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GOP’s phony baloney budget math

April 5, 2013 by seanolsen 3 Comments

Two weeks ago, DFL leaders in the House and Senate released their budget targets, and we should be seeing the specific budget bills in each area shortly (in fact, they are overdue at this point).  Like Governor Mark Dayton’s budget proposal, the legislative budgets each total around $38 billion.

The House budget prioritizes paying back the school shift (accomplished with a blink-on income tax surcharge on top of the new fourth bracket for high-income earners) and property tax relief (an additional $250 million in local government aid).

The Senate budget, like the Governor’s, leaves the school shift untouched — which would keep the current law of any surpluses going to pay down the shift — and prioritizes property tax relief and economic development.

Both legislative budgets contained a surprise, though, as they each sliced $150 million from the forecast spending in health and human services.  Coming after a $1.2 billion cut in the last budget cycle and Dayton’s proposal to raise HHS spending by $128 million, it was a shock to many — including Republicans who have criticized those cuts.

There’s only one part of government where people could die and that’s in our area where the people with disabilities and health care and rural hospitals. I was just really surprised. Nobody saw that coming. — Rep. Jim Abeler (R-Anoka)

While politically convenient to attack DFL cuts to HHS, it makes the budget math for Republicans that much harder.  Republicans have rhetorically committed themselves towards paying back the school shift this session.

We should pay the entire shift back right now. – Rep. Kelby Woodard (R-Belle Plaine)

Before any changes to current law, the state finds itself with a $627 million deficit.  The remaining school shift is $850 million.  That’s a total of $1.477 billion that has to be found — without raising taxes.  Yet, Republicans have boxed themselves in by essentially taking K-12 and HHS off the table.  Those two areas of the budget represent $26.5 billion of the $36.7 billion in forecast spending for the next biennium.

Which means that those remaining areas of the budget would face the equivalent of a 12.5% across the board cut in order to balance the budget.  That includes higher education, public safety, transportation, economic development, and veterans programs.  Some of these programs have already taken severe cuts in previous budget cycles.

Does that sound sustainable or realistic?  Of course not.

But since Republicans are refusing to put forward their own budget proposal, they are attempting to fly free on their phony baloney budget assertions that we can hold taxes steady and cut our way to prosperity.  And they’re trying to avoid having to answer for the cuts that would be required to make their budget math add up.

So the next time your local Republican legislator tries to pass off that spin, ask them for the details of how they make the math work.  Just don’t hold your breath waiting for an answer.

[Picture is of Rep. Kelby Woodard]

Economy, Legislative Watch, Schools, State, State Legislature, Taxes
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Sen. Julianne Ortman

Looking for a Republican suburban woman and other thoughts

April 2, 2013 by seanolsen 5 Comments

MinnPost ran a story last week on prospective GOP candidates for Governor.  Of note in that story was a quote from prominent Republican operative Ben Golnik lamenting the fact that “the ideal candidate — a female from the suburbs” wasn’t out there.  As such, I found it interesting that the name of State Senator Julianne Ortman didn’t come up.  Ortman’s resume — in the Senate over a decade, former Deputy Majority Leader, a caucus leader on tax and legal issues — stacks up comparably against many of the other named contenders.  And she’s one of the Senate GOP’s better communicators, as evidenced by her continuing high profile despite not holding a formal leadership position anymore.

I have no idea if Ortman is interested in higher office — perhaps she’s signaled she’s not, which is why she didn’t make this piece.  But it seems that for many, the list of women available for statewide runs in the Minnesota Republican Party ends with Laura Brod now that Amy Koch is out of the Senate.

Given that the current list of prospective candidates all have significant question marks as it relates to their ability to either earn the Republican endorsement or win a general election — Sen. Dave Thompson might be too conservative for a statewide election, Rep. Kurt Zellers was widely criticized for his leadership (or lack thereof) last session as Speaker of the House, Sen. David Hann was an also-ran in the 2010 race for Governor, Hennepin County Sheriff Rich Stanek has perhaps spent too much time on gun issues for the base’s liking, and Hennepin County Commissioner Jeff Johnson has already lost one statewide race (Attorney General in 2006) — it seems maybe the list of usual suspects should be expanded.  But, of course, I doubt the Republicans are looking to me for advice.

