The GOP swept into control of the Legislature in 2010, carried by a wave of new fiscal hardliners determined to beat back spending in St. Paul.
Their session-long chant: “No New Taxes!” — with “No New Revenues!” peppered in less frequently.
But budget offers between Gov. Mark Dayton and the GOP legislative leaders that were revealed after Minnesota’s government shut down show that Republican lawmakers did offer some forms of new revenue.
That’s despite the opposition of a loosely affiliated Republican group of about 30 House members and a handful of senators, many of them freshmen or short-termers.
They’re members of the “Not a penny more” group that this legislative session has argued that $34 billion — the number Minnesota is projected to take in — should be plenty of state spending for the next two years.
Penny pins and posters
They’ve hung posters on their office doors depicting a canvas sack stuffed with money that says, “$34 billion.” The poster reads, “Not a penny more,” as a hand reaches toward the sack with one final cent. It’s those pennies that the members wear as pins on their lapels.
The GOP leadership has had trouble convincing the group to accept even a $34 billion budget, the better-than-expected February budget forecast for the biennium. Dayton is seeking a budget that’s at least $1 billion higher than that level.
“It’s a strong commitment among members who are saying we have already moved from just over $32 billion in the current biennium to a proposal that spends everything we have, and that’s the compromise position,” Rep. Steve Drazkowski, a third-term member who started the coalition, told Politics in Minnesota in May. “We were sent here to stop the growth and excesses of government. And to spend everything you have coming in, that’s enough. It’s a theme that very accurately weaves our caucus together.”
But in the hours preceding the state government shutdown, before budget negotiations had dissolved, the GOP floated an offer. Republican leaders proposed to further shift funding from K-12 education by 10 percent and issue bonds for tobacco settlement money that Minnesota receives each year.
In exchange, they wanted a host of policy provisions included in their vetoed omnibus budget bills and temporary “lights-on” funding for state services to prevent a shutdown. That proposal put human cloning provisions, defunding state aid for abortions, and voter ID back on the table.
Rep. Mary Kiffmeyer, a key proponent of voter ID, would have gotten her legislation as part of a package of Republican policy.
Obviously, the deal didn’t happen. Dayton rejected a last-minute tobacco plan, and the GOP wouldn’t consider the governor’s pared-down income tax proposal for individuals earning more than $1 million annually.
“You can’t throw a dart in the House” without finding a member of the group, freshman Rep. Mike Benson said.
What constitutes new revenue?
So where were the firebrands from the “not a penny more” coalition during these proposals? And, perhaps more importantly, does issuing bonds backed by future tobacco payments count as new revenue so spending can be increased?
To Benson, a “not a penny more” member from Rochester, it doesn’t.
“I don’t see this as an increase in taxes for revenue,” he said. “This is an acceleration of a payment that’s always guaranteed.”
Benson, who would have voted for the proposal, called bonding tobacco money a “shorthand, long-term gain for the state.” Along with negotiations to spend the money ahead of schedule, lawmakers debated ending the medical provider tax, Benson said, which would have been great for his community.
The goal was to “come to an agreement in a crisis budget situation without raising taxes,” said Rep. Doug Wardlow, a newcomer from Eagan.
Wardlow said the tobacco proposal, previously floated by former Gov. Tim Pawlenty and derided by former House Minority Leader Marty Seifert, draws on a continuous source of state revenue. “We just moved it up. That’s all.”
Kiffmeyer, a second-term member of the penny pinchers, took a more political approach to explaining the situation. She backed off any support of frontloading the tobacco settlement money, and instead said offering the proposal to Dayton was a “tactic” to see where the governor was “dug in at.”
“Is it just [that] Gov. Dayton wants new revenue to increase spending?” she asked.
By all accounts, there was hope Thursday afternoon that a deal could be struck. Both sides blamed the other after talks broke off.
Dayton “demonstrated a complete unwillingness to negotiate in good faith,” Wardlow said. It seems unlikely the GOP would offer an “alternative revenue stream,” as he calls it, without also agreeing to increased spending.
“For those strict constructionists — ‘not a penny more’ — [the tobacco deal] clearly goes against what they’ve been arguing,” said David Schultz, a public policy expert and occasional MinnPost contributor. “It looks like increased spending to me.”
When asked specifically how using bonds for the tobacco money to increase state spending wasn’t a violation of his group’s principles,Wardlow had nothing to say. “Oh, I’ve got to run,” he muttered. “I’ve got some work here.”
In meeting with their constituents over the Fourth of July, lawmakers had to defend the positions and convictions that helped drive the state to a shutdown. They could’ve used a deal last week.
“Might we have taken something like that?” Kiffmeyer said. “I don’t know. “I think it was worth a try.”