Sometimes, it’s not just the weather that makes you cranky. Sometimes, it’s the politicians that drive you nuts. Let’s take some folks out to the woodshed for some well-deserved constructive criticism.
Legislative Republicans: For Digging the Hole Even Deeper
A few days ago, we talked about how Legislative Republicans were engaging in some rather remarkable rhetoric about the state budget — and that their promises were unlikely to add up unless they introduced substantial cuts to all areas of the budget outside of K-12 education and health and human services. Well, yesterday, it got worse. House DFLers introduced their K-12 education bill, and Republicans (Rep. Kelby Woodard again) added to their audacious promises. Already faced with the prospect of coming up with nearly $1.5 billion in cuts, Woodard signed the GOP up for a 2% increase in the basic formula ($300 million) and fixing the special education funding gap (another $475 million on top of the DFL proposal). Doing all of what Woodard and the GOP claim can be done with “existing resources” would now take over $2 billion in cuts to other areas of the budget, or nearly a 20% across-the-board cut. Again, remember these numbers the next time a Republican legislator bloviates about how everything can be done with “existing resources” without offering any details of how they would make it happen.
Governor Mark Dayton and House DFLers: For Bonding Bills That Need Some Changes
This week, Governor Mark Dayton and the House DFL caucus released their proposals for odd-year bonding packages. Such requests are somewhat uncommon, as bonding is usually done in even years only, although additional bonding has become a frequent point of negotiation during budget stalemates in recent years. While I agree with DFL logic that we should take advantage of low interest rates to invest in infrastructure, an odd-year bonding package should imply that we’re doing some special things here. Too much of both proposals is taken up with the same old local projects (many of which have been already rejected in previous cycles), which can easily wait for inclusion in the usual even-year bonding package. The House bill has some stronger elements to it — particularly its increased emphasis on transportation and higher education projects.
It’s also inconceivable to me that you can have two $800 million bonding bills, none of which make any commitment to the Mayo Clinic “Destination Medical Center” proposal. As a state, we have an opportunity to support nearly $6 billion in private investment in the state with a maximum of $585 million in infrastructure improvements. We should be jumping at this opportunity to help create thousands of long-term, good-paying jobs in Southern Minnesota by including a substantial investment towards this project (between $75 and $150 million as called for in the stand-alone legislation).
I’d like to see a more focused bonding bill that focuses on transportation, higher education, State Capitol renovation, and the Mayo project — less expensive and more appropriate for an odd-year bonding package.
While we’re at it, let’s also deliver a kick-in-the-pants to the Democratic majorities in the Legislature for the leisurely pace of their budget bills so far. Last session, the Republican majorities had already passed through the first version of all the budget proposals by this point (to be fair, they then languished for a long time in conference committee before coming back for final approval). It’s time to shift the budget process into a higher gear, folks.
Minnesota Vikings Stadium Supporters: For Not Facing Reality
Here’s another issue where on the merits, Governor Mark Dayton and other Minnesota Vikings stadium supporters are right. In the whole scheme of things, the shortfall in e-pulltab revenues is a problem, but not a crisis. And stadium opponents are indeed grandstanding (here’s looking at you, Sen. Sean Nienow). But, guess what? This problem was foreseeable at the start — maybe not to this extent — but it was hardly a secret that there were serious concerns over the revenue projections. If you want to shut Nienow and the like up, the answer is simple: fix the bill and put in place a better backup plan. Trying to wait this thing out in the hopes the revenue situation will improve is only going to make this issue grow and grow and grow.
It would also help matters if the Legislative Commission on Minnesota Sports Facilities, which will have oversight of the Minnesota Sports Facilities Authority budget was more balanced from an ideological perspective. Of the 12 members, 10 voted for the stadium bill, one voted against (Rep. Jim Davnie) and one is a freshman (Sen. Karin Housley). Having some legislators with a more skeptical eye would be useful to the process.
Carver County GOP: For Wallowing in Sleaze and Extremism
Our good friends over at the Carver County GOP have taken to the Twitter. So far, they’ve managed to find links to just about every cheap and baseless conspiracy theory out there. Here are a few examples:
One would have thought that official Republican party bodies would have given up birtherism and bogus voter fraud nonsense by now, but I guess not. But if tinfoil hats are your thing, you should follow them.
