The first debate of the MN guv general election season aired on “Almanac” Friday night. Like many of the debates during the DFL primary season, it amounted to one candidate, Mark Dayton, who is willing to say how he proposes to deal with the $6 billion deficit and two candidates, Tom Emmer and Tom Horner, who are not.
Dayton’s plan, which relies very heavily on raising state income taxes on the wealthiest 10 percent or so or Minnesota taxpayers, is not everyone’s cup of tea. I assume the other candidates hope that voters will flinch from it (many surely will). And maybe vagueness can beat a specific proposal when the specific proposal is unpleasant. But, for me at least, you don’t get to complain about the other guy’s plan until you put your own on the table.
There is no pleasant way to address a $6 billion deficit. There are only three tools that will work. Immediate tax increases, concrete measureable spending cuts, and bookkeeping tricks, sometimes called “shifts” or “one-time measures” that get around the supposed prohibition on state government borrowing.
In the longer run, reinventing government, educating the next generation, stimulating the economy, even state-owned casinos, might help balance future budgets. But in 2011, the new governor needs things that produce immediate savings or revenue.
Tom Emmer, so far, says no new taxes, eventual tax cuts (it’s not clear whether he plans to propose tax cuts in his first year, but tax cuts are the goal), and huge spending cuts, billions and billions of dollars worth, that he has so far refused to specify. And he continued to refuse to specify them on Friday night, even while he claimed that he had begun to do so.
In the “taxes” statement of his campaign website, Emmer says: “The answer to deficits is not more taxes, but less.” This is part of the overall Repub wish/hope/belief that tax cuts pay for themselves through economic stimulation. But even if you believe that one, it takes time for the stimulus to work. The immediate effect of a tax cut is a decline in revenues. You can’t address the immediate deficit problem that will face the next governor with tax cuts. Only real tax increases that will raise immediate revenue, real spending cuts, or bookkeeping gimmicks. (I know, I already said that.)
On “Almanac” Emmer said Minnesota doesn’t need higher taxes. “We’re talking about new revenues from new jobs.”
The endpoint of the Emmer plan, by the way, is the elimination of the income tax entirely. Here’s the quote from “Almanac:” “Ultimately, you should not be taxing production and income.”
As for spending cuts, Emmer said he’s only talking about “getting the bloat out” of state spending. Emmer said he would not cut government services. Maybe he didn’t say that. Here’s the quote: “We’re not talking about cutting government services.” Maybe not talking about it and not planning to do it are two different things.
For now, Team Emmer is clearly counting on a rope-a-dope strategy — refusing to specify which of those three, and in what proportions and what specific taxing, spending and gimmickry categories will be in the Emmer plan — is politically better than the alternative. Maybe they are right, politically. But every time Emmer appears opposite Dayton, Dayton will ask him: Where is your plan.
Horner also disappointed on Almanac in the where’s-the-plan test. When asked whose taxes would go up under his plan, Horner replied “it’s not so much whose taxes will go up as how do we lower taxes.” Horner specified that he opposes any income tax increases because those “fall most heavily job creators.” He says he wants to both “broaden” the sales tax (which means extend it to clothing and “personal services,” (the example he gave of that category was haircuts), while reducing the overall rate of the sales tax.
Until you see the numbers on that tradeoff, this could result a net gain or loss of revenue. When I inquired of Horner spokester Matt Lewis, he emailed me: “There will be a net increase — both to pay for tax cuts in other areas and to offset some of the budget shortfall.”
Horner came into the debate apparently counting on Emmer and Dayton to engage in such unappealing bickering that he could turn to the audience and say, in various versions, “if you think four more years of left-right, Democratic-Republican bickering is what Minnesota needs, then go for it.”
He did several versions of this, until Dayton got slightly in his face, stating that he and Emmer were expressing their substantive differences, and fairly civilly, and then, sarcastically, that if this comment was all Horner had to offer, he should record it so it could be played whenever Emmer and Dayton disagree.
Horner’s overall message has to be that he is the man in the middle, free of the orthodoxy of both left and right, able to embrace common-sense solutions that will work. He tried to say that Friday night, but I can’t say that he had a magic moment where he mentioned one of his common-sense solutions and produced a reaction of “yes, that’s exactly the kind of common-sense solution that would work!” Maybe those are coming. Like Emmer, Horner is promising more details ahead.