DFL leaders unveil their ‘budget fix,’ but GOP says the plan is dead on arrival

The echoes of old fights filled the state Capitol this morning as DFL legislative leaders proposed a budget-balancing plan that includes tax increases and the Republican leaders moaned and groaned and said, “No chance.”

Heard it all before?

Of course.

And now you’re going to hear it for the final days of this legislative session.

Compromise? Forget it. Compromise would get in the way of personal political ambitions and sound bites.

Start with the DFL proposal that that was announced at a news conference this morning to deal with the state’s $2.9 billion deficit.

That plan would call for the creation of a “fourth tier” in Minnesota’s income tax code. Under the plan, married couples with taxable incomes of $200,000 or more would pay at a 9.15 percent rate. Currently, top income earners in the state pay at a 7.85 rate.

The plan, according to Sen. Tom Bakk, head of the tax committee, would “increase the fairness of our revenue system.”

Revenue from that fourth tier would be used to pay back K-12 budget money being “borrowed.”

Chances of passage?

Zero.

For eight years, Gov. Tim Pawlenty has said he will oppose tax increases. And minority leaders in the House and Senate said this morning that there is “no chance” any members of their caucus will vote to override a veto that surely will be slapped all over the DFL plan.

House Minority Leader Kurt Zellers
House Minority Leader Kurt Zellers

“This is four-day old reheated hotdish,” said House Minority Leader Kurt Zellers. “It doesn’t get any better.”

One by one, Republican leaders — including the party’s endorsed gubernatorial candidate, Rep. Tom Emmer — disparaged the DFL plan, disparaged DFLers and disparaged taxes.

One by one, those leaders described those who would be affected by the DFLers’ fourth tax tier as “small business owners,” “young, hard-working couples” and “job creators.”

“Déjà vu,” said Senate Minority Leader Dave Senjem in describing the DFL plan. “Here’s their new idea: tax the rich, tax the rich, tax the rich.”

Never have Republican leaders seemed so confident in their opposition to the DFL majority.

Meantime, DFL leaders presented their proposal as a pure compromise, as well as a way out of the state’s budget woes over the long term. They have accepted 85 percent of the governor’s plan for balancing the budget, they said. The fourth-tax tier is only 15 per cent of the overall solution to turning red ink black.

Indeed, the DFL does incorporate many of the things Pawlenty has demanded. It incorporates many of the items he unallotted last spring. The courts, of course, ruled that he overstepped his executive bounds in the way he used unallotment.

In its proposal, the DFL accepts the governor’s “borrowing” of more than $1 billion from K-12 funding. (Legislators have argued that under Pawlenty’s plan, there was no way to pay back the money being borrowed. Their proposal does have a payback plan.) Many other smaller Pawlenty shifts and cuts are accepted by DFLers.

Senate Minority Leader Dave Senjem
Senate Minority Leader Dave Senjem

They were pleading with Republicans to see the compromises DFLers claim they are willing to make.

If the DFL plan falls to a Pawlenty veto, Senate Majority Leader Larry Pogemiller vows that Republicans will get their chance to vote on a “cuts-only” budget plan.

“To my friends on the other side of the aisle,” said House Majority Leader Tony Sertich in a more conciliatory tone, “we need to get away from sound bites. We can say, ‘No new taxes’ until we’re blue in the face and that doesn’t solve anything.”

Republicans, who were in the back of the room as Sertich made his plea, weren’t impressed.

They blasted away with sound bite after sound bite.

What of compromise? Is there any compromise in Republican opposition to tax increases?

“No,” said Senjem.

Doug Grow writes about public affairs, state politics and other topics. He can be reached at dgrow [at] minnpost [dot] com.

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Comments (17)

  1. Submitted by Hiram Foster on 05/10/2010 - 12:41 pm.

    “Under the plan, married couples with taxable incomes of $200,000 or more would pay at a 9.15 percent rate. Currently, top income earners in the state pay at a 7.85 rate.”

    Assuming that this is the case, I think it’s important to understand that what we are talking about here is an increase in the marginal rate, one that applies to income earned over $200,000.

    “Chances of passage?”

    Hopefully, the chances of passage by the legislature are pretty good. It would be strategically disastrous for the leaders to propose at this point, this kind of measure if they couldn’t pass it. The veto of the governor is what they should be concerned about.

  2. Submitted by Hiram Foster on 05/10/2010 - 12:50 pm.

    Here’s what I would do.