The updated state budget forecast was released today, and it contains some good news. The projected budget deficit for 2014-15 has fallen by $463 million to $627 million.
Of the $463 million improvement, $323 million reflects increased revenues. Most of the revenue increase comes in individual and corporate income taxes and is primarily a result of changes in Minnesota law passed earlier this month conforming state tax law with federal tax law. On the spending side, the early opt-in to the Medicaid expansion as part of the Affordable Care Act continues to pay dividends for the state, as projected spending on these programs is projected to drop $64 million from the previous forecast.
The $627 million deficit figure does not include inflation on the spending side of the equation. Projected inflation for the 2014-15 biennium totals $854 million. Governor Mark Dayton’s original budget proposal did not include inflation into his baseline spending, so that amount was — in real terms — a spending cut.
Also of note in the updated forecast was the continuing dismal performance of electronic pulltabs, which are being used a funding source to back the bonds on the new Minnesota Vikings stadium. When passed last May, estimates of revenue in the 2012-13 biennium totaled about $35 million, but to date, the state has collected less than $2 million. As a result, revenue estimates have been slashed in half for the coming biennium, leading to the question of whether or not it’s time to start looking for a Plan B.
To further illustrate how poorly the e-pulltabs have fared, when the bill was passed, it was anticipated that by the end of 2015, pulltab revenues would have exceeded stadium expenses by $65 million, Now, pulltab revenues aren’t expected to catch up to expenses until 2021.
Gov. Dayton is speaking this afternoon outlining his reaction to the updated forecast, although he is not expected to release his new budget until the week of March 11. Dayton has signaled an increased renters tax credit and exemptions for capital equipment. Additionally, I will be posting an updated Brick City Budget proposal that reflects the new figures tomorrow (or later today).
The Minnesota Senate approved the proposal to build a new stadium for the Minnesota Vikings today by a vote of 36-30. Carver County’s State Senator, Julianne Ortman, voted no on the proposal. This was the final legislative hurdle for the bill, and the final action taken by the Legislature this session. Both houses have adjourned, and the 2012 campaign is underway.
Governor Mark Dayton may sign the bill as soon as this afternoon. Various reports indicate that team owner Zygi Wilf is en route to the state.
The Minnesota House approved the conference committee version of the bill to build a new Minnesota Vikings stadium on a 71-60 vote last night. Carver County’s House delegation split on the vote, with Rep. Joe Hoppe voting yes and Rep. Ernie Ledigier voting no, just as they did on the original version of the bill Monday night.
Here are the key provisions of the final bill:
- Here is the final breakdown of the financing: the team’s contribution will be $477 million ($50 million higher than what they originally committed to), the state’s contribution will be $348 million, and the City of Minneapolis will contribute $150 million.
- The state’s portion of the financing will be handled by allowing electronic pulltabs and bingo. If those sources do not produce adequate revenue to cover the state’s portion of the expense, the following provisions will “blink on” (in order) to cover the funding gap: a sports-themed lottery game, and a 10% tax on suites in the new stadium.
- The length of the team’s lease will be 30 years.
- Cost overruns on construction of the stadium will be the responsibility of the builder. (That should make for some interesting negotiations upfront with the company selected as the general contractor for the facility!)
- Naming rights revenue will count towards the team’s contribution
- The team receives a five-year exclusive arrangement to bring a Major League Soccer franchise into the facility
- Provisions instituting an internet sales tax and financing for the Mall of America expansion were removed from the bill
The Minnesota Senate will take up the bill later today. You can watch the action here. State Senator Julianne Ortman has indicated she will vote no on the current proposal because she does not favor using gambling as the means to fund the facility. If the Senate passes the bill, it will go to Governor Mark Dayton for his signature.
[UPDATE]: Correction made to the MLS provision. The bill does contain a provision that would charge rent to the prospective MLS team.
The Minnesota Senate approved a proposal to build a new stadium for the Minnesota Vikings last night by a vote of 38-28. Carver County’s State Senator, Julianne Ortman, voted no on the proposal. 22 of the 38 yes votes came from the DFL minority, while only 16 of the 37 GOP Senators voted in favor of the bill.
