Business leaders apparently talking to both sides in budget dispute, but more gently to GOP

We have seen state workers on the steps of the Capitol demanding that Republicans allow the rich to be taxed.

We have seen somber ministers at the Capitol saying the poor must be spared at the expense of the rich.

We have seen union leaders and DFLers and welfare advocates all gather at the Capitol in support of Gov. Mark Dayton.

And the shutdown goes on.

So when do the business leaders, in their pinstripe suits, pull up to the Capitol? And would they even be interested in telling Republican legislative leaders to give just a little to end the shutdown?

Business leaders apparently already have been meeting with both the governor and legislative leaders. (Unlike welfare groups and preachers, business leaders don’t have to stand on the front steps of the Capitol to get the attention of the pols.)

The business leaders even have been telling both sides they’ve had more than enough of this stalemate. But it sounds like they talk more gently to the Republicans than to DFLers.

“We’re hearing from our members that they want this resolved,” said Tom Hesse, a vice president with the Minnesota Chamber of Commerce.

BUT …

“We’re also hearing that they want this resolved without tax increases,” Hesse adds.

Two-step conversations with GOP
Charlie Weaver, who heads the Minnesota Business Partnership, an organization of the state’s largest companies, says pretty much the same thing as Hesse.

Charlie Weaver
Charlie Weaver

“We’re having a two-step conversation [with the Republican leadership],” Weaver said. “One, we’re saying thank you for the stands you’ve taken. From our view, the two most important issues are taxes and real education reform.”

Before more about that response, what’s the second part of the Partnership’s two-part conversation with Republicans?

“We think you need to get this done,” said Weaver of Part 2 of the conversations CEOs are delivering to political leaders.

Given the fact that it’s proving hard to get resolution without new revenue, it doesn’t sound like Minnesota corporate types are exactly bringing new and creative ideas to the table.

But perhaps there’s more.

Weaver believes this mess will be resolved by Aug. 1 — and that business leaders will help mediate a conclusion that will allow both sides to declare at least a small win, if not a total victory.

Start with this. The chamber’s Hesse, whose organization tends to represent smaller organizations and businesses than the Business Partnership, either is holding his cards closer to his vest, or doesn’t feel the need to reach resolution that the Partnership feels.

Hesse said he and other Chamber officials are in constant contact with Main Street businesses across Minnesota. And for the most part, “most business are not being impacted [by the shutdown] or the impact is relatively minor,” Hesse said.

Weaver sings a slightly different tune.

The CEOs of the state’s largest corporations say the shutdown is “impacting the Minnesota brand.”

Because the Minnesota shutdown so neatly compares with the national budget battle, Minnesota suddenly is getting a great deal of national—even international — attention, Weaver said.

Business Partnership members, though, say this negative attention is “embarrassing,” according to Weaver and is putting a huge hole in one of the state’s strengths in attracting the best and the brightest to come to Minnesota.

That strength always has been that Minnesota is “the state that works.” Weaver went on to extol the state’s virtues: It’s a great place to live, he said, because of its great parks, arts venues and schools.

But don’t those things exist because, in the past, people weren’t so angry about paying taxes?

“In some cases that’s true,” said Weaver of Minnesota’s progressive history. “But I think if you talk to people from places like the Guthrie and the Walker, they’d tell you our corporations have a history of generosity as well. Our companies have the highest level of United Way giving in the country.”

The point, he said, is that the state’s corporations have paid high taxes — and been generous.

He also made it clear that from what he’s hearing, Business Partnership members “don’t want Republicans” to fold on their no-new-taxes position.

A way out?
But, he said, he believes, there’s a way out of this for both sides.

Weaver, a former Republican legislator and onetime chief of staff for Gov. Tim Pawlenty, believes that even though a $34 billion budget “should be enough,” he believes there are ways to boost the budget to around $35 billion without a tax increase. He didn’t indicate, though, where that $1 billion would come from.

That higher budget would give both sides their precious political victory, according to Weaver.

Dayton would have an extra $1 billion to fund the programs most near and dear to his heart.

Republicans would have held the line on taxes and created education reform. Those two areas, Weaver repeatedly said, matter most to CEOs.

This part on education seems contradictory. Weaver says that he is being told by Minnesota executives that the state is losing its ability to brag about its unique, educated workforce.

“We’re worried about our workforce competing in the global economy,” he said.

But wouldn’t that indicate that the state needs to do more to support public education?

“As a country, we spend more than any other country in the world on education — and the results are bad,” Weaver said.

