After this legislative session ends in failure, DFLers and Republicans will have some big sales jobs to do explaining why their way of balancing the budget is the better one.
Interestingly, Republican leadership still has a sales job to do within its own caucus about why leadership so quickly moved to the $34 billion figure as its baseline amount. Many of the most fiscally conservative members found that number too high.
Recall, at the start of the session, it was believed Minnesota would have around $32 billion in revenue. Republicans started the session vowing that they would balance the budget around that number.
When the new forecast for the biennium showed a likely $34 billion in revenue, Republican leaders quickly accepted that figure, which fiscal conservatives in the caucus thought was a mistake — both from a strategy point of view and from a point of view of principle. Remember, many of these Republicans came to St. Paul with the goal of downsizing government.
According to a legislator who asked not to be named, leadership adopted the $34 billion number at the request of several committee chairs who were finding it almost impossible to cut spending enough to hit a $32 billion goal. The new forecast, with the new money, made the cutting job somewhat easier.
But, by quickly accepting the new money “in the checkbook,” Republicans lost their ability to negotiate, according to the legislator. Had leadership continued to push the idea that they’d balance the budget at $32 billion, they could have moved to $34 billion in these last days.
Bad ‘poker strategy’
“They showed their cards and then said, ‘Let’s play poker,’ ” the legislator said.
Many in the caucus are still miffed. That’s why you see the penny lapel pins on some House members. Those pins signify “not a penny more” than $34 billion.
That’s the Republican problem internally.
But how, between now and a special session — or between a shutdown and then a special session — will Republicans sell their all-cuts approach to Minnesotans?
They’re sure to attempt to continue their mantra that raising taxes on the wealthiest would be “a job killer” in the state. They’ll also continue to push the idea that the state should be no different from any family or business that “must live within its means.”
Now, it also appears that Republicans will attempt to counter the possible perception that Gov. Mark Dayton has been mature and attempted to compromise with Republicans by “moving to the 50-yard line” but that Republicans won’t budge.
In a letter to the media over the weekend, Republican Party Chairman Tony Sutton tried to explain why compromise isn’t always a reasonable thing. Unlike so many Republican arguments, this one is not the stuff of a simple sound bite.
Sutton’s major point is that every time Republicans have compromised with DFLers, government has grown.
“The only Republican victory was ‘it could have been so much worse,’ ” Sutton wrote.
At one point, in a mostly temperate letter, he couldn’t help going over the edge, implying that progressives/liberals are “evil.”
“Without being overly rhetorical, a compromise to the left is a compromise of good and evil,” he wrote. “It is foisting upon Minnesotans a high tax/high service model that Republicans believe (and budget deficits have vindicated) just can’t be sustained, and the people hurt the most are the people government is supposed to protect, benefit and secure.”
Sutton’s letter could be seen as a reminder to Republican legislators to refuse to budge on the budget as much as it was a letter to the media about the failures of compromise.
“The people of Minnesota sent Republicans to St. Paul to give new birth to the uniquely American ethic of ‘Live Free; Life Better,’ ” Sutton wrote. “Republicans in the Legislature are not about to compromise that ethic for the solace that things ‘could have been so much worse.’ Republicans will not separate compromise from its consequences.”
GOP, two-pronged message; DFL, one
So the Republican sales approach will essentially be two-pronged:
• Raising taxes on the wealthiest will kill jobs. (If jobs aren’t killed, the economy will flourish and the state’s coffers will be filled.)
• Government is too big, Minnesota is already among the highest-taxed states in the land and compromise would only allow it to grow bigger more slowly.
This time, the DFLers have the simpler sound bite: “Tax the rich.”
Now that Dayton has backed off his initial position and is seeking “only” $1.8 billion in new revenue, the governor has much more enthusiastic support among DFL legislators.
The administration will argue that the tax increase will affect slightly less than 2 percent of taxpayers. Those affected will be couples with a taxable income of $250,000 ($305,000 gross) and single taxpayers making $159,000 ($179,000 gross) The rate of increase on amounts more than those baselines will be 1.9 percent.
In 52 of the state’s 87 counties, less than 1 percent will be affected by this fourth tier.
The power and wealth of Hennepin County keeps showing up in all sorts of ways. Of the 41,986 taxpayers impacted by Dayton’s fourth tier, 17,133, live in Hennepin, about 3.1 of the county’s population. Fewer than 25 affected taxpayers live in each of the counties of Kanabec, Koochiching, Lake, Lake of the Woods, Lincoln, Mahnomen, Red Lake and Traverse.
Not only will DFLers pound home the notion that few will be affected by a tax, but they also will say that Department of Revnue statistics will show that even with the increase, people in those income brackets still will be paying a lesser percentage than people in lower brackets.
And finally, the DFLers will argue, that those increases will prevent “draconian cuts” in such things as nursing home services and health care for the poor, as well as hold down property taxes and minimize tuition increases at state colleges and universities.
And over and over again, they’ll repeat the Dayton argument that in a democracy, everyone has to compromise; everyone has to give up something and that he has done that.
Those will be the arguments we’ll be hearing throughout the coming weeks. If there is a shutdown — if state parks are closed and construction projects halted — the public will be paying close attention. And the public likely will be hostile to all pols.
“If there’s a shutdown,” said Rep. Dean Urdahl, R-Grove City, “I won’t be doing any parades.”
Doug Grow writes about public affairs, state politics and other topics. He can be reached at dgrow [at] minnpost [dot] com.