Bankers look at $100 million in state money and say, ‘Eh’

MORNING EDITION

State bankers are lukewarm about Gov. Dayton’s plan to pump $100 million in state money into their systems … in hopes they’ll lend it out. Tim Nelson and Annie Baxter at MPR say: “The governor was joined by Howard Bicker, head of the state board of investment, who said the board is shifting some of its money out of low-return treasury bills to certificates of deposit in Minnesota banks. Bicker said state officials hope the money will get loaned out to small businesses and employers. … The Minnesota Bankers Association welcomed the plan, but Gerriann Brower, a spokeswoman for the group, said in a statement that ‘the program does not address low loan demand; liquidity is not the issue.’ While businesses complain they can’t get loans, banks continue to assert that there isn’t enough loan demand from credit-worthy borrowers.” Well … then we’ll just have to talk to whoever defines “credit worthy.”

Good piece by MPR’s Jennifer Vogel on the “fraying” of Minnesota cities: “All over the state, projects like Owatonna’s [Manthey Park] playground — important to some residents if not mission critical — have taken a backseat during years of budget slicing in cities and counties. Making ends meet while keeping taxes down in the face of reductions to state aid, a lagging economy and degraded property values has led mayors and city planners to look hard at their budgets and make choices. They’re doing that again now, as they hash out final budgets by the end of the year. Many have eliminated staff positions, trimmed park and recreation programs, reduced library hours and cut back on maintenance. They mow public grass less often, delay building repairs and put off road and sidewalk improvements. In winter, some spread sand and salt only at street intersections and in spring they no longer plant flowers. Nearly half the cities who responded to a 2010 survey by the Coalition of Greater Minnesota Cities, reported cutting back on parks and recreation. Forty percent of cities that budget for police and fire reduced spending on these services. About a third said they performed less snow removal and 27 percent of respondents with libraries said they had cut hours.” There’s only one solution to this … and yes, that’s right, tax cuts for business.

 While indisputably important, my guess is the public’s patience for the arguments and counter-arguments in the redistricting squabble is very limited. The AP reports: “Minnesota’s major political parties took their struggle over redistricting before a special court panel Wednesday, each arguing for a method of redrawing political maps that could help them in future elections. Arguments included whether the five-judge panel should give more weight to city, county and town boundaries or to so-called ‘communities of interest’ — pockets of ethnic, industrial or demographic overlap, such as largely minority areas. … Asked Wednesday about the prospect for a negotiated agreement on new maps, Gov. Mark Dayton threw out long odds. ‘Somewhere between the Vikings winning the division and the Vikings winning the Super Bowl,’ he said, aware of the team’s 1-6 start in a division that includes the undefeated Green Bay Packers. ‘But there’s always hope.’ “

Computerized, more expensive and longer enforcement. That’s the low-down on St. Paul parking meters. Frederick Melo at the PiPress writes: “St. Paul Public Works on Wednesday unveiled a 27-page proposal to replace nearly 1,200 meters with a meter-less kiosk system. Drivers on each block will pay at a central computer kiosk for their marked space and then walk away. No dashboard receipts necessary. The city of Minneapolis recently unveiled similar technology in its downtown. The catch? To fund their $1.5 million installation, the new St. Paul meters will cost drivers at least 25 cents more per hour, and run for half an hour longer into the afternoon. In other words, the cost of parking at highly-trafficked spots downtown will go from the current rate of $1.75 per hour to $2 per hour, with enforcement running from 8 a.m. until 5 p.m, instead of 4:30 p.m.”

The stadium funding scheme du jour is … electronic pulltabs? Doug Belden of the PiPress writes: “State revenue estimates show authorizing an electronic version of the game now played on paper in thousands of bars and restaurants around Minnesota could generate an additional $40 million per year for the state. That would be more than enough to fund the $20-some million required annually to service the debt on the $300 million state portion of the Vikings project, said Senate Minority Leader Tom Bakk, DFL-Cook. ‘It’s a potential win-win,’ said Bakk. ‘I think we could find bipartisan support for it.’ Politically, the pulltab proposal would allow lawmakers to claim new gambling revenue without running afoul of American Indian tribes, which oppose other stadium-related gambling plans like a downtown Minneapolis casino or the ‘racino’ proposal to allow slot machines at horse tracks.”

