The Dayton Doctrine: Governor delivers ‘hard-nosed’ speech to Chamber on budget task

Marching undeterred into enemy territory, Gov. Mark Dayton took no prisoners Thursday night.

With new Vikings coach — and lobbyist? — Leslie Frazier in the audience, Dayton told about 1,500 business leaders, legislators, government officials and lobbyists at the Minnesota Chamber of Commerce’s legislative priorities dinner to strap on their helmets.

The political ride from now until May 23, when the Legislature must adjourn, is going to be a rough one.

“With your importance comes responsibility,” Dayton somberly, bluntly, told the throng of corporate types, office holders and policy wonks at St. Paul’s RiverCentre. “Many of the decisions we will be forced to make in the coming months will be difficult ones. The challenges confronting us are enormous . . . Some sincerely believe that all we need to do is apply a couple of our respective campaign slogans to solving them and we can all be home by Valentine’s Day. I disagree.”
Cupid wasn’t in this room. This was no rousing, feel-good, back-slapping speech. In some ways, it was a collection of some of Dayton’s campaign trail greatest hits, filled with the economic and financial statistics he has mastered. But it was told to an audience filled mostly with folks who wished he weren’t their governor.

Gov. Mark Dayton
MinnPost/Jay Weiner
Gov. Mark Dayton

“I’m very delighted to be with all of you here tonight,” he said at the start of his remarks. “I mean it both facetiously and seriously when I say that one of the great features of our democracy is that you and some of your friends and allies could spend three-and-a-half-million dollars to defeat me in an election and, after it’s over, invite me for dinner.”

But like an annoying cousin who can’t help himself from talking about politics at the holiday table, Dayton delivered an, at times, passionate lecture on the state of Minnesota’s budget, its work force and the need for the business community to come to terms with “the hard facts” of a state that — all things considered — is sinking in key national economic and educational rankings.

Property taxes key
His speech, which he wrote himself and by hand, was intended, Dayton told reporters later, as a “starting point” for the intellectual and political confrontation sure to come with the new Republican-controlled Legislature.

As he said often during his campaign, the “no-new-taxes” scenario of the last eight years under former Gov. Tim Pawlenty simply wasn’t so.

Dayton cited huge increases in property taxes that have hit middle-class families and the companies that many in the audience own or operate. He noted how taxes have been cut for nearly two decades in Minnesota but pointed out that per capita income hasn’t grown and the gap between the rich and the middle class has widened. Meanwhile, taxes on the wealthy have been reduced more than on the middle class.

“During the ‘quote’ no-new-taxes era of the past years,” Dayton said, total property taxes on home owners and businesses increased from $4 billion to $7 billion, an increase of 75 percent. He noted that Minnesota businesses pay, on average, four times more in property taxes than corporate taxes.

“Any further discussion of no new taxes in Minnesota must not just include property taxes, it must start with property taxes,” he declared.

He said that “it’s been convenient for some state policy makers” to cut government aid to counties and school districts and “to wash their hands of any responsibility of the unavoidable consequences.”

He said that even if he and the Legislature cut the operating expenses of all state agencies — closing state prisons, stopping snow plowing and sanding, shutting down every park-and-rest stop — that would trim only $3.5 billion from the state budget deficit, barely half of the estimated $6.2 billion shortfall.

“For anyone who thinks this session is going to be easy and painless, please share your magic potion with the rest of us,” Dayton said, “or else get to work reading and understanding the state budget as I have.”

As he spoke, he stood all alone in front of the 150 or so tables, at his bully pulpit with two large TV screens on both sides of the room, enlarging him for all to see. It was so hushed in the massive hall you could have heard a left-over “Vote for Emmer” campaign button drop from someone’s pinstriped suit jacket.

Frazier as lobbyist
Speaking of whom … former Rep. Tom Emmer, the Republican gubernatorial candidate who lost to Dayton by about 9,000 votes, was on hand, looking refreshed, embracing former colleagues and supporters, and still pondering his future.

Also there was Leslie Frazier, who, we thought, was promoted to Vikings head coach earlier this week to win games, not votes for a new stadium. But before Dayton spoke, Frazier was working the concourse outside the hall like a seasoned lobbyist. He spent a good amount of time schmoozing with new House Speaker Kurt Zellers.