    I would prepare a set of bills that balance the budget but which avoid whatever possibility of the line item vetoes that’s out there. I would present them to the governor along with an offer to negotiate in mutual good faith. I would set a de facto deadline such that if the negotiations are not successful, the bills could be approved no later than Thursday. If the negotiations aren’t successful, I would approve the legislation on Thursday, put the bills on the the governor’s desk, and immediately adjourn the session sine die.

    At that point, I would put Margaret out front, center and alone as the sole representative of the legislative majority. She would be the only one I would put on Almanac on Friday night. I would pit her in every way possible against the governor. That would give her the chance to prove herself as the bold and decisive leader willing to take on the governor, and by extension Emmer, and the other DFL primary candidates, who would have been rendered toothless and irrelevant by this whole process.

    One thing I would have Margaret say is that she is open to compromise, now and at all times in the future, but that she will never allow the legislature to come into special session until she is convinced that there is either a deal in place or that the governor is willing to negotiate in good faith.

  3. Submitted by Ron Gotzman on 05/10/2010 - 01:12 pm.

    I think Alan Page should decide this issue. He could “discern” the “will of the people” and carry the day for the “tax and spend crowd.”

  4. Submitted by chuck holtman on 05/10/2010 - 02:04 pm.

    Why doesn’t somebody (the DFL) ask the folks who would be taxed? Most of the couples I know who are doing pretty well recognize that while the worst-off get some direct payments that help them get through, a functioning state provides most of its benefit to those doing the best: without a reasonably stable structure of laws and institutions, wealth is unstable and uncertain. I’d venture that a substantial majority of such folks would be more than happy to pay a little more with just a bit of confidence that it is part of a reasonably thoughtful approach to getting the state back onto a better footing. Republican leaders seem to assume every well-off person is selfish; I won’t conjecture as to the psychological underpinnings of that tendency.

  5. Submitted by Hiram Foster on 05/10/2010 - 02:09 pm.

    The great thing about the unallotment decision is that it gave the governor clear guidelines about how to proceed in the future in a way that’s both consistent with the constitutional structure of our state, while maintaining the usefulness of the statutory provision. If the governor and the legislature both do the jobs the people of Minnesota hired them to do, there is no further need for recourse to Justice Page.

    In writing the unallotment decision, Justice Magnuson accomplished a superb piece of constitutional lawyering.

  6. Submitted by Jeremy Powers on 05/10/2010 - 02:46 pm.

    I don’t think there is any chance this will pass, but I don’t think any self-respecting legislator (i.e., Democrat) wants to go to Saint Paul only to trash the state. So the DFLers came up with a plan the way it SHOULD work. They’ll be forced to allow Pawlenty to continue his march to mediocrity, but at least not without showing any intelligent people (i.e., Democrats) what a real plan would look like.

  7. Submitted by Eric Ferguson on 05/10/2010 - 03:39 pm.

    DFL legislators have been telling their constituents that even if there’s an income tax increase, this won’t get fixed without painful budget cuts. Why can’t Republicans be equally adult about it, and tell their constituents that even though the budget will be balanced mostly with cuts, there’s no avoiding tax increases?

  8. Submitted by Thomas Swift on 05/10/2010 - 04:28 pm.

    Eric, I guess it’s possible that Republicans might have seen the reports about $50k junkets to Grand View Lodge on Gull Lake for state employees.

    http://kstp.com/news/stories/S1537226.shtml?cat=5

    Maybe they’ve been alerted to the fact that this year, the state will spend $62M this year for leases on prime office space, although the state is awash in empty publicly owned buildings.

    http://kstp.com/news/stories/S1544557.shtml?cat=5

    Maybe they’re wondering why the Health Department is spending $2.6 million for space in the Golden Rule Building in St. Paul, even though the agency has its own new building down the street.

    Maybe, Eric, the Republican’s definition of “painful cuts” differs from that of intelligent, self-respecting Democrats….and maybe, just maybe, there’s a difference of opinion on what constitutes “adult” behavior as well.

  9. Submitted by Hiram Foster on 05/10/2010 - 04:42 pm.

    Actually, there is agreement on the cuts. Where there is disagreement is how to finance the remaining deficit. The DFL wants to tax, the governor wants to borrow.

  10. Submitted by Bill Schletzer on 05/10/2010 - 04:49 pm.

    The simple truth is that reasonable compromise is impossible. Any Republican that votes for any bill with one dollar of tax increase will be shunned by his caucus and lose his office. Pawlenty will lose any chance he has of running for president if he accepts any tax increase. Ther Republican/Tea Party side wants the other side to compromise/surrender. They are locked in and the Democrats don’t really have any alternative but to be locked in in response to the Republicans. The courts have sided with democracy over imperial rule. Pawlenty and his cohorts hold up model low-tax states such as Mississippi and Alabama to be what we should strive for.

