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Dayton and GOP-led Legislature should act on what works, not ideology and wishful thinking

Mark Dayton is governor-elect and DFLers are celebrating. While visions of political patronage and power dance in their heads, the reality of becoming governor and the problems Dayton faces is beginning to sink in.

David Schultz
Courtesy of Hamline University
David Schultz

There are the obvious challenges in addressing a $6.2 billion deficit with a Republican Legislature hostile to his pledge to raise taxes. The GOP Legislature has its goals, but it confronts a gubernatorial veto. It is too easy to predict gridlock and a special session in May or a potential government shutdown in July. More interesting is to describe the new reality Dayton, the DFL, and the GOP Legislature confront, divining options for each.

A dose of political reality
There is no majority party in Minnesota. Twenty years of gubernatorial races and two statewide recounts in a row show that. Dayton did not get a majority of the votes, and but for a few hundred votes in the Legislature, the DFL would still have majority control of the House. No one can claim a mandate.

Many think Dayton will have a difficult time as governor. He will not have an easy time working with a Legislature of the opposite party. Tell that to Pawlenty, who faced near veto-proof majorities yet managed to out-fox the DFL. Dayton too can do that, especially with new and inexperienced GOP majorities who need to learn how to govern.
Dayton has the advantage of a four-year term. Because of redistricting, the entire House and Senate are up for re-election in 2012 — a year certain to be more DFL-friendly than this year. If the GOP wants to hold its majority beyond 2012 it has every reason to compromise and not make politically unpopular cuts. Dayton can use his veto, line-item veto, and this fear of losing a majority to force the Legislature to compromise. The big issue for the GOP: Can they resist demands from their base to act? Can Dayton?
Short term, the need of Dayton and the GOP to reward their coalitions to hold them together may preclude compromise. Longer term, compromise may solidify the swing or moderate vote and perhaps guarantee a political future. Balancing the two will be difficult. If Minnesota’s political climate is dysfunctional, it’s gridlock. If political survival rules, compromise prevails.

The real budget and the economy
The first test is the budget. Everyone begins with assuming the deficit is $6.2 billion. It is actually worse, if federal matching money is considered.
With a biennial budget of approximately $30 billion, this is about a 20 percent shortfall. Of the budget, 37 percent is K-12, 30 percent health and human services, 9 percent higher education, 10 percent local government aid, and 6 percent public safety. Without tax increases, the biggest areas to cut are education and health. Few want to cut K-12, leaving health the juiciest target. Few realize that cuts here also mean losses in federal aid. For many programs, especially Medicaid, for every state dollar allocated there is a corresponding federal match, often in ratios of seven or more to one. Cutting a couple of billion state health dollars may mean an additional loss of several billion federal dollars.
State budget cuts have ripple effects. They represent a loss of jobs for state and other workers, but they also jeopardize other monies. The state budget of $31 billion only counts state money. If federal dollars are included, the real state budget is several billion more. Cutting state money potentially exacerbates the deficit and hurts the economy.
There is no good short-term easy fix to the budget. One cannot save $6.2 billion simply by privatizing functions or undertaking simple government reorganization. Genuine reorganization, as opposed to slash and burn, demands short-term budget increases — and the savings will not be recouped for years. Short term, the reality is the need for tax increases or simple lopping off of government functions — or a combination of both. But what do we not want government to do? Less education? Less money for health care? These are short-term fixes with long-term structural consequences.

Build for the future   
Whatever Dayton and the GOP do, they need to think about building long-term institutional structure and capacity for Minnesota. Significant cuts in state money or functions require corresponding capacity for the private or nonprofit sectors to respond. Do they exist? Shifting more responsibility to local government asks the same question.

Similarly, taking on more state functions, privatizing, or changing government requires building institutions and programs that make that possible. Within the budget one needs to keep this in mind.

Plan and act on good evidence
One of the most foolish moves by the Pawlenty administration was eliminating the Department of Planning. Without it there is limited capacity in Minnesota for the state and local governments to use to assist in longer-term planning. Planning is essential to capacity building. Something needs to replace it. Additionally, if more is going to be asked of local governments, greater coordination is required. Strengthening the Metropolitan Council’s capacity to plan and coordinate is essential. Creating other regional planning bodies is also needed.
Finally, both sides need to eschew pure ideology in lieu of what works. In 2003, when Pawlenty proposed JOBZ, I told a local reporter that the program would not work and that within five years or so studies would declare the program a failure. When asked how I knew, I told her I was a housing and economic planner for years (and a former city director of code enforcement and planning and someone who teaches planning, housing, and economic development) and the research was overwhelming: Enterprise zones do not work. Six years later the legislative auditor confirmed this and Dayton, Tom Emmer, and Tom Horner all agreed that JOBZ should go.
Rethinking government, innovation and economic development are good, but they should not be done blindly. There is significant research indicting what works — or at least what does not — when it comes to taxes, job growth and other similar matters. Public policy should be guided by it and not ideology and wishful thinking. Ultimately, this is the real challenge for the next four years — will reason or partisanship prevail?

David Schultz is a professor at Hamline University and editor of the Journal of Public Affairs Education (JPAE). He has taught state constitutional law for nearly 20 years.

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Comments (8)

  1. Submitted by Ron Gotzman on 12/10/2010 - 09:37 am.

    Mr. Schultz,

    I heard that Mr. Dayton wants Jobs, Jobs, Jobs. He also wants to Tax, Tax, Tax.

    Does this make sense to you?

    I also heard that if we freeze MN spending the deficit is solved? Is this correct?

