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Minnesota 2020 Journal: New Leader, Same Failed Policy

December 23, 2011 By John R. Van Hecke, Executive Director & Fellow

The Minnesota State Senate majority caucus faces a leadership crisis. The conservatives' state party structure appears to be in organizational free-fall with sudden resignations, succession chaos, mounting debt and reporting and disclosure issues with state and federal campaign oversight agencies. However much cosmic justice some of us might find in this situation, don’t be distracted, Minnesota. Nothing has changed.

Minnesota conservative policymakers remain deeply committed to radically reinventing Minnesota. By cutting school funding, abandoning affordable healthcare reform, ignoring our state’s crumbling roads and bridges, and preserving a state policy that takes from the poor and gives to the rich, conservative policymakers seek to transform Minnesota into South Dakota or a cold Mississippi.

That vision hasn’t changed one iota.

Within the next week or so, a new State Senate Majority Leader will be elected. While I don’t know who’ll win the contest, I don't expect a change in public policy direction.

Following his or her election, the new leader will speak soberly about public integrity and leadership’s ethical responsibility. Without detail, they’ll acknowledge circumstances leading to Senator Koch’s resignation as Majority Leader. The new leader will note the swift, decisive action resulting in painful but necessary leadership change.

The new leader will affirm some sort of Senate ethics committee investigation, somberly embracing a public accountability process. However, you won’t hear the new leader announce a bold, bipartisan vision rooted in policy moderation.

Minnesota needs a balanced policy approach. As we continue slowly recovering from the economic recession, conservative policy has undercut a decades-long state revenue sharing practice, compelling communities to cut services and raise property taxes. Conservatives have cut school funding, slashed human services programs, and let Minnesota’s roads deteriorate. Conservatives haven’t raised taxes on Minnesota’s highest income earners.

Under the new leader, all of these policies will continue. The “no-new-taxes” approach, the one that’s failing Minnesota, will remain unchanged.

Minnesota can’t cut or tax its way out its financial problems. The recent State Economist’s financial forecast projected an $876 million surplus. That’s great. It gives Minnesota policymakers a tiny amount of breathing room but the forecast doesn’t anticipate a dramatic financial turnaround.

In fact, that surplus has already been “spent.” By law, the largest chunk will refund the state budget reserve, exhausted to balance the budget during the last legislative session. The remainder is assigned to Minnesota’s cash-flow account, also drawn down to balance the budget.

Balancing the state budget, policymakers spent every dime available and, rather than pass a small tax increase on Minnesota’s highest income earners, the folks paying a lower total taxation rate than poor and middle income Minnesotans, they shifted school payments into future fiscal periods and sold income-generating tobacco settlement bonds at a discount to raise extra cash.

Even if Minnesota’s economy continues recovering, Minnesota still faces another budget deficit. The schools must still be financed despite pushing payments into future fiscal periods. Minnesota booked the revenue for the tobacco bond sales, meaning that bond payments will go to the new owners and not to Minnesota’s bottom line. Policymakers traded on-going income for a discounted short-term gain.

This is what a cuts-only budget balancing strategy yields. Don’t expect the new Senate Majority Leader to do something different.

In times of organizational turmoil, change-oriented voices tend to be drowned by those insisting on even greater orthodoxy. We’ve lost our way, the true believers will insist. We must commit to the true path. Only that will save us.

It’s a downward spiral as moderates are sidelined.

We’ll know that things have changed when a State Senate majority caucus member announces a plan to raise additional state revenue by the tiniest of tax increases on Minnesota’s highest income earners. It won’t be a dramatic increase, just a nudge to create much-needed revenue while making the tax burden slightly fairer.

I’d love to see that happen but, under the circumstances, I don’t think this is a reasonable outcome. Extreme policy voices have a chokehold on Minnesota’s legislative process. A new Majority Leader isn’t going to change that. At exactly the moment that Minnesota needs a new public policy direction, Minnesota’s conservatives are doubling down on failed policy. Leadership chaos only distracts us from that truth.

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  • Mike C says:

    December 27, 2011 at 10:09 am

    The GOP is having some leadership changes but that does not change their conservative message.

    The GOP is run by men and women who are not perfect and you know what, the DFL is also run by men and women who are not perfect, the only difference is the message.

    The GOP believes in smaller government and the DFL believes that government is the answer to all our problems.

    The state party under Chairman Sutton spent a lot of money to win elections in 2010 and look what it got Minnesota.

    They took majorities in the House and Senate and it got Minnesota a 34 billion dollar budget instead of a 39 billion dollar budget.

    The DFL believes in much higher taxes and that is what you would have gotten. I know that some people had their property taxes go up, but to tell the truth a lot of you had your property taxes go down.

    They were able to replace our long term representative in the 8th with a Chip Cravaack.

    This is what the GOP party did and why they have debt but this is not uncommon.

    Don’t worry about the GOP - they will come out of this stronger and will keep their message of smaller government, lower taxes and responsible spending. It is going to hurt for a while but in the end Minnesota is going to be the better for it.

    I hope you all had a Merry Christmas and lets have a conservative new year.


  • Bernice Vetsch says:

    December 27, 2011 at 11:36 am

    What is utterly sad about our situation is that the Right controls the taxing and spending of many state legislatures (thanks, ALEC),

    pretty well controls most of the US Congress (thanks ALEC, Koch Bros., and the National Chamber of Commerce),

    and is even imposing its unworkable, destructive austerity plan (thanks Ayn Rand and Milton Friedman) upon poor country after poor country.

    The Occupy folks may be our best hope for a peaceful transition to a better future.