With Dayton’s bully pulpit and simple ‘Tax the rich’ call, GOP having trouble selling its budget message

Republicans are showing increasing signs of frustration over their inability to get their budget message of no new taxes out to the people of Minnesota.

At the third meeting of the Legislative Commission on Planning and Fiscal Policy Thursday morning, Republican legislators repeatedly bemoaned the fact that Gov. Mark Dayton has said he’s come “halfway” in meeting Republicans with a mid-May proposal that calls for $1.8 billion in cuts and $1.8 billion in new tax revenue.

He’s being vague and hasn’t really come halfway, they insisted.

But even in complaining about the governor, the Republicans showed how much more difficult their position may be to sell.

‘Halfway point’ debate continues
For example, Rep. Mary Liz Holberg, head of the House Ways and Means Committee who Thursday filled in for House Speaker Kurt Zeller at the commission meeting, said, “At most, the governor has moved 25 per cent of the way.”

Her point was filled with insider nuance.

Gov. Mark Dayton
MinnPost photo by James Nord
Gov. Mark Dayton

The governor, she notes, is saying he’ll “settle” for $1.8 billion in tax increases. But in his March budget proposal, he also outlined nearly $1 billion in money the state would collect from a variety of fees and health care surcharges. That means, by Holberg’s thinking, the governor actually wants $2.8 billion in new revenue, not $1.8 billion.

And that means he’s really come only 25 percent of the way to the Republicans’ bottom-line position of a spending cap of $34 billion, not 50 percent of the way.

But assuming Holberg’s position doesn’t glaze over the eyes of Minnesotans, it creates a public relations problem for Republicans. She does credit Dayton with moving “25 percent.”

Republicans, meantime, are trying to convince people they’ve made major concessions by showing a willingness to spend more on education than was shown their session-ending budget. But they haven’t said what part of their budget they’ll trim more to find the new education funding. They haven’t budged from their $34 billion target.

“Your feet are stuck in cement” is how Rep. Paul Thissen, one of just three DFLers who showed up for the Thursday meeting, put it.

All messages the Republicans try to get out to the public are proving to be difficult.

In part, that’s because Dayton enjoys the advantage that all governors have in these budget showdowns. He’s the governor, and he’s got the bully pulpit.

Additionally, though, Dayton has become as adept at the simple message as Republicans have been for years: “Tax the rich.” Under his new proposal, 98 percent of Minnesotans wouldn’t see a tax increase.

“I’ve met them halfway,” the governor says, noting that he has dropped billions of dollars from his initial budget in February.

Republicans are left to attack the governor’s seemingly simple position at the margins.

GOP blasts Dayton’s ‘lack of specifics’
Of late, they’ve taken to blasting Dayton’s May compromise because it lacks specifics.

The Republican charge is true. The compromise is remarkably simple. The governor essentially says, “I’ll drop $1.8 billion from my March budget proposal, you add $1.8 billion in new revenues and we’ll meet halfway between your $34 billion budget and my $37.6 budget.”

Republicans on the commission kept asking two of Dayton’s commissioners, Jim Schowalter of Management and Budget, and Myron Frans of Revenue, for specifics.

“Where would he cut the $1.8 billion?” they were asked.

“What would he do with the $1.8 billion increase?” they were asked.

“One side has a full [budget] picture,” said Rep. Steve Drazkowski, advocating the GOP plan. “And the governor is fixated on a tax increase for a minority of Minnesotans. How can we negotiate? It’s abnormal behavior.”

Rep. Steve Drazkowski
Rep. Steve Drazkowski

Schowalter, who also worked under Gov. Tim Pawlenty, said there’s nothing “abnormal” about Dayton’s negotiating position.

“It is normal,” he replied, calmly, to Drazkowski. “You start with a big picture. Then, you work down to the details.”

The governor, Schowalter explained, needs to know the Republicans will add $1.8 billion to their bottom line so detail work can begin.

But that, of course, takes Republicans right to their line-in-the-sand position: Not just no new taxes, but no new revenue as well.

Ironic arguments
That baseline creates some interesting, perhaps even ironic, arguments from Republicans.