Then, he touted the “reforms” he says Republicans have pushed in Minnesota this year: more assessment of teachers, reducing the power of seniority in the education system; grading the effectiveness of principals and offering scholarshipsto kids who want out of schools that are judge to be “failing.”

“Some of the leading reforms in the nation,” he said.

Weaver said he had a meeting with House Speaker Kurt Zellers on Monday. Among other things, he apparently was stressing the victories Republicans can claim while coming up with some revenue for Dayton.

When labor and business talk …
He also had a recent lunch with Eliot Seide, executive director of Council 5 of AFSCME, the first union to come out in support of Dayton. (Seide and his union have had several rallies at the Capitol, supporting Dayton’s “tax the rich” concept.)

A Weaver-Seide conversation goes like this, according to Weaver:

Seide: “Charlie, you know the rich can pay more taxes.”

Weaver: “Anyone can pay more. That’s not what this is about. It really isn’t about taxes. It’s about spending. The spending levels are unsustainable.”

At that point, Seide and Weaver apparently try to change the subject and figure out how the mess can be resolved.

Although Weaver, the lifelong Republican, insists that it’s the DFL that “wanted” the shutdown, he agrees that now both sides have plenty of shutdown material for future political brochures.

That means both sides can resolve the issues.

There are, according to Weaver, reasons for optimism:

1. There is “a rising tide” of people being affected by the shutdown. Weaver noted that as of Aug. 1, a number of taverns and restaurants will go out of business because they are not able to renew their licenses to buy liquor. Other business, such as car dealers, are running into more difficulties because of the shutdown. Legislators of both parties will be hearing from more and more constituents as the “tide rises.”

2. Dayton, Senate Majority Leader Amy Koch and Zellers have remained respectful of one another.

“There are pathways to get this done,” Weaver said.

Most of those paths on Weaver’s map appear to veer to the right of center.

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

Comments (29)

  1. Submitted by Tim Walker on 07/13/2011 - 09:52 am.

    The only “reforms” GOPers have proposed for education is budget-cutting and union-busting.

  2. Submitted by Paul Crawford on 07/13/2011 - 10:48 am.

    Education funding went down during Pawlenty by $1300/per pupil, adjusted for inflation. Meanwhile, the cost of education is going up due, in large part, to healthcare costs. What is the GOP stance on solving skyrocketing healthcare costs? Repeal Obamacare, which saves $143 Billion over the first decade and $1.2 Trillion over the next decade.

    I don’t really consider Weaver and Hesse “business leaders” either, we know where their organizations will always stand. Let’s be realistic, would they ever consider supporting a tax increase on themselves for the benefit of society?

  3. Submitted by Greg Kapphahn on 07/13/2011 - 11:01 am.

    Clearly Mr. Weaver, himself is NOT among the best and brightest our state has to offer.
    The “Minnesota Business Partnership” idea of the “best and brightest,” as demonstrated by their own attitudes and actions, is pathetically lacking in its perspective.

    Where are the Minnesota business leaders of yore who believed in and supported the citizens of their state; who believed in providing their employees with well-paying jobs with generous benefits, and paying the high income taxes required to provide the multiple infrastructures and higher education institutions needed to provide them with the high-quality employees they SO REQUIRE to compete on an international scale?

    Although the wealthiest business leaders in Minnesota may muse about how badly the “Minnesota Brand” is being hurt by this shutdown, they are ignoring that their own attitudes and actions have tarnished the very idea of “business” itself so that the vast majority of people now believe (largely correctly) that

    “business” people can be expected to be stubborn, cheap, chiseling, flim-flam men (and women), who are in business not to provide excellent goods and services to the public and other businesses at reasonable prices while providing themselves with a comfortable living,

    but only in order to cheat the public with shoddy goods, by polluting their environment and avoiding paying taxes sufficient to provide for the services they require, and who cheat their employees out of decent pay and benefits in order to pad their own pockets so that, while their employees live in poverty (or close to it) they, themselves, live like the lords and ladies; the kings and queens of old.

    Because of the selfish and self-serving ideas and ideals that clearly underlie so much of what the Minnesota Business Partnership stands for,…

    the general public now expects the behavior of “business” leaders to be little better than the fly-by-night itinerant asphalt contractors that promise to repave their unsuspecting customers’ driveways and, after collecting their money skip town leaving behind little more than a thin coat of black paint (if that).

    These “business leaders” have done this to themselves. Perhaps they might want to demonstrate a different approach to paying their fair share of taxes, to polluting the environment, and to taking care of their employees because the citizens of the state have had ABOUT ENOUGH of their selfish, destructive, and (ultimately) self-destructive ways.

