnesota DFL won 85 seats, giving them a clear majority. A couple of days later, the House DFL leadership released their updated committee and sub committee list. King posted on it here and linked back to a HRCC spreadsheet that showed the committee set up.

Well today I get, in the inbox, a Session Update (I thought they adjourned Sine Dei last month?) relating information on House Committee testimony that they received today in the House Governmental Operations, Reform, Technology and Elections Committee.

A cumbersome committee structure is a barrier to public participation and process transparency.

It’s a situation that concerns Geoff Barsch, president of the Minnesota Governmental Relations Council, who offered recommendations for change to the House Governmental Operations, Reform, Technology and Elections Committee. The committee is looking at ways to improve the legislative process.

Too many committees lead to overlap and bills not being fully vetted, Barsch said.

He said it is hard for an experienced lobbyist, like himself, to follow the process, but nearly impossible for the general public. “More and more bills are being sent from one committee to the next with work left to be done, and we keep hearing this phrase, ‘This bill has a lot of stops to make before it gets to the floor.’”

Now I don't know if this is new information to the House or not, but if it is new to them it is yet one more example of just how out of touch with the public the DFL leadership structure is. If this is not new to them, it shows voters the lengths that they (the DFL leadership) will go to in order to keep the involvement of the governed out of the business of governance. It shows how important it is to them to keep us like mushrooms....always in the dark.

I would like to give them the benefit of the doubt and say that this is not "new" to them but when I do that it still does not paint the House leadership in a good light. Actually - neither option portrays the House DFL leadership well, which in and of itself is a condemnation on their leadership.

Lessons 3

While I certainly meant this to be a series, I never expected it to be a DAILY series....

Today's lesson comes to us from the great state of Florida where they have found a way to make health insurance affordable for the 3.8 million Floridians who do not have access to insurance.

But the Florida reform, which both houses of the legislature approved unanimously, renounces Mr. Obama's favored remedy: It nudges the government out of the health-care marketplace. Insurance companies will be permitted to sell stripped-down, no-frills policies exempted from the more than 50 mandates that Florida otherwise imposes, including for acupuncture and chiropractics. The new plans will be designed to cost as little as $150 a month, or less.

Emphasis mine. The Florida Legislature has figured out something that the Minnesota Legislature needs to figure out. Mandates make things cost more! It's really that simple!

Mr. Crist observed that state regulations increase the cost of health coverage, and thus rightly decided to do away with at least some of them. It's hard to believe, but this qualifies as a revelation in the policy world of health insurance. The new benefit packages will be introduced sometime next year and include minimum coverage for primary care and catastrophic expenses for major illness.

Of course, the defenders of government interference are not happy with this development.

Critics are already saying that, without mandates, the plan won't guarantee quality of care. That's purportedly why the states have imposed more than 1,900 specific-coverage obligations.

However, the WSJ writers give that objection the slashing it so richly deserves.

These government rules are imposed without regard for how much they will cost and who will bear the burden. In practice, the costs are disproportionately carried by lower- and middle-income workers, who already on average have more limited insurance coverage as part of their compensation, or none at all. When prices rise because of mandates, the less affluent are often forced to make an all-or-nothing choice between "Cadillac coverage," which involves just about everything, or going uninsured. In other words, they're prohibited from buying the lower-cost options that might be better suited to their needs.

A great example is from the Logical Household. No one in the Logical Household will EVER need treatment for Tay Sachs Disease or Sickle Cell Anemia. However, because of Minnesota state mandates, our insurance company is required to provide it to us! Now if we were to adopt a Jewish or African American child, that coverage would indeed be necessary, but as free people we should be ALLOWED to make that decision for ourselves! Not have the government decide it for us.

The people of Florida should be proud that their legislature took the biggest step to date in making insurance affordable to those who need it. Will the Minnesota Legislature be the next to make this bold decision? We can only hope!