Throughout the session, labor organizations claimed that the Republicans were jamming all sorts of anti-worker bills through the process.

But Thursday, Rep. Doug Wardlaw, one of those gung-ho conservative freshmen, sounded like the best friend a workin’ person ever had.

A small corporate tax that Dayton has proposed would raise about $270 million.

“Where does that [increase] land?” Wardlaw asked Frans. “A number of studies show it’s difficult to pass an increase to consumers because of global competition.”

“You’re right to suggest it [a tax increase] is passed on,” Frans replied, saying higher prices, lower wages, lower profits and outsourcing are all ways to deal with a tax increase.

“But,” Frans continued, “we really don’t have information on what Minnesota corporations will do.” He added the corporate tax Dayton proposes is “modest.”

Wardlaw, though, went to war for the working person.

“Luckily,” he said, “there are a lot of studies. The Tax Foundation has studies showing that every $1 in tax results in a $2 reduction in wages. Is this something the governor has analyzed? … His proposal would be a $550 million burden on labor. That’s not fair!”  

(The Tax Foundation is known to be a pro-business think tank.)

“I appreciate your concerns about labor” said Frans.

Sen. Keith Langseth, a DFLer on the commission, dryly noted that South Dakota has no corporate taxes and decidedly lower wages than Minnesota.

Republicans keep trying to come up with new ways to say it: More taxes are bad. But even that argument isn’t so simple as you might think.

GOP legislators, for example, have argued that if any Dayton tax increase were to be passed this session, Minnesota would be one of just three states in which that has happened.
 
Where Minnesota stands in national tax picture
Sen. Geoff Michel again tried to argue that a “tax increase would be a bad message” to the job creators of the nation.

“Really, only three states — California, Minnesota and Connecticut — are seeking increases,” he said.

But it was quickly pointed out to Michel that most other states already had dealt with the problem Minnesota has long avoided.

A half-dozen other states had enacted revenue increases a year ago, including Illinois, which is collecting $3.1 billion with an income tax surcharge. Still another 11 states had increased taxes in 2009, in the wake of the recession which began in 2008.

In all, Thissen said, 39 states have raised taxes since 2008 to “resolve budget deficits.'”

All the while, Minnesota, under Pawlenty, didn’t raise state taxes.

“Many of the governors who raised taxes are no longer with us,” said Michel, in an effort to bolster his no-taxes argument. “Americans are sending a message.”

But even that message isn’t so simple to sell in Minnesota.

Langseth responded to Michel’s comment about the “message Americans sent” in November.

“We had a Republican governor and now a Democrat,” Langseth said. “A message was sent.”

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 (24)

  1. Submitted by Bill Schletzer on 06/10/2011 - 09:56 am.

    I think the message those Republican legislators hear most clearly is that if they vote for any kind of revenue increase, the right wing fanatics who control the party will work to depose them in the next election cycle.

  2. Submitted by Hiram Foster on 06/10/2011 - 10:01 am.

    “Insider nuance” is a kind word for it. In Sen. Michel’s words, it’s all about “framing”. To extend the metaphor a bit, the dispute here is about what’s important, the frame or the picture inside the frame.

    This week, at different times, Republicans have told us their budget would increase state spending by 6, 12 and 13 percent. If Republicans don’t even know what their own budget numbers are, how can they know what their budget would mean for Minnesotans?

  3. Submitted by will lynott on 06/10/2011 - 10:01 am.

    It’s not just the Governor’s surefootedness and his eminently reasonable and easily understood message, although those are formidable and they’re making a big mistake by underestimating this guy.

    It’s also that to sell something, you have to have something that people will buy. There are zero indications that this is the case for them.

    Tough spot, if you’re an ideologue and not a true representative. I picture the governor campaigning for DFL legislative candidates next year, and I’m sure they do as well.