Before the governor's speech, new Vikings coach Leslie Frazier chatted up House Speaker Kurt Zellers.
MinnPost photo by Jay Weiner
Before the governor’s speech, new Vikings coach Leslie Frazier chatted up House Speaker Kurt Zellers.

Minutes later, when Dayton came to the dais, the governor acknowledged Frazier and said, “I know that in your heart of hearts I’m sure most of you would rather hear from Coach Frazier than from me.”

By the time his 26-minute lecture was over, that was for sure.

On the other side
Chamber of Commerce President David Olson said he didn’t view Dayton’s speech as some sort of in-yer-face assault on his organization’s positions on taxes or its support of Emmer during the campaign. “We were honored he was here,” Olson said, but he added, “I haven’t run into many business people that say now’s the time to raise my taxes.”

Olson’s view — and the official position of the Chamber — is that the current $32 billion general fund budget is “adequate to solve our most pressing problems and build the infrastructure that the development of our economy requires.”

“Everyone talks about the deficit,” Olson told reporters after Dayton’s talk. “We’d like to talk about how to spend the $32 billion . . . Let’s prioritize that money first, and then talk about [new] things.”

Here are other Chamber priorities.

Olson, who sat with Dayton during a dinner of chicken, steak, green beans and new potatoes, said their chat was cordial: “We know where we disagree … I think he was setting up the debate.”

It’s one that will start with Dayton soon producing a budget for the Legislature, followed by another state revenue forecast in February, followed by the Republican-controlled Legislature’s budget, followed by that rough ride of cuts or redesign or tax reform or …

In his speech, Dayton urged the business community to focus on jobs and education, particularly the state’s colleges and universities. Again, all fact-based, he talked of Minnesota’s falling positions on K-12 and higher ed funding, compared with other states, and even teacher salaries being 2 percent below the national average.

The scion of the Dayton-cum-Target department store lineage said he learned from his father, Bruce, that “A company’s business did better when it’s customers were doing better. Minnesota businesses do better when their customers, the people of Minnesota, are doing better. To close the circle, our people have done better because our schools, colleges and universities have historically supplied them with superior education.”

Later in the evening, legislative leaders from both major parties engaged in a panel discussion of key issues. It confirmed the difficulties that Dayton forecast, with GOP Senate Majority Leader Amy Koch downplaying the size of a potential bonding bill, and Senate Minority Leader Tom Bakk predicting a large bonding proposal to jump-start the construction industry.

Koch, meanwhile, talked of her imminent legislation to lift a ban on nuclear plants — a Chamber priority. House Minority Leader Paul Thissen warned about the high costs of plant construction.

“None of us at the state Capitol wants to do anything that will harm our state’s business climate,” Dayton declared earlier, urging the business community to bring its talent, expertise and, “most of all, your willingness to work together for a better Minnesota” to the upcoming policy debate.

“My office is always open to you,” the new governor told his adversaries, “You don’t even have to bring a protest sign.”

That brought some laughter, and a smattering of applause.

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Comments (12)

  1. Submitted by Greg Kapphahn on 01/07/2011 - 09:49 am.

    What we will see, by their responses to Governor Dayton’s reasoned and reasonable budget proposals is whether the leadership (which does not, necessarily reflect the overall membership) of the Minnesota “Chamber of Commerce” is interested in the well being of the citizens of the State of Minnesota…

    Or only interested in further padding their own already-overstuffed pockets.

    If they trot out that old “Better Business Climate” B.S. they will be making it clear that the latter is the case and they, somehow, (magically?) expect to continue to profit handsomely at the expense of rest of the citizens of the state many of whom are rapidly sinking toward poverty (if they haven’t already dropped to that level).

  2. Submitted by Ray Schoch on 01/07/2011 - 11:36 am.

    “It was so hushed in the massive hall you could have heard a left-over “Vote for Emmer” campaign button drop from someone’s pinstriped suit jacket.” A very good line, indeed. Well done, Jay.

  3. Submitted by Dennis Tester on 01/07/2011 - 11:38 am.

    “Minority Leader Paul Thissen warned about the high costs of plant construction.”

    Tell me again why the construction trades supported this guy?

