As you have no doubt heard by now, Gov. Mark Dayton dropped a medium-sized bombshell at the Humphrey School this a.m., offering a deal that could end the partial state government shutdown.
As Dayton presents it, he is accepting an offer that the top Republican leadership of the Legislature — Speaker Kurt Zellers and Majority Leader Amy Koch — made in writing to him at their last meeting before the shutdown. It involves no tax increase and would enable state spending to reach about $35.4 billion by borrowing about $1.4 billion in two forms — another school “shift” and borrowing against future state receipts from the big tobacco settlement.
He added three conditions to finalizing the deal:
- The removal of all non-money policy issues on which Republicans had at earlier stages insisted, including hot-button issues like a ban on stem cell research and additional restrictions on abortion.
- The Repubs drop their demand for a 15 percent across-the-board reduction in the state workforce.
- Inclusion in the deal of an agreement to pass a bonding bill worth at least $500 million for construction projects.
If the Repubs agree, Dayton said the Legislature should be able to hold a short special session to ratify the deal.
Basically Dayton still defends his strong belief that taxing the rich to avoid cutting too deeply into state spending is right, but he has given up hope of making any progress on convincing Republicans of that or of getting to them agree to split their differences in order to get a budget deal.
After the Humphrey event, I asked Dayton whether his offer was on a “take-it-or-leave-it” basis. He shrugged but didn’t answer directly, relying on his belief that since he is accepting Koch and Zeller’s former offer, they should take it, although technically the deal was not left on the negotiating table and some Repubs may cavil over details and Dayton’s three conditions. Dayton said he would be “astonished” if the Repubs argue that their former offer is no longer available for him to accept.
His second condition (the 15 percent workforce reduction) is really a restatement of the first condition (remove all policy issues) since the reduction of the workforce is a policy issue not directly tied to the taxing and spending budget. And for both of those conditions, he is relying on public statements that Koch and Zellers made that they had removed all policy issues from their final offer. We’ll see if they feel that way.
Dayton said he expected to meet with Koch and Zellers later today and would soon learn whether the deal could be sealed.
Dayton says the deal is a bad one for Minnesota, but better than accepting an indefinite government shutdown. He seemed relatively satisfied with the total amount of state spending the deal would allow, but objects to borrowing $1.4 billion instead of finding new revenue. He said is more troubled by the “tobacco bonds” idea than by extending and increasing the school shift.
But as his letter to the leaders (which he read aloud at the Humphrey event) states:
“You have emphatically rejected all of my proposals [to raise revenue]. You have repeated that your caucuses will oppose any additional tax revenue from any source, even my proposals which limit the income tax increase to only the richest 2%, or even the richest 0.3% of all Minnesota taxpayers.”
He has heard privately from many Republicans who have ideas for raising revenue, but said they have been unwilling to do so publicly. Now he hopes that over the next few days, some new revenue ideas will be floated to avoid some of the borrowing. He wasn’t specific about what those ideas might be and I doubt he really expects any movement by the Repubs to substitute new revenue for the borrowing.
Dayton gave every appearance of being serene and confident that he was doing the right thing, even though he hates the deal, knows he will be accused of caving in and of rewarding Republican intransigence with concessions, and possibly inviting more intransigence in the future by anti-tax conservatives here or in other states and in Washington.
During a question-and-answer session with the Humphrey’s Larry Jacobs, Jacobs asked Dayton directly whether his offer amounted “capitulation.” He said no, given the level of intransigence on the other side of the table and the damage that the continuation of the shutdown would cause he was accepting “the only viable option that’s available.”
He made several vague appeals to the electorate to send more progressives to the Legislature ahead of the next biennium. Dayton’s term lasts until 2014 while all members of both houses will face reelection in 2012. But for now, he said, “those are the people that the people of Minnesota sent to the Legislature.”
He implied that Repubs are unconcerned about the human impact that their policies cause. He described them as people for whom “unfortunately it all comes down to a number,” referring to the size of the budget, and too many “people in the Legislature think that the lower the number the better.” Later, he described them as people who believe that “everything government does is bad,” so the less it does, the better.
He said he had never had to deal with people for whom “intransigence is strength and compromise is weakness.”
“Ignorance and arrogance is a very dangerous combination,” Dayton said, comparing the current Republican legislators to the Bush administration during the run-up to the Iraq war. (Dayton was in the U.S. Senate at the time and voted against the Iraq War resolution.)
Jacobs asked Dayton about the Republican view that someone has to draw a line in the sand to force government to live within its means in order to avoid ruining the economy. He replied:
“If everybody were paying their fair share of taxes in Minnesota, and that was the amount of money they generated, I’d be the first to say: ‘That’s our means, and we have to operate within our means during good times and bad.’
“But not everybody is paying their fair share of taxes, as the facts show. And ironically those who are most capable of paying their fair share are not doing so. For Repubs to posit that the price we have to pay to keep businesses in Minnesota is an unfair tax system, and allowing the very wealthiest people in the state — people who are making a million dollars a year, to pay a smaller percentage of their income in taxes than middle income people. I don’t think it’s right.”
A question from the audience: “When will Minnesota leaders learn how to compromise?”
Dayton: “Not yet, but hopefully this lesson will be instructive for all of us.”