  11. Submitted by Thomas Swift on 05/10/2010 - 05:05 pm.

    Hiram, if that’s the case then both the Governor and the Democrat legislature are not serving the best interests of the taxpayers of the state of Minnesota.

    As I’ve just pointed out, and contrary to what panic stricken leftists are claiming, there’s gobs of fat left to trim before we even touch the muscle of government…much less approach “the bone”.

  12. Submitted by Greg Kapphahn on 05/10/2010 - 05:33 pm.

    MENE MENE TEKEL PERES (the handwriting on the wall from Daniel 5:18-31).

    King Timmy, like King Balshazzar, needs to read the handwriting on the wall and recognize that, even if he is nominated, his bid to be President of the United States is doomed (and for many of the same reasons which brought the end of Balshazzar’s reign).

    Only if he turns aside from his wicked ways and answers God’s call to preserve and protect the poor and unfortunate of the state of Minnesota, and the well being of the state infrastructures upon which the entire population depends, will he be able to prevent the fate he’s currently bringing down upon his head – that of total failure leading to complete political and personal obscurity if not ignominy for the rest of his life in this earthly realm.

  13. Submitted by Hiram Foster on 05/10/2010 - 06:22 pm.

    “As I’ve just pointed out, and contrary to what panic stricken leftists are claiming, there’s gobs of fat left to trim before we even touch the muscle of government”

    There is a fair amount of panic or at least distress on the right. Lots of Republicans voted against the reinstatement of Gov. Pawlenty’s unallotments. And Republicans in the legislature have been forced to take extremely difficult votes in support of the governor. I am thinking here of the GAMC vote which caused lots of pain with Republicans behind the scene.

    We are talking significant cuts this year, and much larger cuts next year for the next biennium. I think the lines are fairly drawn for the next election. The state spends money on two things, health and human services, nursing homes mostly, and education. If we elect Tom Emmer, and even I think that’s likely, that means the state will largely get out of the nursing home business. My Republican friends assure me that nursing homes are largely duplicative and lots of people want to step up and pay the costs associated with our aging population. We will see.

  14. Submitted by Thomas Swift on 05/10/2010 - 07:53 pm.

    Hiram, how many elderly people could be cared for with the $363,000 the state plans to spend on junkets at vacation resorts for employees this year?

    How many GMAC recipients sould be served with the $63 million the state will spend on cushy offices, while there are hundreds of state owned offices sitting empty?

    Please explain your thinking.

  15. Submitted by Hiram Foster on 05/11/2010 - 06:04 am.

    “how many elderly people could be cared for with the $363,000 the state plans to spend on junkets at vacation resorts for employees this year?”

    Not many, obviously. The figures you are talking about just don’t mean much in the scheme of things, although I am sure the Pawlenty administration could tighten up the way it runs the government a bit.

  16. Submitted by Hiram Foster on 05/11/2010 - 06:10 am.

    Here is something, I think there is confusion about. Yesterday, the DFL proposed an increase in the tax rate for couples earning 200 thou or more from 7.85% to 9.1%. Most news reports either suggest or outright say, that rate applies to the entire income in earners in that tax bracket. I received an email from a Republican state rep. last night stating that what Democrats were proposing was a nearly 17% increase in taxes on couples making 200 thou or more.

    But was the DFL proposing a tax increase on overall all income, as many reporters were proposing, or an increase in the marginal rate, that is, the addition of a new tax bracket with that higher rate? If the latter, the effective increase would be less than 17%.

  17. Submitted by Hiram Foster on 05/11/2010 - 08:19 am.

    “Compromise? Forget it. Compromise would get in the way of personal political ambitions and sound bites.”

    I don’t know if I agree with us. It seems to me that Margaret would like nothing more than an end of session photo op with Tim Pawlenty. One possible alternative, a nightmarish succession procession of endless special sessions, would pretty much destroy the other campaign.

    The other day, as I was leaving the office of a Senate DFLer, who had just dispensed the standard no compromise line to the group of moderate liberals I was with, one of our group mumbled to no one in particular, “If he thinks I am going to work for him, during the campaign, he is crazy.” The Senate DFL currently reminds me of my favorite James Callaghan line, “Turkeys voting for an early Thanksgiving.”

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