As with the House bill, dozens of amendments were debated. Key differences between the House bill and Senate bill include:
- The team contribution: the House bill calls for a team contribution of $532 million, the Senate bill calls for a $452 million contribution. Both of these amounts are higher than the $427 million the team has pledged, and the team has not indicated publicly a willingness to go beyond that amount.
- Financing the state contribution: The Senate bill includes some user fees in addition to electronic pulltabs used in the House bill. These user fees are a 10% fee on sale or rental of suites in the new stadium, a 10% fee on parking within one-half mile of the stadium, and a 6.875% fee on the sale of officially licensed merchandise at the stadium.
- Other provisions include a tax break for expansion of the Mall of America and $2.7 million in annual payments to the City of St. Paul to utilize on sports facilities (either retiring of debt on the Xcel Energy Center or construction of a new St. Paul Saints stadium are the most likely uses)
The bill now moves to a conference committee to hash out the difference between the two bills. Chaska State Rep. Joe Hoppe is one of the members of the conference committee. Once a final bill is agreed to by the conference committee, it goes back to the floor of each body, where they will take an up-or-down vote with no amendments allowed.
The Minnesota House approved a proposal to build a new Minnesota Vikings stadium on a 73-58 vote last night. Carver County’s House delgation split on the vote, with Rep. Joe Hoppe voting yes and Rep. Ernie Ledigier voting no.
40 of the 73 yes votes came from the DFL minority, while only 33 of the 72 Republicans in the House voted yes.
Dozens of amendments to the bill were debated yesterday, most of which were defeated, but there were some substantial changes to the bill that did get through. These include:
- Reducing the state contribution by $105 million and adding that to the team’s contribution, including a provision that would share naming rights proceeds. This is a potential sticking point in the bill, as the Vikings have not agree to pay more (at this point) than the $427 million contribution agreed to in the original bill
- Putting the Vikings on the hook for cost overruns during construction of the stadium; this is similar language to the Target Field bill, but it does imply giving the Vikings control over the construction process
- Increasing the lease from 30 years to 40 years
- Increasing the amount of revenue that has to be shared if the Wilfs sell the Vikings after the stadium is built
The bill moves to the State Senate today, which is in session beginning at 9 a.m. State Senator Julianne Ortman of Chanhassen has indicated she will be voting no on the current proposal.
Legislative Republicans are mad. Really mad. Their top priority for this year’s session fell to Governor Mark Dayton’s veto pen yesterday — their package of business tax cuts.
In fact, here’s what State Senator Julianne Ortman had to say about this yesterday:
“He vetoed our highest priority,” said Ortman said, who also is deputy majority leader. “I think there will be consequences. I think that he has lost the trust of many of my colleagues in the Legislature.”
That may well be true, of course. The real question is if such anger is justified.
Is it unusual for one side or the other to get shut out on their top priority for a session? Hardly. All you have to do is go all the way back to last year — when Gov. Dayton’s top priority was to close the state’s sizable deficit using a balanced package that consisted of about 75% spending cuts and 25% revenue increases. Did he get that? No way — the final deal instead borrowed from our schools and sold out future tobacco settlement revenues.
Yet, despite that, Dayton has worked with Republicans and agreed to compromise on some significant issues — including permitting and health and human services reforms. Dayton has also indicated willingness to sign some elements of the Republicans’ tax bill into law.
That’s the nature of divided government. Your top priority is probably going to be real low on the other side’s list. But the job description isn’t to punt when the top priority is off-the-table. Real leaders double down their efforts in those times and do the best they can for their party and their state. Too many Republicans seem content at this point to walk away with nothing — no tax bill, no bonding bill, and no Vikings stadium. Minnesotans should expect better.
Well, that was faster than expected. Today, legislative Republicans gave up on their last-minute, no-chance plan to fund a portion of a new Minnesota Vikings stadium and scheduled a vote on the existing stadium proposal in the Minnesota House on Monday.