“Improper” is the key word in the ruling on that funky $80,000 donation the city of Stillwater made to the pro-St. Croix bridge group. Mary Divine of the PiPress says: “The state auditor’s office says the city of Stillwater made an improper $80,000 donation of tax-increment-financing funds and is not in compliance because it did not turn the money over to Washington County. The matter, the auditor said, has been forwarded to the Washington County attorney’s office for review. The auditor’s office issued an opinion Aug. 30 that the city’s donation to the Coalition for the St. Croix River Crossing was illegal because it was made without a contract that would keep the public informed about how the money would be spent. In a notice issued Friday, the auditor’s office additionally said that TIF funds cannot be donated to a nonprofit organization and can’t be given to lobby for construction of a bridge outside of the TIF district. After the earlier ruling, the coalition returned the money to the city, but the city has not turned the money over to Washington County for redistribution.”

Blogger Karl Bremer has been so all over this story … well, heck, he actually co-filed the complaint that got the ball rolling. At Ripple in Stillwater, he now writes: “In an October 21 letter, Assistant State Auditor Arlin Waelti informed  Mayor Ken Harycki and the City Council that the matter is being forwarded to the Washington County Attorney for enforcement. The matter came before the State Auditor as a result of complaints filed by myself and Stillwater historian Don Empson. Harycki, who has been the driving force behind the $80,000 donation to the Coalition that he co-chairs, last month vowed to take the money from other city funds if they failed to convince the State Auditor of the propriety of using [Tax Increment Financing] monies. … In its response to the OSA … the city argued that the $80,000 was not a donation after all, but rather, a ‘pass-through to lobbyists under an implied contract with the nonprofit.’ The OSA strongly disagreed. ‘The City is wrong on the facts … During the OSA’s review of this matter, the City and the Coalition repeatedly and consistently described the City’s payment to the Coalition as a ‘donation.’ The Coalition’s Executive Director, the City Administrator, and the City Attorney each described the payment as a ‘donation.’ In addition, the City Administrator and the City Attorney each specifically denied that the City had a contract with the Coalition.” Other than that, the city seems to have a great case.

Today in Bachmannia: Still need a Halloween costume? $75 will get you one of Our Gal’s snuggly fleeces. Molly Ball at The Atlantic writes: “In an email to supporters Wednesday — subject line: ‘Can I send you a fleece?’ — the Minnesota congresswoman combines her pitch for ‘constitutional conservatism’ with a paean to the crisp fall air.

It is hard to believe that November is just a week away and winter is just around the corner. As the sun begins to set earlier and the air has that wonderful autumn crisp in it, our campaign would like to offer you an exclusive way to show your support. We have designed a ‘Bachmann for President’  fleece jacket to offer you as special gift if you make a donation of $75 or more to my campaign today. This is an exclusive fleece you can wear throughout the fall to show you stand for constitutional conservative values and support our campaign for President.

“The email goes on to note that the fleece, a handsome dark-blue pullover with Bachmann’s campaign logo embroidered on the left lapel, is suitable for wearing ‘at one of our campaign events, your local Republican Party gathering or your local Tea Party rally.’ ” Think of the envious looks from others at your next booya.

Want a (seemingly) comprehensive list of every restaurant opening, closing and “coming up”? Heavy Table’s Jason Walker is your guy. On the “closing” list:

  • Cafe Twenty Eight, 2724 W 43rd St, Minneapolis. Closing Dec. 31. | 612.926.2800 | cafetwentyeight.com
  • Shorty & Wags, 3753 Nicollet Ave S. Closes Oct. 30. | shortyandwags.com
  • Koyi Sushi, 2111 E Franklin Ave, Minneapolis
  • Pacific Islander Cuisine, 920 E Lake St (Midtown Global Market)
  • Savories Bistro, 108 N Main St, Stillwater. Closing end of October. | savoriesbistro.com
  • The Herb Box, 755 Prairie Center Dr (inside Lifetime Fitness), Eden Prairie
  • Blink Bonnie Subs, 237 East 7th St, St. Paul
  • NorthCoast, 294 East Grove Ln, Wayzata
  • Wayzata Eatery, 1179 Wayzata Blvd E, Wayzata
  • Krua Thai, 432 University Ave W, St. Paul
  • Hard Rock Cafe, 7th St and Hennepin Ave, Minneapolis.