  4. Submitted by Patricia Gundersen on 01/07/2011 - 12:14 pm.

    KUDOS to Gov.Dayton

  5. Submitted by Sue Welna on 01/07/2011 - 01:37 pm.

    Ditto on those KUDOS to Gov. Dayton

  6. Submitted by Beth Dhennin on 01/07/2011 - 02:35 pm.

    “Kudos”, indeed…But this is just the Mark Dayton so many of us were convinced we were supporting. Having listened to this speech on MPR, I was taken by Dayton’s passion – and the power with which he expressed it…More Power to You, Mark Dayton!

  7. Submitted by Jon Kingstad on 01/07/2011 - 09:28 pm.

    The Minnesota Chamber of Commerce, like every Chamber of Commerce across the land, including the US Chamber of Commerce, is filed with “leaders” who are convinced that their firms and therefore the country, could never function without them. They are rich, the CW tells them, therefore they must be smart. The same CW tells them that raising taxes is always a bad thing and by golly, if they do that, I’ll move my production or whatever to Mexico, India, China, Indonesia or anywhere where I can get better tax deal.

    What these “really smart, rich guys” never seem to realize is that you can pay poverty wages to people in Mexico, India, China, Indonesia or wherever, but you also need a market for what you are producing. Very soon, America will no longer put up with being exploited for Imperialist gain!

  8. Submitted by Andrew Kearney on 01/07/2011 - 10:38 pm.

    Fabulous work MD-I can already feel the winds of change at work in society… the poor Republicans will not because they can not deliver on their promises and in the end everyone is going to be mad at them-again-ala ’06 and ’08. Slowly but surely the dimwitted and inattentive American public will wade through the slogans from both sides and finally catch on that there is no free lunch and there is not really any substantive waste in government. They will reconcile their appetite with their wallet. As this happens every sector of society will be transformed and become more poor. For whom is the bell tolling? If you have not heard it yet just wait-you will. Dentists wake up-$75 per hour is coming. Wall Street wake up-90% tax rates are around the corner.

  9. Submitted by Stan Daniels on 01/08/2011 - 11:21 pm.

    Well done article Jay. I attended this event and watching the Dayton speech plus the room reaction was interesting. I was a little surprised that Dayton came out that strong, but he did stay consistent to his prior message.

    The moderated discussion that followed was also very good. Regardless of which side you sit on, the event was excellent and I enjoyed hearing all sides discuss the issues.

    For those who thought the room was full of fat cat chamber members, it wasn’t. There were hundreds of Minnesota-based businesses represented and many were 100% Minnesota employees.

  10. Submitted by Paul Udstrand on 01/09/2011 - 11:51 am.

    There is a recent article that’s been making the rounds: “Corporate Profits are Up. Stock Prices are Up. So Why Isn’t Anyone Hiring?”

    Basically the article highlights the flaw in trickle down economics. Trickle down economies only work for the wealthy. You oraganize an economy around the principle of making the wealthy wealthier in the hopes that they will create good jobs for the rest of us, but that hope runs contrary to thousands of years of human experience. What the wealthy will do is simply take the money and demand more. The interesting about the article is a quote from a Harvard Business school guy:

    “Harvard Business School Dean Nitin Nohria worries that the trend could be dangerous. In an article in the November issue of the Harvard Business Review, he says that if U.S. businesses keep prospering while Americans are struggling, business leaders will lose legitimacy in society.”

    I think business leaders lost their legitimacy years ago. Every time we follow their advice, or policy direction, we get some kind of giant bubble followed by a painful recession and collapse. Despite almost 40 years of catering to their demands for a better “business” environments and low taxes- we’re worse off now than we were when started.

  11. Submitted by Sarah Nagle on 01/09/2011 - 04:17 pm.

    I’m stunned. Do we actually have a grownup in charge? This is where Mark Dayton can do his finest work.

    #7 – you are correct in that businesses have to have DEMAND for what they are supplying. This is why I no longer enter Target and Best Buy. It was their choice to make the political contributions they did, but they didn’t seem to realize that the policies of those who they were supporting would have adversely affected their customer base.

  12. Submitted by Nikki Carlson on 01/15/2011 - 03:03 pm.

    Is this speech online somewhere to watch in its entirety? Can anyone post a link?

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