  4. Submitted by Tom Christensen on 06/10/2011 - 10:07 am.

    Republicans are finding it hard to deliver their message because they have totally miscalculated why the public sent them to St. Paul. They believe they were sent there to do social engineering and crazy fiscal matters. In reality what the public wants is to get the Minnesota’s fiscal house back in order without making Minnesota look like Mississippi. Pawlenty did his form of magic to leave behind a $6,000,000,000 debt, which interestingly enough, he never talks about. The Republicans’ no new taxes baloney is nothing short of crazy. There is a way to get there without gutting Minnesota in the process. The Republican mantra of “no new taxes” is pure BS. If they cut it at the state level, it will show up farther down the line. The Republicans lead a difficult life. They are full of fear, don’t want anyone but them to succeed, they think business hires based on tax cuts, not product demand, they want government out of their lives but will be the first to put it back in our lives with a voter ID system for a non-existent voter fraud claim. I understand why it is hard to get your message across when you have a lousy message. We can’t afford to be an all or nothing state. The Republicans either need to learn the art of compromise or find the old Republicans that knew how to compromise. All they are looking for right now is how to get out of the phony position they have put themselves in without losing more than face.

  5. Submitted by Hiram Foster on 06/10/2011 - 10:09 am.

    “Sen. Geoff Michel again tried to argue that a “tax increase would be a bad message” to the job creators of the nation.”

    But fully, or at least adequately funding our schools including our post-secondary schools, while putting state finances on a more stable basis sends a very good message to job creators. And the property tax increase which is the inevitable result of Republican budget policies, which just happens to be the tax those job creators actually pay, sends them a worse message.

  6. Submitted by Dean Carlson on 06/10/2011 - 10:42 am.

    Yeah it’s tough for the Republicans to sell something that 55 percent of the State’s residents oppose.

  7. Submitted by Chris Reynolds on 06/10/2011 - 10:48 am.

    “showing increasing signs of frustration over their inability to get their budget message of no new taxes out to the people of Minnesota.”

    Dear GOP – message received and REJECTED.

    Actually, it was rejected in November when 55.5% of voting Minnesotans voted for a candidate who campaigned on the need for some new taxation in these difficult times.

    When will you get OUR message?

  8. Submitted by Jim Halonen on 06/10/2011 - 11:24 am.

    The GOP has a strategy here and it has to do with the governor’s insistance of a much larger budget and his aloofness of where all that new money would go. They are waiting for him to “spill the beans”, which would be hugely unpopular to the general public. The guv wins if the large budget prevails without having to disclose where it all goes.

  9. Submitted by Paul Udstrand on 06/10/2011 - 11:34 am.

    I think the problem is that no one is buying what the Republicans are selling. They’ve lost credibility, and they apparently bought into their own BS to a much larger extent than anyone realized. They seem to think it’s a “branding” issue, but you can’t just can’t put enough lipstick on some pigs. Besides, it’s not a message, it’s a religion.

    I think some of these Republicans don’t realize that being a conservative isn’t about living in a different reality, it’s not about having a different belief system, it’s about having a different perspective. When you decide that your reality is based on different facts than everyone else’s you spin off into a realm of magical thinking and it becomes impossible to work with anyone who doesn’t share your belief system. Republican here can’t comprehend the nature of compromise because their expectation is that their belief system will dominate the political system, not merely participate in it. Arne Carlson is right, this isn’t you’re mama’s Republican party.

  10. Submitted by Virginia Martin on 06/10/2011 - 11:48 am.

    One of the most alarming things about all of this is the COST. The no new taxes pledge is going to cost a lot if the state shuts down. More than they calculated, I think, such as union contract costs? Have they calculated those costs? Or do they care? Do they understand that property taxes will have to be raised–again–or do they care? Do they know or care that this state is on a downward slide and it’s going to take a lot of money to lift it back up to where it was? They have not got the slightest bit of evidence that higher (miniscule, really) taxes for the wealthy are job killers or send the wealthy and/or corporations fleeing to other states. But there is a great deal of evidence that higher taxes promotes prosperity.
    Finally, do they understand that in fact Minnesotans want to raise taxes?
    They are not listening, but we are watching.

  11. Submitted by Jerry Buerge on 06/10/2011 - 11:57 am.

    If the Minnesota Republican Party wants to obtain some consideration of its position one of the first things they should do is to quick referring to increased revenue as a new tax when they know very well that it is only a partial repeal of the TPAW tax holiday that is fully accountable for the financial problem we are now trying to eliminate.

