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Hennepin County Commissioner Peter McLaughlin decries GOP legislative ‘raid’ on metro transit fund

Republican legislators are taking little stashes of cash from all sorts of places as they put together their budget this week.

But one large issue is emerging: Some of the cash that the Republicans are using to balance their budget without raising taxes doesn’t seem to belong to them.

Monday night, for example, the House Transportation Policy and Finance Committee voted to take $69 million that had been raised, via a special sales tax, by five metro-area counties to be used for the expansion of the metro transportation system.

Go through that again, slowly.

Since 2008, residents of five metro area counties — Hennepin, Ramsey, Dakota, Anoka and Washington — have been paying a quarter percent sales tax specifically for the purpose of expanding the transit system infrastructure within the metro area.

Now, one legislative committee has decided to take that money to “replace” $51 million Republican legislators had cut from the general fund for metro bus operations.

McLaughlin calls move ‘outrageous’
“Outrageous” is how Hennepin County Commissioner Peter McLaughlin described the move. “They’ve taken money from our pocket and stuck it in their pocket, and now they’re claiming, ‘We’re spending more’ on transit.”

Peter McLaughlin
Peter McLaughlin

Rep. Michael Beard, chairman of the transit committee, justified the move, saying because of the state’s “dire situation” it needs to “explore” all sorts of ways to save money.

Republicans also argued that the $69 million of money that they want from the counties would be used to keep metro-area buses running. In other words, the same purpose would be served — sort of.

The transportation committee passed the legislation Monday night.

There are, however, all sorts of problems with the Beard/Republican view, according to McLaughlin:

•  The money does not belong to the state.

“We [the five county boards] would not have passed the sales tax if we knew the legislators could simply steal the money to solve their problems,” said McLaughlin. “We’re not stupid.”

In fact, two metro counties — Scott and Carver — opted not to join in collecting the special sales tax that was allowed under the 2008 transportation bill. (That’s the bill that created an increase in the gasoline tax and a House override of Gov. Tim Pawlenty’s veto.)

• By taking the money from the counties and using it for day-to-day operations, the state is cutting off the ability of the metro area to deal with long-term transportation investment.

GOP move could jeopardize bond ratings, federal funds
The money, McLaughlin said, is targeted for such projects as the Southwest Corridor light-rail project, which is to begin following completion of the Central Corridor light-rail project. (There are at least some Republicans who still are attempting to kill the Central Corridor.)

“Taking it [the sales tax money] to deal with short-term problems is a continuation of the Pawlenty policies,” McLaughlin said. “It’s bad for the state. It’s bad for our long-term competitiveness.”

• If it would take the money, McLauglin says, the state would undermine the high bonding credit rating metro counties currently have.

The counties receive high credit scores — and get low-interest rates on bonds — by having revenue streams to pay off the bonds.

• If it would take the money for day-to-day operations, the state would destroy access to millions of dollars of federal money for long-term projects.

“They’re gonna screw up [federal] money for the Central Corridor and the Southwest Corridor. We’re within weeks of receiving $475 million [of federal money] for the Central Corridor. If we don’t get that money, it’s going to go to Denver or Portland or Austin [Texas] and we’re gonna be left sitting on the sideline for another decade.”

• If it is allowed to take this $69 million, no money being raised for other special projects, such as the ballpark, is safe.

“If you’ve got a local sales tax for any purpose, you’re on notice that you’re vulnerable,” said McLaughlin.

It should be noted that this isn’t the only raid that Republican-led Legislature is attempting to conduct on previously local funds.

Iron Rangers, for example, are fuming over Republican efforts to take $60 million from the Douglas E. Johnson trust fund and apply it to the state’s general fund.

“This proposal continues the Republican agenda of robbing Peter to pay Paul,” said Rep. Carly Melin, DFL-Hibbing.

The fund is based on production of Iron Range mines, which do not pay property taxes.

There are all sorts of questions surrounding the legality of this effort. Even the bill’s author, Rep. Bob Gunther of Fairmont, told Minnesota Public Radio that he questions whether the $60 million transfer would stand up in court.

Melin said the Senate proposal — with hearings expected today — is slightly different from the House approach.

She expects Senate Republicans will want to take $45 million with a promise to pay the money back at some uncertain date in the future.

“Unacceptable,’’ she said. “They keep preaching, ‘live within your means,’ but they don’t practice what they preach.’’’

The fund was set up 34 years ago to help stabilize the vagaries of the mining industry. Only interest is used from the fund to help create new industries on the Range.

Melin pounded on the idea that mines do not pay property tax. The production taxes are in lieu of that money.

“If they can take that money,’’ she said, “it will open a Pandora’s box. All property taxes would be fair game.’’

She also said that during a hearing, Gunther said he “didn’t want to do this’’ but was left with few choices.

Even if these proposals make it through the legislative process and land on the desk of Gov. Mark Dayton, they face almost certain vetoes. At least, that’s the hope of people such as McLaughlin.

Still, the process is time-consuming and a cause of considerable angst.

“It’s like Whac-A-Mole at the Capitol,” said McLaughlin. “Last week, [Rep. Mark] Buesgens had a bill that said you couldn’t invest a penny in rail transit until all highways in the state are up to A-plus standards. That bill’s been withdrawn, but now they’re trying to steal our transit money. Every day, it’s something different. It’s a bad idea a day.”

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

Comments (14)

  1. Submitted by Amy Wilde on 03/23/2011 - 10:30 am.

    I’m a rural resident without a dog in this fight, but Commissioner McLaughlin has his facts right. Go Peter!