Here are some other things happening in the community:

  • In case you haven’t already heard, two new restaurants opened in Chaska in the last week or so:  BullChicks in Chaska Commons, and Egg & Pie Diner in downtown.  I’m hearing positive word-of-mouth on both.
  • The two facility taskforces convened by the Eastern Carver County School District continue to make progress.  The High School taskforce is wrestling with the question of balancing programming and demographics between Chaska and Chanhassen High Schools.  Meanwhile, the Early Childhood through Middle School task force is working on finding the best way to deal with overcrowded schools on the west side of the District as well as finding a permanent home for the La Academia Spanish immersion program.  I am a member of the Early Childhood through Middle School task force  and I can attest to the difficult challenges that lie ahead here.  Over the next few months, there will be opportunities for public input on potential changes — I encourage you to keep your eyes open and attend those sessions when they occur.
Chaska, Downtown Issues, Legislative Watch, Restaurants, Schools, State, State Legislature
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official_dayton

Dayton rolls out revised budget plan

March 14, 2013 by seanolsen 6 Comments

Governor Mark Dayton rolled out his revised budget plan today, reflecting adjustments required after the February forecast trimmed the projected 2014-2015 budget deficit from $1.1 billion to $627 million.

Here are the key changes in the proposal compared to Dayton’s original budget:

  • All sales tax reform is removed from the budget:  no business sales tax expansion, no expansion of consumer sales taxes to services, and no reduction in the sales tax rate.
  • The $500 property tax refund has been removed, although Dayton does invest an additional $18 million in increasing the pool for the renter’s property tax refund.
  • The cut in the corporate income tax rate has been removed, but changes to eliminate tax breaks for foreign operating companies and foreign royalty payments remain in the budget, raising about $370 million.
  • The proposed school shift payback in 2016-2017 has been removed from the budget.  Dayton would continue with current law, paying back the remaining shift as surpluses come in.

Dayton’s spending plan remains essentially unchanged from his original proposal.

Legislative reaction fell as expected along party lines.  Democrats, many of whom were wary of Dayton’s business sales tax proposals, were more positive about this budget.

“For too long we have seen our budget deficits resolved by deep cuts to the middle class and one-time fixes,” said House Speaker Paul Thissen. “That approach has only given us more deficits, higher property taxes, and larger classroom sizes. It is high time we reject the status quo and build a budget that positions our state to thrive in the future.” (via kare11.com)

One point of contention among DFLers is likely to be Dayton’s failure to address the school shift.  Expect a DFL legislative budget that includes a partial shift payback.

Republicans, meanwhile, continue to call for the budget deficit to be closed by reducing spending.

“I think it’s time for the people of Minnesota to weigh in on all of the taxes and just ask the question, do you need high taxes to grow the economy? We don’t believe so,” said Senate Minority Leader David Hann, R- Eden Prairie. (via MPR)

GOP legislators have yet to introduce a budget proposal of their own, continuing a regrettable trend of legislative minorities choosing to complain from the sidelines instead of producing something that can be matched up side-by-side.

Economy, Legislative Watch, Schools, State, State Legislature, Taxes
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Sen. Julianne Ortman

Ortman introduces Senate version of compromise gun bill

March 13, 2013 by seanolsen 0 Comments

State Senator Julianne Ortman introduced the Senate version of the compromise gun control bill today.  The bill has been referred to the Senate Judiciary Committee.

Ortman is one of 17 Republicans who have indicated support for the bill, while five DFL legislators have signed on as co-authors of the measure.

Provisions in the bill include:

  • requirements to more quickly send state data to the national background check database
  • expand the parameters which disqualify people convicted of violent crimes from owning a gun
  • increased penalties for illegal gun possession and “straw purchases” (where someone buys a gun on behalf of someone who is prohibited from owning a weapon)
  • making it a crime to falsely report a gun as stolen

Supporters of the bill include the National Rifle Association, the Gun Owners Civil Rights Alliance, and the Minnesota Sheriffs Association.  Carver County Reps. Joe Hoppe and Ernie Leidiger are co-authors on the House version of the bill.

Read the full press release from Sen. Ortman’s office below:

 

 

 

Legislative Watch, State, State Legislature
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Rep. Ernie Leidiger

Leidiger, Hoppe back compromise gun control bill

March 7, 2013 by seanolsen 2 Comments

Carver County State Representatives Joe Hoppe (R-Chaska) and Ernie Leidiger (R-Mayer) have signed on as co-authors of a compromise gun control bill, H.F. 1323, which contains only measures that have significant bipartisan support.  More controversial measures, such as universal background checks and bans on assault weapons or high-capacity magazines, are not included in the bill.