  12. Submitted by C Kaiser on 06/10/2011 - 12:17 pm.

    Yeah, I guess it’s tough going when trying to sell the public the same failed policies of thirty years ago. “Trickle-down” failed then, and the public now has the fallout results as proof. I just can’t imagine why “they” (as in we…the public,) won’t just open up and swallow their B.S. any longer. I just wish all of the anti-union /anti-tax folks would just leave the state, and go to one of the southern states that subscribe to their failed policies, and leave us here to raise taxes on the 2% that can afford it, and let us turn this “Pawlenty train-wreck” around for the good of our state!

  13. Submitted by Ron Gotzman on 06/10/2011 - 12:36 pm.

    You have to be impressed with “Governor NO” and the DFL. They consistently stay on message – “Tax more and spend more.”

    As our nation (and MN) continues to suffer from the failed Obama economic policies, special interest stimulus spending, and 5 trillion in deficit spending, the MN DFL stay on message.

    We all realize that no matter how much money is confiscated from the private economy, there will still not be enough money to satisfy the DFL special interest groups.

  14. Submitted by Brian Simon on 06/10/2011 - 12:50 pm.

    “Rep. Mary Liz Holberg, head of the House Ways and Means Committee who Thursday filled in for House Speaker Kurt Zeller at the commission meeting, said, “At most, the governor has moved 25 per cent of the way.” ”

    Well, Rep Holberg, how about you move 25% as well & put the ball back in Gov Dayton’s court. Quibbling over whether the Gov has moved 25 or 50 percent, when you haven’t moved at all, is a losing message.

  15. Submitted by John Simmer on 06/10/2011 - 12:55 pm.

    The Replublicans have rebranded trickle down economics by incessantly referring to the wealthy as sacred “job creators” who should be minimally taxed so they can create jobs which allows their wealth to trickle down to the rest of us.

    Two points:
    1) trickle down economics has been thoroughly debunked. It doesn’t work.
    2) Look at the consolidation of wealth amongst a small group of the nation’s wealthiest families. There’s a lot more hoarding than job creation going on.

    We should look at a wealth tax. At the very least Democrats should work to rebrand Republican tax policy for what it is: trickle down.

  16. Submitted by Paul Udstrand on 06/10/2011 - 01:48 pm.

    //We all realize that no matter how much money is confiscated from the private economy, there will still not be enough money to satisfy the DFL special interest groups.

    It’s like a broken record with some of you people. We’re paying lowest level of taxes in 60 years. That didn’t usher in the promised era of prosperity, we got the worst recession in 60 years. And that recession didn’t start in 2008 with Obama got elected.

    By the way, little economics 101 here, we have an economy, the distinction between a “private” economy and a “public” economy pretends that the two can be separated… they cannot. They are not different economies, they are different interdependent sectors of the same economy, if you kill one, you kill the other, which why Norquist is dumbest economic planner in the history of the world.

  17. Submitted by Rich Diedrich on 06/10/2011 - 01:49 pm.

    I just don’t understand the opposition to raising taxes at the very highest income levels. The Minnesota Department of Revenue releases Tax Incidence Studies every second year. The latest study (2011) clearly shows that (in 2008, the latest year with analyzed data) while most Minnesotans have a total effective tax rate of 12% (plus or minus 0.3%), those in the highest decile have a rate of 10.3% and the highest 1% have a rate of 9.7%. How does anyone justify objecting to the Governor’s proposal to start bringing those rates back into alignment and using the money to reduce the increasingly draconian cuts in our state services?

  18. Submitted by Kurt Anderson on 06/10/2011 - 02:06 pm.

    I opened the MinnPost daily e-mail with the hope that this subject line actually promised some information as to how the Republican message is faltering. When I saw that Doug Grow was the author I gave up that hope. As usual, we learn a lot about Mr. Grow’s opinions but get very little data to support his thesis. With me Mr. Grow is mostly preaching to the choir, but having been electorally blind-sided more than once this chorister needs to know whether anything actually is happening out there — beyond some selected quotations from political leaders.