  2. Submitted by Jim Roth on 03/23/2011 - 10:33 am.

    I’m with Peter on this one. The House Republicans, in their zealousness, are not beyond essentially stealing the money to pursue their agenda. They have a good role model in this in the former governor and now self-annointed presidential hopeful.

  3. Submitted by Bill Coleman on 03/23/2011 - 10:37 am.

    Why doesn’t the MN GOP just vote to take the money from North Dakota? They seem to have plenty of money over there! I know that here in Washington County, commissioners have bravely voted to continue this tax as a way to improve transit.

    The GOP loves to talk about local control, then they do this. They love to talk about how much they trust local decision-making, but they criticize local elected officials for raising property taxes to maintain local services in spite of cuts to LGA and HACA.

    I have been thinking that the GOP wants us to go back to the 1950s not recognizing that tax rates were high, union membership was high and the middle class was growing. Now I think that they want to go back to the 15th Century where the king’s soldiers just went out and took money from the towns to support the lifestyle of the lords and ladies.

    Thank goodness, we have Mark Dayton for governor!

  4. Submitted by Michele Olson on 03/23/2011 - 10:38 am.

    By the same reasoning, I guess because of my “dire” financial situation, some bank somewhere wouldn’t mind if I helped myself to ITS money. (KIDDING!)

  5. Submitted by Virginia Martin on 03/23/2011 - 11:25 am.

    The repubs would rather STEAL the money than raise taxes at all (except of course for property taxes). Do these people understand ethical behavior or for that matter, state government?
    They know Gov. Dayton will veto this. Why aren’t they creating jobs, since they kept saying that was key and that they could do it?

  6. Submitted by Neal Rovick on 03/23/2011 - 11:28 am.

    Does anyone still wonder why the Republicans did not reveal their budget “plans” earlier?

    It’s a real Frankenstein monster of a bill that they hope none will notice the stitches and the blood and the misfitting parts.

    And coming Friday, “It’s alive!!”.

    Will there be anyone to report ALL of the flaws, faults and inadequacies of the budget? What we are getting is the drip, drip, drip of the most obvious schemes. What is buried in the subtleties? What is there in malice? What is there in ignorance? A clear pattern of contempt and deceit will emerge.

  7. Submitted by Steven Liesch on 03/23/2011 - 11:42 am.

    If we take this idea a step further,we could end the “New Stillwater Bridge” because it would only help Wisconsinites.

  8. Submitted by Greg Kapphahn on 03/23/2011 - 12:15 pm.

    No, actually, Michele you’re right. We have a word in the English language for this behavior.

    It’s called “Stealing.”

    Governor Pawlenty did it several times – with the funds designated for anti-tobacco education and ads aimed at teenagers, for instance.

    The Republican Party – the party of thieves!

  9. Submitted by will lynott on 03/23/2011 - 12:21 pm.

    If you don’t know history you’re doomed to repeat it. The republicans are now re-learning the Pawlenty lesson–YOU CAN’T JUST CUT! You have to find new revenue, and the contortions they’re putting themselves through to accomplish that would be hilarious were this not such serious business. And the extent to which they allow their ideology to trump good governance is astonishing.

    Poor, poor Bob. He whines that he “didn’t want to do this” but was left with few choices. Bob, why are you so willing to loot a special fund set up by forward looking thinkers with a bill you acknowledge wouldn’t make through the courts, all to protect rich people who can more than afford to help out in this crisis?


  10. Submitted by Cecil North on 03/23/2011 - 01:17 pm.

    If I decided to pay off my mortgage by robbing my neighbors, it would be a felony. What’s the difference here?

  11. Submitted by Nancy Gertner on 03/23/2011 - 03:20 pm.

    Leadership has given very unreasonable budget targets to the committee chairs. Like any parent with a starving child, they will steal from anyone with a few cookies still left in their jar.

  12. Submitted by William Pappas on 03/23/2011 - 06:53 pm.

    Karin, I think that number is something in the order of 750,000. The republicans are like the Sheriff of Nottingham venturing out into the countryside to raid and take anything to which they feel entitled. Washington County had a year long debate about that transit tax and eventually all the commissioners came around to support it even though several are arch conservatives. I’ll bet they’re feeling just a bit double crossed at this point. They’ll have a little explaining to do to their constituents who have ponied up on that tax expecting transit to finally show up in Washington County. What a joke. These new republicans are out of their minds. Revenue, folks, rescind the Pawlenty tax cuts and the problem is largely corrected.

  13. Submitted by Bernice Vetsch on 03/23/2011 - 08:49 pm.

    Maybe it’s time to take the Republican leadership to court for misappropriation of dedicated funds AND for fiscal mismanagement.

    One of their plans is to “save” money by cutting back on in-home care for elderly and disabled Minnesotans. We will spend much more when those people not getting enough help to stay in their homes or independent apartments have to move to nursing homes. When Senator Linda Berglin brought this to the attention of the Republican committee head during discussion of this issue, the chair had the grace to look uncomfortable for a moment. But only for a moment.

    And this can’t be the only case in which we will spend a lot more than if funding weren’t cut back. Or in the cases of privatizing governmental responsibilities and having to pay enough to guarantee profits instead of just to get the job done.

    There seems to be absolutely no recognition on the part of the majority that lack of revenue due to their refusal to tax the wealthy at the same (but preferably higher) rate than the rest of us is the major cause of our so-called “crisis.” A mistake that can be corrected in a minute if they only would.

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