But even more than the horribly flawed new GOP plan died today. The curtain was pulled back all the way — finally — on the failed leadership of House Speaker Kurt Zellers. Zellers revealed — finally — that he was opposed to the Vikings stadium and wouldn’t lift a finger to support the package. After months of bland platitudes and evasion, Zellers finally has revealed his true intentions. More than that, though, Zellers revealed his complete unwillingess to work within the parameters of his own job as the leader of the House majority.
“We have difference of opinions & priorities. Voters picked a DFL Governor and a GOP legislature. Voters got what they asked for.” – Speaker of the House Kurt Zellers
Minnesota has had divided government since 1990. No one party has controlled the governor’s mansion and both houses of the Legislature since Rudy Perpich was Governor. Never has the level of dysfunction in St. Paul been so high. Yes, both parties share blame for this situation, it is incumbent on the key leaders — Zellers, Republican Senate Majority Leader David Senjem, and Governor Mark Dayton to do what it takes to make the state government function on behalf of its citizens (and all of them at times have failed in that role). By obfuscating, playing political games, and then tossing in the towel when the situation got too hot to handle, Zellers has proven himself to be uniquely overmatched for his job as Speaker.
If the stadium vote fails Monday, Zellers will have rightfully earned his place as the primary goat in this fiasco. More than that, he will have provided Exhibit A in the DFL case to retake the Legislature.
[UPDATE]: Give Zellers credit for having the guts to go on KFAN with Dan Barreiro this afternoon. Don’t give him credit for what he’s saying, though. What a mess, including this gem: ”I want to see it pass. I won’t vote for it, but I want it to pass.” More to come later.
[UPDATE #2]: You can listen to the Barreiro-Zellers interview here.
The big takeaway, other than often frequent incoherence of what Zellers was saying as best demonstrated by the quote above, was the reality that the next phase of “kill the bill without looking like we’re killing it” strategy is to demand that Gov. Dayton sign the legislative tax bill in order garner the necessary Republican votes for the stadium. Zellers did his best to hide this element of the strategy, but the gig was up at the end of the interview when Barreiro finally got him to admit that the one thing Dayton could do to earn GOP votes would be to sign the tax bill. That’s why the vote on the stadium isn’t until Monday — to allow more time for negotiating and application of political pressure.
Legislative Republicans released the framework of their proposal to use general obligation bonds to fund the state’s share of a new Minnesota Vikings stadium.
What’s notable about the proposal is how much is still left to be worked out at this point. The full document released (sketchy as it is) is at the bottom of the post.
The proposal would cap the state’s contribution to the new stadium at $250 million. This is meant to represent various infrastructure costs related to construction of a “roof-ready” stadium. The city of Minneapolis would still kick in $150 million, using the same means as the previous stadium bill — utilizing existing city sales taxes that support the Convention Center. The team, meanwhile, has reiterated that its contribution is capped at $427 million, the amount in the previous stadium bill.
That leaves a $148 million hole in the financing for the stadium that has to be filled — the cost of the roof. That’s “has to be”, as in not optional, as the GOP was claiming yesterday. Legal consensus is that a stadium without a roof would not be eligible for general obligation bonds. Where’s the plan for that? Well, it’s “TBD” — a phrase that appears five times in the single-page proposal.
Is there a path forward here to fill that gap? Is the team going to kick in that much? Not likely. You may be able to squeeze a few more million out of the team and make them responsible for cost overruns, but they certainly aren’t going to be putting in the full amount. Given the struggle of getting $150 million past the Minneapolis City Council, doubling that amount is a non-starter. Bringing in Hennepin County as a second local partner isn’t likely, either. So the most likely and most reasonable option would be to bond the full $398 million state contribution from the previous bill.
But upping the stadium contribution likely means you’re looking at a total bonding bill in excess of $800 million. (Remember that bonding bills have to pass the legislature by a 60% supermajority.) DFL votes will be required and they’re not going to sign on to a package that scrimps on needed local projects. Is an $800 million-plus bonding bill more acceptable to Republican majorities than the previous stadium bill? Given that many Republicans were perfectly fine with having no bonding bill at all this year, I would say that’s a dubious proposition.
Some of the harsh rhetoric may have faded, but until there’s a real plan to fill that gap and get rid of those TBDs, my post from yesterday still stands: this proposal isn’t terribly serious and is doing more to kill chances of a stadium than advance it.