  2. Submitted by dan buechler on 12/10/2010 - 10:52 am.

    Good to read something from one of my favorite panelsts on Almanac. One poly sci question I have for you is when there is a big sea change like this how do freshman legislators take and adapt to their new roles? It is interesting with the immediancy of Almanac that you can see in their faces or in their tone of voice how they are doing internally. Some of the freshman are not as polished or world weary as older more established guests. Thank you for your writing.

  3. Submitted by David Greene on 12/10/2010 - 01:33 pm.

    “Strengthening the Metropolitan Council’s capacity to plan and coordinate is essential.”

    Agree 100% but it’s going to take even more. The Council has to coordinate planning regionally. That means convening planning meetings across city and county boundaries. It means getting everyone at the table to plan the big picture. It means the Council has to be much more active at engaging community members at the grassroots level. And it has to be ready to exercise its authority when necessary.

  4. Submitted by David Schultz on 12/10/2010 - 02:04 pm.

    Thanks for the comments.

    First let me say that I am glad I am not in the legislature or the governor having to make the tough choices ahead. The reality is that there will be some losers no matter what happens. To me the issue then becomes who can best bear the losses and are there ways to distribute the benefits and burdens both to mitigate damages and to plan for the future.

    In general, I would rather favor people over companies and the least advantaged over the more affluent. Companies and the more affluent are in a better position to bear the losses than are the poor. In addition, taxes can hurt economies but taxes are also overrated in terms of their impact on investment and business relocation decisions. In most studies they come in behind workforce skills, access to markets or supplies, and transportation costs as factors affecting investment and relocation. Taxes need also to be examined in terms of what businesses receive from them in terms of infrastructure and other amenities. Thus, taxes pay for critical things and services necessary to individuals and businesses. The issue becomes then how to create and develop good taxes that will help as opposed to hurt the MN economy.

    In terms of a freshman effect, it does exist. Look at how Speaker Kelliher had to grow as Speaker and she had a few years in the legislature. Legislators need to learn how to work with one another, how to craft bills, and simply just learn about how government operates and what the current law and policies are I remember testifying at the legislature a few years ago before Representative Dempsey’s committee. One first-termer was concerned that once the committee had passed the bill he would not have a chance to vote on the bill again because it was going over to the senate. Dempsey reminded him that the bill had to be voted on by the entire House of Representatives!

    Of course, for some critics learning the secret handshake is being corrupted by the process and not learning roles.

  5. Submitted by Arvonne Fraser on 12/10/2010 - 04:28 pm.

    This caught my eye in the piece. “If federal dollars are included, the real state budget is several billion more.” Would it be possible to insist that the governor and legislature include these amounts whenever they are discussing budgets and appropriations? Is it possible that MinnPost journalists can make this important point. It’s rather like LGA for MN cities. We, the public, need to understand and appreciate the fact that state, federal and local taxes are shared between units of government.

    Again, thanks to MinnPost for excellent journalism.

    And, even though I’m a somewhat left liberal, I believe pragmatism and patience with the political process is essential. So I’m pleased that articles such as this make one stop and think, before criticizing public officials, including our president, too harshly.

  6. Submitted by Hiram Foster on 12/12/2010 - 07:41 am.

    “Finally, both sides need to eschew pure ideology in lieu of what works.”

    Let’s not make the mistake of thinking that what can get through the legislature is that which works. And I think it’s worth reminding ourselves sometimes that ideology is concerned with what works, not with what can get through the legislature, and on that basis at least, is entitled to a certain amount of respect.

    How much of the current situation we are in is the result of doing, not what’s right, but what is politically expedient?

  7. Submitted by Ray Lewis on 12/12/2010 - 11:55 am.

    Thank you Professor Schultz for taking the time to write an article like this. I believe at least some of the public appreciates a non-partisan discussion of the issues we face. You do very well describing how sometimes the political process gets in the way of rational policy development.

    “One of the most foolish moves by the Pawlenty administration was eliminating the Department of Planning.” I was part of the Office of Strategic and Long-Range Planning (MN Planning) during the Carlson and Ventura administrations. One of the key roles was trying to achieve policy consensus and to balance resources, responsibility and accountability across different state agencies and levels of local government for the benefit of citizens. It would be nice if someone had this wholistic and interdisciplinary frame of mind during upcoming debates on balancing the budgets and re-inventing government on a smaller scale.

    Perhaps you can expand on the role that citizens’, as opposed to parties, can play in shaping our shared future.

  8. Submitted by Beryl John-Knudson on 12/13/2010 - 08:27 am.

    As a curious commoner with eye pressed against the knot hole in the fence, I do wonder and certainly recognize the need to restore what was lost here and the suggested return to state planning.

    Do wonder also about the relationship to the present regional commission concept like ARDC, which has been successful in the Arrowhead; greater Minnesota… but probably since most cities are villages of equal size almost, on the range, and collaboration of services and economies even now could be viewed as a mere shadow force in those endeavors?

    Then too, when and if you have regional planning activating collaborative cooperation all over the state… how do you coordinate a balance of power between urban metropolis, the burbs, the rural and small villages without neglect of one over the other…bully choices such as rail connectors need balanced planning input all over the state and should to be recognized as one example not too carefully apportioned moneywise at this time?

    Imbalance of power creeps into all programs and how soon before a pack the Republican dogs will be barking “big government”,their constant mantra, and kill the opportunity or opportunities embedded in the return to state planning?

    You could say it evolves around the quality of planners and planning I suppose?

    Well I may be way off-track here but hope some of my questions have a bit of validity in the asking. Thanks for the article which deserves another thesis to embrace the finer points whatever they may be…

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