Provisions in the bill, chief authored by Debra Hilstrom (D-Brooklyn Center) include:

  • requirements to more quickly send state data to the national background check database
  • expand the parameters which disqualify people convicted of violent crimes from owning a gun
  • increased penalties for illegal gun possession and “straw purchases” (where someone buys a gun on behalf of someone who is prohibited from owning a weapon)
  • making it a crime to falsely report a gun as stolen

73 House members (17 DFL, and 56 GOP) are sponsoring the bill, which also has the support of the Minnesota Sheriff’s Association and the National Rifle Association.  That’s a majority of the House’s 134 members.

Despite the broad support, however, the bill is not without its critics.  House Public Safety Committee Chair Michael Paymar (D-St. Paul), who earlier introduced a bill that included universal background checks, has indicated he won’t give the new bill a committee hearing.  In the State Senate, meanwhile, the Judiciary Committee is poised to also move forward a bill containing universal background checks.  No Senate version of the Hilstrom bill has been introduced yet, although this bill would seem to fit the parameters of what Sen. Julianne Ortman was talking about when she discussed alternative legislation to the Senate bill (S.F. 235).

Resistance from the critical committee chairs in both houses may mean that supporters will be forced to engage in some parliamentary maneuvering to get this bill to the floor for a vote.  This bill clearly opens the fissures in the DFL party on this issue, as well as revealing a gap in the law enforcement community, as the police chiefs and officers have lined up behind bills with universal background checks. It should make for some interesting times at the Capitol over the next two months.

Carver County, State, State Legislature
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hoppe

Hoppe backs judicial retention election constitutional amendment

March 4, 2013 by seanolsen 10 Comments

State Representative Joe Hoppe (R-Chaska) has signed on as a co-author on H.F. 1083 that would fundamentally change the way judges are selected and elected in this state.  The bill would place a constitutional amendment before voters asking them to replace traditional judicial elections, where candidates can challenge incumbent judges, with judicial retention elections.  How would a judicial retention election work?

  • Incumbent judges would be subject to a yes-or-no retention vote at the end of their six-year term on the bench.  
  • Winners of the retention vote would get another six-year term; losers of the retention vote would lose their spot on the bench at the end of their term.
  • The governor, selecting from a pool of candidates vetted by a bipartisan merit selection commission, would appoint a replacement.  The replacement would face a retention vote in the first election occurring more than one year after they were appointed.  (For instance, if a judge were appointed in 2015, they would face a retention vote in 2016.  A judge appointed in 2016 would face a retention vote in 2018.)
  • A Judicial Performance Evaluation Commission would be established with the purpose of providing feedback to voters on the judge’s performance — assigning them to one of three categories (“Well-qualified”, “qualified”, or “not qualified”).  Evaluations would be completed and published at the midway point of the judge’s six-year term as well as in the year of their retention election.

Supporters of the bill point to the fact that about 90% of judicial elections are unopposed today, meaning that even “unqualified” judges may be getting a free pass to another term on the bench.  They also suggest that retention election will work to get money out of judicial elections, lessening the possibility of moneyed interests essentially buying a judgeship.

Opponents of the bill point out that in some ways, judicial elections lessen accountability by putting selection of judges solely in the hands of the governor.  Additionally, there are concerns about the standards to be used by the Judicial Performance Evaluation Commission.  The bill specifies the following as criteria to be used:  ”knowledge of the law, procedure, integrity, impartiality, temperament, respect for litigants, respect for the rule of law, administrative skill, punctuality, and communication skills.”

What is excluded from these criteria include measures of a judge’s quality of work.  The language of the bill specifically excludes looking at measures like how often their opinions are overturned by higher courts or statistical studies of how their sentences compare with sentencing guidelines.  Such data is readily available and should be included in any comprehensive evaluation of judicial performance.

Local judicial activists have indicated preferences for candidates (legislative and judicial) who are opposed to retention elections.

I’m inclined to agree with the opponents of judicial retention elections.  Retention elections do not create accountability and transparency to the extent supporters claim they do — in fact, on net, they tend to limit public input on judges.  Being able to directly challenge an incumbent judge — even if rare and even if rarely successful — is important and shouldn’t have additional layers of bureaucracy placed in between the people and their preferences.  Minnesota has campaign finance law that has been reasonably effective in limiting the influence of moneyed interests from influencing judicial election results and the political parties themselves have exercised restraint in turning these elections into partisan sideshows.