It Depends On What Your Defination of "Unity" Is

Gary Gross has a post up on this Doug Grow MinnPost column.Gary does a great job tearing the base premise of the column apart but I do have to add to one comment. Gary remarks:

...Here’s how Grow finishes his post:

As November approaches, Republicans are trying to understand who they are. Meantime, DFLers are bouncing around the state more robust, and unifed, than they’ve been in a quarter century.


There isn’t any doubt that DFL legislators are unified....

If you watched the floor debates from the last month of the session you would know that the claim of unity is patently false! Whether the subject was Education funding or property tax relief, there were countless speeches on the House floor from outstate DFL'ers about how the leadership (who are all from metro cities) were overlooking the needs of outstate townships and giving everything to the metro. If there was any unity in that caucus, it was the unity of fear of the leadership. The DFL leadership made it clear, through out the session that there would be consequences to voting against them. When Rep. Mary Ellen Otremba voted initially against the Transportation bill, rumor has it she was told that she would lose her committee chairmanship if she voted against the over-ride.

Here's a little more from Grow on the "dis-unity" that he says is afflicting the GOP.

Like Tingelstad, Rep. Neil Peterson, a Republican from Bloomington, has felt the wrath of his party for joining the Override Six. He was not endorsed at his district convention, meaning he’ll have to run against a more pure, endorsed candidate in a September primary.

“The leadership in the party has become very conservative,” said Peterson. “It’s caused quite a rift. Next week, they have a (district party) monthly meeting that we’ve always been invited to to discuss how the session went. This year, I’m not invited. Neither is Ron Erhardt. They don’t even want to hear from us.”

Erhardt, from Edina, is another of the Override Six. He’s been representing his moderate district for 18 years but now is pondering whether to try to continue his job by running in the Republican primary or as an independent.

“I’m not sure if this is Ron Paul people or what,” said Peterson. “I just know I don’t pass their test.”

Mr. Grow...shall we talk about Reps. Joe Muellery and Willie Dominguez? It seems that your unity meme does not apply to them. You see, like Reps. Peterson and Erhardt, Reps. Muellery and Dominguez were not endorsed by their respective BPOU's this year. Do you suppose the Ron Paul people infiltrated those BPOU's as well? Or do you suppose that maybe, JUST MAYBE is it because, like Reps. Peterson, Erhardt et al, these representatives are no longer "representing" their district?

This idea of strict party unity is one of those memes (media themes) that just does not wash when put through the scrutiny of reality. The reality is that the local party unit decides if their representatives are really representing them and if they are not, it is the local unit's choice whether or not to endorse! In the case of Representatives Muellery, Tinglestad, Dominguez, Peterson and Erhardt the reality was that the BPOU did not endorse because the member in question was no longer "representing" the district. It has nothing to do with "party unity" and everything to do with "local representation".

Then again, I realize that local representation is a foreign concept to reporters and elitists like Doug Grow.

Watching the Legislature

So you don't have to...

We are quickly coming up on to the end of the session. Right now the House is debating on whether or not to accept the Conference Committee report on the Omnibus E-12 Spending Bill (HF 6). A couple of points that were made so far. First is that the Outstate Legislators are (AGAIN) complaining that they are being left out of the funding process. As you recall, this charge has been made during debate on a couple of the Omnibus Spending bills. Rep. Garafalo mentioned that this bill will end up being yet another PROPERTY TAX INCREASE for those cities who were not blessed enough to get funding from the state. Rep. Buesgens pointed out that the Conference Committee did not meet during the light of day where the concerned citizens could watch. No, the Conference Committee meeting was called to meet at 10pm on the Sunday night before the end of the session. Rep. Buesgens also read from a Star Tribune article that quoted the Chairwoman of the House Education Committee saying that the DFL was going to use this vote as fodder for the election this fall! Talk about playing politics with our childrens future!