  4. Submitted by dan buechler on 07/13/2011 - 11:47 am.

    I was almost ready to flag this article’s words as demeaning. Using words like precious and near and dear do not elevate the conversation/understanding. From my context having watched some of the floor fights over HHS this shutdown is about MN Care and the long term viability of state child health insurance programs. Visit the southern alliance for health care in Minnesota or visit those in the arrowhead or the Northwest, Since some people’s children are viewed as unworthy of full health care (no low vouches) Maybe we could open a satanic mill for these kids to work for their coverage, I’ve heard their nimble fingers and sharp eyes are excellent for picking out copper specks in the mercury laden tailing piles.

  5. Submitted by Neal Rovick on 07/13/2011 - 11:51 am.

    …our corporations have a history of generosity…

    Total charitable giving in the US by corporations in 2010?

    $15.3 billion in the entire US (only 5% of all charitable giving).

    And that includes in-kind giving, not cash.

    http://www.nps.gov/partnerships/fundraising_individuals_statistics.htm

    Total local, state and federal spending was $5.8 trillion dollars in 2010.

    $15.3 billion is “rounding error” in $5.8 trillion and not a real funding source for the needs of citizens.

  6. Submitted by Solly Johnson on 07/13/2011 - 12:13 pm.

    #1-Very true. Often people critical of public education hold up Finland, South Korea, and other Asian nations as having outstanding systems; however, they never mention that all of these nations are socialist democracies.

  7. Submitted by Bill Coleman on 07/13/2011 - 12:17 pm.

    Weaver’s statement about the MN brand is correct. I was at an economic development conference and their was much discussion of the MN situation. It appears to others that Minnesota is increasingly crazy.

    No matter what you think of our politicians, from the outsider perspective, this is the new MN brand…

    Ventura
    Bachmann
    state shutdown
    Franken
    Bachmann
    35W bridge collapse
    Metrodome collapse
    Bachmann
    State shutdown

    Luckily for us, few people outside Minnesota know about the Stillwater Bridge dysfunction or who Tim Pawlenty is.

  8. Submitted by RB Holbrook on 07/13/2011 - 12:42 pm.

    “Weaver . . . believes there are ways to boost the budget to around $35 billion without a tax increase. He didn’t indicate, though, where that $1 billion would come from.”

    In other words, no one with a lick of sense has any reason to take what Mr. Weaver says seriously.

  9. Submitted by Dean Ryan on 07/13/2011 - 01:12 pm.

    I don’t think business leaders care one bit about the working people of Minnesota. This article features a man that was part of the Pawlenty fiasco and now the working men and women of Minnesota have to pay up for their mistakes. Why would we trust him six months later? The only thing Mr. Weaver wants to do is line his own pockets.

    How can we ever trust the conservative parties view ever again?

  10. Submitted by Michael Ahlf on 07/13/2011 - 01:40 pm.

    Charlie weaver, a guy that was born on third base, basically telling everyone that his people are upset at the idea of paying more money for decent government services. His father a successful and well regarded politician, a former politician himself and a pal of Tim Pawlenty seems to not have a concern about folks still trying to reach first base. It’s all about how much his insulated circle of friends can hold back from taxation. Of course corporations are large supporters of arts and culture-they have the lions share of the money! There are countless working stiff individuals giving a greater share of their income to charities than corporations would ever consider ‘giving away’. We are in this political mud because characters with access like Mr. Weaver have outsized influence. Let them eat cake!

  11. Submitted by Lyn Crosby on 07/13/2011 - 01:43 pm.

    Tim (#1, you’re not quite correct. The other “reforms” the Repubs have proposed (all in the spirit of getting the budget settled, no less) deal with restrictions on abortiona and gay rights.

  12. Submitted by Bernice Vetsch on 07/13/2011 - 02:36 pm.

    I think it’s important to differentiate between local and state chapters of the Chamber of Commerce. The National Chamber walks hand in hand with the Koch Brothers and Grover Norquist. Everything it does is designed to improve corporate profits and to keep right-wingers in office to help in that quest.

    Local Chambers include the small-town druggist and farm implement dealer, the bakery or restaurant or dress shop owner in a medium-sized county seat or the manufacturer of a consumer good who employs fewer than a hundred people.

    These people don’t live from quarter to quarter with profit-seeking shareholders in mind, but are members of their communities who, with their neighbors, care about schools and clean water and transit and all the aspects of the common good. Some may even be liberals.

  13. Submitted by Ralf Wyman on 07/13/2011 - 02:53 pm.

    Here is where democracy is failing us at it’s core: “Unlike welfare groups and preachers, business leaders don’t have to stand on the front steps of the Capitol to get the attention of the pols.”

