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From Campaign Rhetoric to Policy

November 19, 2013 By Tom Berg, Guest Commentary

Editor’s Note: During the 1970 campaign, Governor Wendell Anderson ran on a broad Citizen’s League policy paper to reform Minnesota’s tax collection and distribution formula, what we now know as LGA. Those general proposals faced three major obstacles: coming up with actual legislative language, crafting explanatory material for the general public to understand, and passing the conservative-controlled legislature.

That’s where we pick up the following excerpt from Tom Berg’s latest book Minnesota's Miracle: Learning from the Government That Worked. This material is being used with permission of the University of Minnesota Press, Copyright 2013 by Tom Berg.

[Turning a broad campaign plan into actual policy] involved developing detailed distribution formulas for the eighty-seven counties, 434 school districts, and eight hundred some municipalities. [Eileen] Baumgartner, with a degree in chemistry from the College of St. Catherine in St. Paul and a master’s degree in public policy from the University of Minnesota, was very comfortable with mathematics and developed an algebraic formula to determine the amount of money that would go to school districts and other local units of government. “I did them all on a hand calculator because we didn’t have PCs and spreadsheet technology in those days,” she said. The algebra was actually in the legislation…

The final plan developed by the drafting team and approved by Anderson called for an eye-popping $762,000,000 increase in state taxes, a 37 percent increase. Importantly, it also reduced the taxing and spending disparity between school districts and mandated the reduction of school property taxes by over 18 percent.19 The governor unveiled this “Fair School Finance Plan” in January.

The plan also put the clamps on school districts so they could not, as had happened after the 1967 legislation, get the new state money and then turn around and raise property taxes right back to previous levels. The mechanisms to control these local property taxes were called “levy limits.” These limits effectively limited the amount of real estate taxes school officials could raise from their district…

The legislators’ instincts told them something needed to be done during the legislative session. They could not agree, however, on just what that something was. At one point in the session, there were six separate bills dealing with school aids and related taxes, and all were active simultaneously. One of those bills in the house was authored by Harvey Sathre, a longtime member of the House Education Committee. He did not like the governor’s approach, and his bill had only modest alterations to the existing school funding program…

In the senate, one of the Republican Young Turks, Wayne Popham, agreed to carry a bill closely tracking the Citizens League proposal. The league had an active presence at the legislature during the session to support its proposal. The governor’s complicated proposal, which covered more than the Citizens League plan, was formally introduced in the senate by Senator Gene Mamenga, a professor at Bemidji State College. When it came time to present the controversial Fair School Financing Plan to the Senate Tax Committee in a jam-packed hearing room, Mamenga, to the surprise of [governor’s aide John] Haynes, simply turned to the young Haynes and said, “John, please explain the bill to the committee.” Forty years later Haynes said, “I can still remember how nervous I was as I walked to the podium. As I began to speak, I felt my knees shaking inside my trousers.”

Opposition to the governor’s proposed legislation was swift. It was led by the Conservative Caucus in the house and its majority leader, Ernie Lindstrom. As the governor traveled the state touting his proposal, Lindstrom followed as a one-man “truth squad” and called the governor’s proposed statewide tax increases “reckless.”

…The governor kept pounding away at the need to reduce local property taxes and to reduce the disparity in taxation and spending between school districts and municipalities that have a high property tax base because of such things as significant commercial property and valuable homes, and “poorer” districts or municipalities with primarily low-value residential property. He claimed that his proposal was a fair and fiscally sound mechanism to do this. Media coverage on these issues continued to be extensive, and editorialists from across the state weighed in on the discussion.

…Anderson and DFL proponents of the proposal such as Minority Leaders Sabo and Nick Coleman knew that Conservative Caucus votes were needed to pass the legislation. They tried hard to get at least some bipartisan support for the legislation. At the same time, they had their hands full trying to keep most of the Liberal Caucus members on board.

…Stanley Holmquist was the majority leader of the senate’s Conservative Caucus. Holmquist had a tough job as he had only a one-vote margin to work with on partisan issues. He was also a businessman, a former teacher, school principal, and school superintendent. He held a deep philosophical belief in the importance of education and knew that it takes money to run a good school district. Holmquist had served in the senate with Wendell Anderson for eight years, and they were friends. At the large and boisterous April hearing in the state armory, Holmquist made the argument to the protesters that the legislature does not set the local property taxes. He was booed and hissed. Sabo described the crowd’s reaction: “The folks were not going to be fooled. They knew that the legislature and the governor did have impact on property taxes.” Holmquist continued to think about the governor’s proposal.

...The photogenic and aggressive Anderson did all he could to take advantage of his position. He also had a more extensive staff than the house Conservatives, and in this case, the staff were very savvy. Tom Kelm, the governor’s executive secretary, and David Lebedoff, the governor’s campaign chair and then a speechwriter and advisor, were very good at plotting strategy and getting favorable media attention for the proposal.

A good example of these skills occurred when Anderson requested to speak to a joint session of the legislature to discuss his proposal. The governor asked for only fifteen minutes in late April. The controlling Conservatives, through Speaker Dirlam, refused his request. Anderson then called a press conference in the ornate and large reception room that is part of his office area to explain his position. He also invited all legislators to attend the May 4 press conference. The house Conservatives, led by Lindstrom, tried to upstage the governor by releasing their tax and revenue proposals on the morning of the same day. The result of all this posturing was significant help for the governor. First, his press conference got the headlines and more media coverage than Lindstrom’s did. Second, and more importantly, Senator Holmquist came to the governor’s press conference and sat in the front row. He became a public supporter and played a key role in rounding up Conservative votes in the senate.

Ultimately the house passed the Sathre bill, which reflected his unchanging philosophy. The senate passed the Popham bill, but no agreement was reached between the house and senate on the significant differences between the two bills. The normal appropriation bills were passed so that the government could keep on running, but the major proposed changes in taxes and school and municipal aids were still an open question. The legislature’s 120 days expired without any agreement on this controversy.

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