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

If Minnesota’s political climate is dysfunctional, it’s gridlock. If political survival rules, compromise prevails.

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.