(Additionally, it should be pointed out that this yet another example of Rep. Hoppe backing yet another constitutional amendment while claiming not to like legislating that way.)

Chaska, Legislative Watch, State, State Legislature
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Rep. Ernie Leidiger

Highway 212 expansion bill introduced and other happenings

March 4, 2013 by seanolsen 1 Comment

Here’s a roundup of some of the happenings around the area:

  • A bill has been introduced in the State Legislature (chief authored in the House by Rep. Ernie Leidiger and in the Senate by Sen. Julianne Ortman) to expand U.S. Highway 212 to four lanes from Jonathan Carver Parkway to County Road 43 in Dahlgren Township.  Also included in the bill is $8 million for construction of an interchange at US-212 and County Road 140 in Southwest Chaska.  This bill would be a critical next step in making sure that US-212 is built out to four lanes to Norwood-Young America.  Additionally, the CR-140 interchange is critical to the success of the Southwest Chaska Master Plan recently ratified by the City Council.  This is a good bill and I hope it will be included in the omnibus transportation package this year.
  • State Representative Joe Hoppe submitted his year-end campaign finance report on February 25, some three-and-one-half weeks late.  Of note in Hoppe’s report is that he collected over $1,700 in “special source” funding in 2012 that he was forced to return.  ”Special sources” include lobbyists, political party units, and political action committees.  Additionally, Hoppe’s penchant for filing late in 2012 cost him over $2,600 in late fees with the Campaign Finance and Public Disclosure Board.  Some fiscal responsibility…
  • The City of Chaska City Council meeting tonight has been cancelled.
  • The Chaska Hawks girls basketball team (ranked #7 in Class AAA) will play Richfield (ranked #2 in Class AAA) on Thursday night with a berth in the State Tournament on the line.  The Hawks romped past Benilde-St. Margaret 69-41 on Saturday to reach the section final.  The game will be at 7 p.m. at Minnetonka High School.
  • On the Chaska restaurant front, Dickey’s Barbecue Pit is open in Chaska Commons, while downtown’s Egg & Pie Diner is headed for a mid-March opening.  Construction is also underway at the future location of BullChicks in Chaska Commons.
Carver County, Chaska, City Council, Downtown Issues, Economy, Legislative Watch, State, State Legislature, Transportation
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dollar

After the Forecast: Adjusting the Brick City Budget

February 28, 2013 by seanolsen 10 Comments

Yesterday’s release of the state’s February Economic Forecast provided a dose of good news regarding our budget scenario, trimming $463 million off of the projected deficit for 2014-15.  While Governor Mark Dayton has indicated he will release his updated budget proposal the week of March 11, I’ve made changes to my original “Plan C“, and I’ve detailed them below.

Recall that what I was trying to accomplish with my proposal were the following things:

  • Minimize middle-class impacts as it relates to sales tax changes
  • Make a meaningful payment towards the remaining K-12 school funding shifts
  • Minimize negative impacts that come with expansion of sales taxes to B2B services

Having a $627 budget deficit instead of $1.1 billion makes it significantly easier to close the budget gap while accomplishing the three goals from above.

Let’s talk about the adjustments I make on the revenue side first.  My total revenue increase has been cut by over 40%, made up of the following components that have changed:

  • Business sales taxes are eliminated in this proposal
  • The new fourth bracket for high income individual income taxpayers is pared back by 25%
  • Sales tax rates are lowered to 6.25%, and consumer services are added to the sales tax base.
  • Income tax cuts for the lowest two brackets are implemented, meaning all married couples filing jointly will get a tax cut on their first $135,000 of income.

Combined, the last two bullet points are revenue-neutral and designed to minimize impact of the sales tax base expansion on lower and middle-income taxpayers.

Similarly, I pare back spending increases by a similar percentage.  While I tend to agree with politicians who point out the need for investment in critical areas of our budget like education, transportation, and health care, it’s not politically or financially prudent to propose tax and spending increases of the scope found in Governor Dayton’s budget given the smaller deficit we now face.  There needs to be balance, and a recognition that moving too fast to increase taxes and spending in a still-fragile recovery may not produce the anticipated results.