Rep. Seifert (the author of the motion) has withdrawn the motion to send the bill back to committee which means that the minorities points were made so they are going to debate the bill. Or not....Rep Olson (R-Big Lake) re-moved to send the bill back to Conference Committee. He questioned why Seifert withdrew his motion. Rep. Seifert said that it was because he did not want to be charged with "filibustering" the bill.

Rep. Sertich rose to request a recess to the call of the chair with no time for return. The motion was passed. Rep. Sertich said that there was some important business that needed to be taken care of. I'm not sure what is going on, but I will keep you posted.

Curious.....now I do not know this to be a fact...but it sounds like the Governor may have had something to do with this recess. You see Governor Pawlenty does not like this bill...because of what it does to Q-Comp. Basically what this bill does (if I understand the debate correctly) is it guts Q-Comp going forward. Any school district who did not file an intent to adopt Q-Comp (like ISD 719 in Prior Lake/Savage) will only get a one time payment of $51.00 per pupil. However, those who did just squeek in (like Ed Chair Greiling's Roseville district did) they will not only get the $51.00 one time payment, they will get an additional $200 something (I have to go back and listen to the archives to get the correct figure) per pupil in annual funding! Oh and apparently not everyone knew about the March 31 Q-Comp deadline? Again, I have to listen to the House archives as that was something that was mentioned as almost a throw away line. As certain Democrat Exposers would say....Developing!

The House is still in recess as of 1:45pm with no expected time to return. I was told that both the Democrats and Republicans adjourned to caucus and that they would probably learn more about the reason for the sudden adjourning in caucus. One of the rumors (and I do have to stress that this is a rumor at this juncture) is that the Governor will pull his support from the renewed Central Corridor funding provision if this bill passes the House!

3:22 and they still have not reconvened.

Today in the Legislature

I just happened to turn on the Legislative session today and I see that they are debating the Conference Report on SF 100 which is the Embryonic Stem Cell research bill. I think I will have to follow this one for a while.

Rep. Dean has an amendment on the floor and he is in a rather heated debate with Rep. Phyllis Kahn on the amendment. One of the things that his amendment apparently wants to do is to put a restriction on embryonic stem cell research and would rather focus on pluripotent stem cells. I found it interesting that a Ph.D. had a hard time wrapping herself around the concept of pluripotent stem cell. I also find it interesting to see all of the contortions that she is going through, on the house floor to defend the experimentation on human life. Rep. Severson said that Minnesota Statute already has a prohibition on using embryonic stem cells. He said that the statute includes "movement" as an indication of "life" and that cell division is considered MOVEMENT!

Rep. Buesgens just got up and took Rep. Kahn to task on the claim that scientists need a legislative definition of what is "naturally dead" (which seems to be the gist of the Dean Amendment). He said that if these scientists can't "figure it out" then we need smarter scientists. He just brought up the fact that there are 70 disease cures that have come from adult stem cell research and NONE from embryonic. I posted on this during the last election.

One of the things that Rep. Kahn keeps using as a defense is that no embryo that was "destined" for life. The problem with that "logic" is that with in vitro fertilization ALL of those embryos were created to be "destined" for life. It is just that implantation has not taken place yet. She also keeps talking about how embryonic stem cell researchers are assuring her that this research is "necessary" . OF COURSE THEY WILL SAY THAT PHYLLIS!!!! Their livelihoods depend on it! She also keeps talking about how nothing good will come out of the debate in the House and that the Reps need to vote up or down on the bill as it is....

OK - I got busy and missed the vote on the Dean Amendment and just got back in time to see the Severson Amendment get voted down. However, I did catch Rep. Kahn again (in speaking against the amendment) say that the Amendment doesn't "make sense".

OK - amendment time is done....Rep. Seifert has asked for a call of the House. 68 votes are needed for the bill to pass.

VOTING TIME.....71 Aye - 62 Nays the bill is passed.....I'll have to review the House Journal to see if there are any votes of interest.