Minnesota’s 2003 budget crisis a fascinating study in contrasts with today’s impasse

In December of 2003, an organization called the Center for Policy Alternatives named an Illinois fellow, Barack Obama, as the state legislator of the month.

The next month, that same organization named a Minnesotan, John Hottinger, as the nation’s legislator of the month.

These days, Hottinger tells people that the political paths of Obama and Hottinger seemed to take “divergent” paths after their respective honors.

Actutally, Hottinger’s political career had already started to slide when he was named legislator of the month. Shortly before he was honored, he was dumped as the DFL’s Senate majority leader.

His fellow caucus members, in an act of political cover, had decided to blame Hottinger for “caving in” to Gov. Tim Pawlenty during tense budget negotiations in the spring of 2003.

Hottinger didn’t actually cave. He, and other key members of the caucus, decided to put the welfare of state government ahead of their own self-interest.

2003 a sharp contrast to situation now
How Hottinger — and a handful of other DFLers — handled the budget crisis of 2003 is a clear example of what is NOT happening now as the state government moves ever-closer to a July 1 shutdown.

In some respects, he was in an easier position than current legislative leaders.

John Hottinger
MinnPost/Doug Grow
John Hottinger

That’s because Hottinger did not have to worry about party leaders stirring up the passions of extremists, as current Senate Majority Leader Amy Koch and House Speaker Kurt Zellers do. Also, Hottinger did not have to deal with large groups of inexperienced legislators.

And Hottinger and DFLers were dealing with a governor who was proclaiming “no new taxes,” not “no new revenues.”

But most importantly, Hottinger was willing to risk his own political well-being.

Go back to the big picture in 2003.

Minnesota was facing a $4.3 billion budget shortfall, which was created largely by the ill-advised decision by legislative DFLers and Republicans to cut taxes in 2002, when there was a surplus.

Pawlenty was in the governor’s office, DFLers controlled the Senate by just two seats, and Republicans, under Speaker Steve Sviggum had firm control of the House.

Hottinger, who had first been elected to the Senate from his Mankato district in 1990, was in his first — and what turned out to be last — year as Senate majority leader, replacing Roger Moe, who had run for governor and lost.

“It was a little like being the person called in to replace Michael Jordan,” recalled Hottinger.

Pawlenty had taken the “no new taxes” pledge on the eve of the Republican state convention in his bid to win conservative support in his endorsement battle with rival Brian Sullivan. And now, in his first year as governor, he was making it clear at every opportunity that a tax increase would not be part of fixing the budget problem.

But, Hottinger noted, Pawlenty did not rule out new revenues. Hottinger, in fact, says that fees under Pawlenty quickly shot up by more than $1 billion.

Today’s budget impasse more difficult
“They’re [current Republican leaders] are framing it as no new revenues, and that’s a much more difficult thing,” said Hottinger. “We didn’t have near the rhetoric going on at the time as they have now. And because of the fees, we had enough new revenues to cover some of the worst cuts they were proposing.”

In March 2003, DFLers put forward a budget proposal that did call for a fourth-income tax tier.

Two things to note about that proposed tax increase:

1. DFLers believed in it.

2. But DFLers, at least those such as Hottinger, didn’t believe it had any chance of winning Pawlenty’s support. It was, he said, difficult enough to sell it to the entire DFL caucus, which included some conservative members.

Hottinger and such leaders as former Sen. Steve Kelly and current Sen. Ann Rest ultimately did get the entire caucus to support the tax increase as a way to balance the budget.

Tim Pawlenty
MinnPost photo by Craig Lassig
Tim Pawlenty

But, at the time, this was seen as a strategic move: The public could see the DFL approach, as opposed to the Republican/Pawlenty approach. It was understood, Hottinger says now, that DFLers would not force a shutdown with their proposal.

“If you have a shutdown,” Hottinger said, “most of us are inconvenienced. But you quickly and badly hurt the people who already are voiceless.” And put thousands of state employees out of work.

A shutdown, then, was to be avoided at almost all costs in 2003, Hottinger said.

There’s a dramatically different feeling now among the Republican majorities in the House and Senate. Many of the most fiscally conservative members of the Legislature — especially the freshmen — believe a shutdown would show Minnesotans that there is too much government.

By mid-May 2003, it became abundantly clear to Hottinger and other DFL Senate leaders that their tax increase wasn’t doable.

On May 16, six days before the required close of the session, Hottinger told Pawlenty that the tax increase was off the table.

Most in the caucus had agreed this was the reasonable approach. By pulling back, DFLers still had six days of the session left to salvage what they could.

However, the pullback wasn’t universally accepted, particularly among some DFL senators and some of the advocates of organizations typically supported by DFLers.

“There were some activists and advocates who preferred going down in flames,” Hottinger said.

Party influence stronger now
But one huge difference between now and 2003 is the role of party.

Hottinger said that elected officials never had to be looking over their shoulders to see what the DFL Party leaders were doing.

Not so today for Republican legislative leaders. Party Chairman Tony Sutton and Deputy Chair Michael Brodkorb are making compromise extremely difficult for Zellers and Koch.

“They’re out their revving up the most extreme part of the constituency,” said Hottinger. “It very much works against your leaders if they’re trying to actually govern.”

Ultimately, it should be noted, he believes that the rhetoric from Sutton and, to a lesser extent, legislative leaders “will hurt them. I think they’re overplaying their hands. DFLers have been counting on Republicans overplaying their hands for years.”

In 2003, Pawlenty and the Legislature finished its business. Three DFL senators — Hottinger, Rest and James Metzen — volunteered to vote with the Republican minority in passing the Pawlenty budget.

“The rest [of the DFLers] had the chance to take cover,” he said.

Hottinger still says the DFL position was not intended to be a compromise. Rather, it was to be a position of contrast for Minnesotans to look at in future elections.

He noted that when business was concluded, he did not attend a post-session news conference with the governor, though he was invited. He had no desire to participate in the glad-handing that often follows these contentious debates.

Instead, at the conclusion of the session, DFLers immediately criss-crossed the state, pointing out the service differences between their budget proposal and the budget proposal that was enacted.

And in time, making those contrasts worked, as DFLers made gains in both the House and Senate in the ensuing elections, Hottinger said.

But it didn’t work out so well for Hottinger.

When the DFL senators caucused before the 2005 session, Hottinger was dumped and replaced by Dean Johnson as the majority leader.

“There were some [in the caucus] who blamed me, some who quietly thanked me,” said Hottinger. “It wasn’t the best time for me. But I took sort of a Buddhist approach to it. I just told myself, ‘This is the way it is.’ ”

Hottinger said he did inform the organization that had named him as legislator of the month that he’d been demoted for his work just a few weeks before winning the award.

“They told me if that was the case, then maybe I should be legislator of the month for February, too,” he said.

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 (2)

  1. Submitted by Jackson Cage on 06/08/2011 - 09:12 am.

    So really, both parties are exactly the same…cross The Party Line and you’re history. The difference is Hottinger had the fortitude to set aside his agenda and sacrifice himself for the good of the State. We’ll see if Koch and Zellers “man up”.

  2. Submitted by Lora Jones on 06/10/2011 - 08:15 pm.

    Sorry, Jackson, I don’t think “both parties are exactly the same” and if there’s anything to be learned from Hottinger’s example, it’s exactly that. He wasn’t chosen as leader — Carlson was purged. The six state senators that joined in the override were purged. Purging happens only in Cold War Russia and the current Republican party. See “Gingrich” in case you have any doubt.

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