  • K-12 education sees an increase in spending of $380 million over the current forecast, made up of a $200 million partial repayment of the remaining funding shift, $50 million to fund optional all-day kindergarten, $44 million to expand early childhood programs, and $84 million in increased special education.
  • $80 million in increased higher education funding directed towards expanding grant programs to make college tuition more affordable
  • Dayton’s metro area transit sales tax plan is kept in place, which shifts some transportation funding out of the general fund budget

Here’s how it all breaks down:

brickcitybudgetfebupdate

What are your thoughts?  Let me know in the comments.

Economy, Legislative Watch, State, State Legislature, Taxes
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official_dayton

Budget picture brightens; projected deficit down to $627 million

February 28, 2013 by seanolsen 4 Comments

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).

Economy, Legislative Watch, State, State Legislature, Taxes
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BeerOnSunday_V2colorsquare-150x150

Sunday liquor sales torpedoed again

February 26, 2013 by seanolsen 5 Comments

In what is now seemingly a yearly tradition at the State Capitol, the effort to end Minnesota’s prohibition on Sunday liquor sales was torpedoed again by a combination of labor and liquor industry interests.  Last year’s effort failed on an overwhelming vote in the Minnesota House of Representatives.

Once again, the State Legislature — by kowtowing to special interest pressure — worked against clear majorities of Minnesota citizens.  Polling has consistently shown public support for Sunday liquor sales runs over 60%.

What are some of the arguments against Sunday liquor sales?  Let’s look at them:

“If you don’t open on seventh day and your competitors do, there goes your customer base,” said Edward Reynoso, political director for Teamsters 32 Joint Council.

Well, there’s certainly something to be said for competitive pressures.  But, let’s face it, there’s more to business success than just being open seven days a week (or as long as your competitors).  If that were the case, would it be possible to have a thriving fast food restaurant chain that’s closed on Sundays?  Or would it be possible to be a successful general retailer that closed at 10 p.m. every night instead of staying open 24 hours like its main competitor?

Maryann Campo, who opened South Lyndale Liquors in Minneapolis in 1975, said the bill would raise her store’s labor costs without boosting profits.

“We don’t see any economic advantage,” Campo said.

There’s nothing in the bill that would require liquor stores to be open seven days a week.  In fact, it might make more economic sense for a liquor store to close on Mondays (as some restaurants do) to maximize profits.

But even more to the point — let’s say Campo is right.  Why, then, should liquor stores (and auto dealerships) get the benefit of these blue laws?  It would be cheaper for every business open seven days a week to only be open six days a week.  Target and Best Buy and any number of other retailers would benefit in the same way that liquor stores do.  Why not ban all commerce on Sunday, then?

And certainly, employees of other businesses could equally benefit from this line of argument:

The Minnesota Licensed Beverage Association has lobbied effectively against the change every year with the same argument: Its member stores want one day off a week

The train has already left the station on that one, I’m afraid.  It would be nice if everyone could convince the Legislature to dictate a work-free Sunday, but it’s just not practical — nor is it good economics.

[Rep. Pat] Garofalo opposes broader Sunday sales, which he said would increase stores’ labor costs, only to be passed on to consumers.

“It means higher liquor prices. The public doesn’t understand that,” he said.

See the above answer for a response to the raising prices question.  But here’s where things really get interesting.  Garofalo has spent significant time this session braying about how Governor Mark Dayton’s budget will drive business over Minnesota borders.  Perhaps Garofalo should be equally worried about Minnesota businesses already losing revenue to Wisconsin as he is about whether or not Moorhead gets an Applebee’s.

Even more telling here is how many Republicans (Carver County’s own Joe Hoppe and Ernie Leidiger included) forget about their free market principles on this issue.  There’s precisely no free market rationale here to defend this prohibition.  And there’s precious little to stand on when it comes to social concern, either.  If we’re going to sell liquor in bars and restaurants on Sunday, why not allow people to buy a 12-pack and take it home with them?  Isn’t that better than letting them get their buzz on and then drive home?

Jason Alvey, the owner of Four Firkins in St. Louis Park, puts it best:

“It is the year 2013, yet I pay rent 52 days a year that I’m not allowed to open my business, and I think that’s very frustrating. Let’s gain the extra tax revenue. Let’s give the people what they want. Let’s give progressive retailers like myself the ability to run our businesses how we see fit.”

It’s time to put pressure on the Legislature to get out of the way and to do the right thing.  If you’re interested in changing this law, I encourage you to contact your legislator as well as supporting organizations like Minnesota Beer Activists that are working to make sure the Legislature listens to the will of the people.

Economy, Legislative Watch, State, State Legislature
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