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Comments (8)

  1. Submitted by Neal Rovick on 10/27/2011 - 08:52 am.

    The new metering system already has a big revenue increase in it–the parker has no idea of how much time is remaining at the the spot they pull into. The previous parker most likely had paid for more time than they would use (have you seen how much a ticket costs?), but there is no way for the next parker to tell if there is no time remaining or two hours remaining. So they then fully pay for their expected parking (plus some overage). And so on, all day. At busy parking spots, the parking revenue of the new system could easily be doubled or tripled over the old meter system in a day.

  2. Submitted by Jackson Cage on 10/27/2011 - 09:24 am.

    OK, I’m sure I’m not the only one who finds it obviously ironic that of all the fabrics Michelle could use to snag campaign donations, she chose “fleece”.

  3. Submitted by James Hamilton on 10/27/2011 - 09:34 am.

    I couldn’t help but wonder where the Bachmann fleece came from: China or the backs of her supporters?

  4. Submitted by myles spicer on 10/27/2011 - 11:15 am.

    Let me say as a small business owner that the bank’s contentions that there is “not enough loan demand from credit-worthy borrowes” is justplain baloney! I speak first hand and from experience. Part of the difficulty is what the bank’s consider “credit-worthy” (as the article states); and they can assess any definition they want to that phrase. They have set the bar so high, and created collateral requirements so severe, that most small businesses do not even seek lending anymore. It is a fruitless search; and the good small businesses that could expand, hire and prosper are being starved for working capital.

    The truth is, banks are resisting lending at all for reasons too long to enumerate here.

    I am also bit familiar with the governor’s task force, and this plan is sound and useful. If this does not create mmore active lending it would be highly unfortunate for Minnesota small businesses.

  5. Submitted by Greg Price on 10/27/2011 - 02:25 pm.

    I disagree with the last commentor…having been on the other side of the table…liquidity does not help low loan demand is exactly right.

    Communication is the biggest bug-a boo between lenders and business owners.

    you need to come in with a plan that states what you want, why you want it, and how you are going to pay for it… cash flow is of major importance.

    if you have problems with the planning…contact your local SBA office…they have people and materials that can help you through the process. And with most SBA loans you only need 10% of your own equity into it. SBA lending is at an 5 yr high right now.

    And here is another info point…SBA can finance working capital also…

    One last item…if you have defrauded the goverment, ditched your school loan, owe back taxes and not gotten a repayment plan approved,
    or have tax liens…forget it…you are out of the program.

    remember banks need to make a profit and pay their employees just like you do…

    Note: “the good small businesses that could expand, hire and prosper are being starved for working capital” do it with SBA loans…

  6. Submitted by Jackson Cage on 10/27/2011 - 02:42 pm.

    So Greg @ #5, post-2008 suddenly no business knows how to apply for a loan? That’s a load of you-know-what!

  7. Submitted by Greg Price on 10/27/2011 - 04:22 pm.

    My point was that a lot of small business owners can use help in planning out their business goals and produce effective business plans. In doing so..many discover that their needs were not what they originally thought, and perhaps a better solution or two is available..

    My other point is that business loan funds are out there if you don’t mind jumping through hoops to get it. no one loans you money because they like the color of your eyes…those who are organized…with a plan…and can show payback are the ones that sail through the lending process.

  8. Submitted by Kevin Watterson on 10/27/2011 - 06:50 pm.

    I’ve also heard of many instances where banks would like to loan money to businesses that were ready and able to pay, but the bank couldn’t make the loan because regulatory standards required them to be so judicial about not loaning to a credit risk that it actually meant turning at lot of credit-worthy businesses away. This was primarily a few years ago when banks going under made more frequent news, so it may have eased since then.

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