  19. Submitted by David Broden on 06/10/2011 - 02:27 pm.

    The Minnesota GOP is not selling a message because they are not really understanding what Minnesotan want the state to be. The current GOP does not have the progressive leadership vision for the state that the GOP of Elmer Anderson, Luther Youngdal, Harold LeVander,Quie and Arne Carlson as well as the quality legislators that served with them–Frenzel,Al France, Doseland, Duxbury, Hughes and many more. All of these built a vision and a future for Minnesota. Yes new taxes are not preferred but they are part of the responsibility of a legislative body. The GOP of the past made decisions and worked to build Minnesota as a result the people of Minnesota viewed these elected officials as responsible and respected and supported their actions. Today we know is a new era in both government, deficits, and politics but the need to operate as responsible republican representative government approach remains but is not followed by either side.The GOP has not formed a messsage or a vision of how thier actions will build Minnesotas future, they ignor the fact that LGA is a backbone part of the uniform quality of life in Minnesota, and perhaps the most serious error of the Mn GOP is to placee a deputy GOP chair in the staff diretor role of Mn Senate. This type of control is not correct policy. Further they jumped on the social topics when budget was key. Now they have no vision, no plan, and no credibility.Some argue that they are worrying about constituent votes–lets forget that issue the next election will be after redistricing-new districts new voters. To all legislators it is time to discard pledges and focus on the future of Minnesota. The GOP had the edge going in and now they have given that away by missing the peoples interest and placing ideology ahead of good government. I have been a GOP leader in the past and remain a solid moderate progressive person with a focus that good government is first at all times and politics is secondary. Today the legislature particularly the GOP are operating with politics first and government last. In this mode there is no winner only losers at all levels. The GOP will and should have a very tough round with the voters in 2012 elections. Lets all hope that somehow the real Minnesota vision will reappear in the State Capitol in the next 30 days.

    Dave Broden
    Orono, Mn

  20. Submitted by Paul Udstrand on 06/10/2011 - 02:54 pm.

    Dave B.,

    When are thoughtful conservative going to take their party back? These ideologue extremists are going to tear the party apart and represent the greatest threat the Republican party has faced in 60 years.

  21. Submitted by Kenneth Kjer on 06/10/2011 - 04:22 pm.

    To Dave B. I totally agree with you. I blogged an open letter to Sen Benson and Rep Scott, the letter was emailed to them they never replied. http://hatchetcreek.blogspot.com/2011/06/open-letter-to-senator-m-menson-and-rep.html

  22. Submitted by Lora Jones on 06/10/2011 - 07:57 pm.

    @Dave B. I am the product of a mixed marriage. My father was a Republican; my mother a Democrat. My poor father was forced to abandon the Republican party, on the national level at least, when Reagan introduced Voodoo economics. I can only be grateful that he died before the worst of its damage was done. And although I gladly voted for Arne Carlson, I can’t think of a single GOPer I could vote for today. I strongly suspect that there’s a lot more like me here in Minnesota than there are true believers. Politics is not religion. Ideology does not produce good governance.

  23. Submitted by Paul Udstrand on 06/11/2011 - 09:10 am.

    I have to point out once again: During the great depression we raised income tax rates on he wealthiest Americans from 25% to 63%, and by 1952 that rate had been raised to 93%. We did this to pay off depression era and war debt, and finance a variety of nation building projects. This 100%+ tax increase did not cripple our economy, drive the wealthy to foreign shores, or destroy American innovation. On the contrary it spurred one of the largest and deepest economic expansions in US history. Since we started reducing those taxes in the 70s we’ve had economic contraction of the middle class accompanied by increased wealth disparity and eventual collapse of the financial structure. Whatever. The idea that a 4%-%5 income tax increase will harm our economy is simply idiotic. The idea that we should dismantle the government is idiotic.

  24. Submitted by Alan Davis on 06/14/2011 - 03:13 pm.

    I’m a true conservative. I expect our public servants to do just that: serve the public. How can the GOP serve the public if they put ideology above the people they serve? Dayton has met them halfway, despite the GOP’s attempt to argue otherwise. The reason they won’t compromise is because they’re putting extremist ideology – no new taxes – ahead of common sense.

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