    Yep. Business gets frequent, cushy, private meetings with legislators. Average citizens get maybe one shot per year for 30 seconds in a room with 15 or 20 neighbors in a lobby day event. If that.

    Otherwise, they’re on the street, seeking redress through the only means that doesn’t have, well, means.

    The extent to which business people, and by that I mean the top 2% rich business people, not the owner of a bar or a barbershop, get access and influence is corrupting our national and local values terribly.

  14. Submitted by Richard Schulze on 07/13/2011 - 03:03 pm.

    The middle class do not want to give up their mortgage interest deduction or pay tax on their employer paid healthcare benefits. They would rather “tax the rich”.

    The rich feel that they pay enough. They also feel that they also pay for those that don’t pay any tax at all.

    And the business community they like to see good schools and good infrastructure but want more “value” from their tax dollars.

    How about let’s have everyone share in the process. Tax consumption instead of income.

    Expand and lower the sales tax to include more items and services.

  15. Submitted by Alec Timmerman on 07/13/2011 - 03:32 pm.

    Consumption tax is completely regressive as percentage of income. You think our taxes are unfair now, wait until we put it all on consumption.

  16. Submitted by Paul Udstrand on 07/13/2011 - 04:53 pm.

    I’m still waiting for these business boys to explain how recessions and decaying infrastructure are good for business… because that’s what Republican economics and politics bring us. These boys have become extensions of the Republican party, and they can now reap the rewards of paralysis and decay.

  17. Submitted by dan buechler on 07/13/2011 - 06:28 pm.

    #14 and #15 you are probably both right to some degree. Usually there would be some kind of circuit breaker attached for those of very low income…yet Richard if you are talking about a sumptuary tax on my $6 12pack of beer it does favor the bourbon drinkers of the world as such taxes are not usually levied in relation to the final cost of the product with the result that the tax on high end alcohol is a smaller % of the consumer’s cost.. Bubba Clinton gave us beerheads a brief break (you can look it up).

  18. Submitted by Lance Groth on 07/13/2011 - 06:33 pm.

    The budget can be boosted by $1 billion without increasing taxes? How? Sounds like more of that favorite repub game: Kick the Can (down the road).

    Sorry, we’ve had enough of that. We’re in the mess we’re in because that’s all Pawlenty did.

    Oh, and having to raise property taxes to compensate for state level inaction still counts as a tax increase to most folks.

  19. Submitted by Richard Schulze on 07/13/2011 - 07:32 pm.

    Tax systems that rely on taxing the income of very high earners leads to lots of volatility and instability. Because the income of high earners tend to fluctuate a great deal from year to year. This type of system is not going to be very stable in the long run.

    The sales tax is regressive, taking more out of the pockets of the poor. This is probably the strongest argument against it. Since the poor consume a higher percentage of their income than the well-to-do, they are necessarily going to pay more than the well to do. There just isn’t any getting around that fact, and it is something that would have to be addressed if we were to broaden our tax base.

    That said, one important benefit of lowering and broadening the sales tax insofar as those with low incomes is concerned is that they would be contributing something to the general cost of government.

    But as it is, 47% of those filing federal income tax returns have either a zero or negative tax liability; that is, they pay nothing but still get a tax “refund.”

    When this fact is brought up, progressives always point to all the payroll taxes low-income workers pay. But they never note that the negative income tax liability many of them have comes from something called the Earned Income Tax Credit, which was established precisely for the purpose of indirectly offsetting the payroll tax for such people. Furthermore, the payroll tax does not support the government’s general operations; it funds specific benefit programs, Social Security and Medicare, from which the vast majority of beneficiaries get back far more than they ever pay in.

    The odd thing is that conservatives are the ones most likely to complain that the poor aren’t pulling their weight, yet they fail to see that a consumption/sales tax is probably the only way of getting them to help finance the general cost of government. It’s extremely unrealistic to think we are ever going to impose income taxes on very many of those now paying nothing.

  20. Submitted by will lynott on 07/13/2011 - 08:53 pm.

    Sorry, Charlie. You lost me at “The spending levels are unsustainable.” That’s crap and everybody knows it, including you.

    Sounds like he is worried, however.

  21. Submitted by Nancy Gertner on 07/14/2011 - 07:20 am.

    How to generate an extra Billion for the state. An interesting dilemma. If my math is correct, that means 5 million Minnesotans need to provide $200 each to get the Billion. I’m not going to buy a single pack of cigarettes, so that means if 20 percent of Minnesotans are smokers, they each need to pay $1K in a cigarette “Sin” tax annually to come up with this extra Billion in revenue.

    To raise this via sales tax, looks like I would have to buy an extra $2857 in taxable good and services to pay an additional $200 / annually in sales tax.

    I’m thinking the effect of expanding the sales tax might be to reduce the demand for the goods and services. If I have to pay tax on clothes and shoes, I might cut back on my buying of those items, or buy them via Internet, or during my vacation in another state. I don’t have growing children, so I could probably pretty easily go a year without buying clothes or shoes in MN. Would that put anyone out of work?

  22. Submitted by Lynn Wehrman on 07/14/2011 - 07:51 am.

    Mr. Weaver is just another person who can’t conceive of life without his lake cabin and investment accounts. Having been married into a wealthy and affluent GOP family in my young adult life, I understand this mentality.

    I ask, Mr. Weaver, and the many conservatives who are capable of “financing their own sense of reality,” while affecting the well-being of countless other people whom they will never meet, to attempt to walk away from their bank accounts and assets for a year–just as George Orwell did prior to writing “Down and Out in Paris and London.” Walk the talk and a mile in the shoes of those whose lives you control, and I’ll listen to anything you have to say.

  23. Submitted by Paul Udstrand on 07/14/2011 - 08:51 am.

    Once interesting thing about this shutdown is that it bringing the nature of this class warfare against the middle and lower class more clearly into focus. We can’t help but finance stadiums for billionaires but spending on actual government services is unsustainable… even though the wealthy are paying the lowest tax rates in 60 years.

  24. Submitted by Tim Walker on 07/14/2011 - 09:12 am.

    Richard (#19) wrote: “Tax systems that rely on taxing the income of very high earners leads to lots of volatility and instability. Because the income of high earners tend to fluctuate a great deal from year to year.”

    So?

    Tax rates and formulae can be adjusted.

    After all, the MN Legislature meets every year, you know. Maybe assigning them the task of studying the revenue stream from high-income folks and adjusting tax rates accordingly would keep them from other mischief.

    And of course, as Nancy (#21) pointed out, taxing consumables is also very volatile. Using your reasoning, we shouldn’t collect more taxes that way either, right?

    Right?

  25. Submitted by Andrew Kearney on 07/14/2011 - 10:01 am.

    Weaver and his friends are reaping the harvest they have sown. I am surprised that they do not see the overreaching that businesses have done with their rhetoric and their politics. They need to accept major responsibility for the damage being done to the Minnesota brand through their support of far right wing politics.

  26. Submitted by dan buechler on 07/14/2011 - 10:09 am.

    #22 I agree journalists seem to always refer to income. There’s rich and then there is wealthy i.e. collect interest and rent payments on land, buildings or dwellings.

  27. Submitted by Andrew Kearney on 07/14/2011 - 10:23 am.

    Charlie Weaver and others have constructed a belief system about education that is not based on reality only on data that is used and manipulated to support ‘beliefs.’

    An example is in his words to Doug above: “As a country, we spend more than any other country in the world on education — and the results are bad”

    The reason we pay more for education is that we are the only nation now or ever that educates all disabled kids… at great cost. We also do this in a way using good Republican/conservative principles that vest all control and spending decisions in parents of disabled students. Schools must ‘go to court’ to defend against any hard pressed wish of any parent. Instead they usually give in and so we have the expensive system we have now.

    To keep this system going Republicans with children who are disabled fund the PACER Center with a ritzy gala every year. PACER’s mission is to provide support to parents in making demands of every type on their local schools.

  28. Submitted by Richard Schulze on 07/14/2011 - 11:59 am.

    No one wants to pony up. I believe it needs to be a shared responsibility.

    It’s all moot anyway Dayton just caved. He’s kicking it down the road….

    More borrowing, more shifting and leveraging the tobacco monies. Why does this solution sound sooo familiar?

    Pawlenty 2.0

  29. Submitted by dan buechler on 07/14/2011 - 04:49 pm.

    I am also somewhat dismayed by today’s probable outcome esp. for the 70K people who may lose MN care and get inadequate vouchers. And no I am not a user or a service provider but why in these states when my daughter breaks her arm one of my first thoughts are how much is it gonna cost? Yeah we are insured by drawing down our savings (for we have a higher deductible insurance plan) Many of those voting for the Republicans will probably see their health insurance plans dissolve when they are 50 and corporate America doesn’t need their labour anymore. See the latest G Ballard’s book about the drones and slaves who work in our office parks and are easily disposed of.

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