Gov. Mark Dayton had to disappoint some of his strongest political supporters to come up with the deal Thursday that will end Minnesota’s government shutdown.
Supporters urged Dayton not to move away from the “tax the rich” slogan that had carried him into the governor’s office.
“People will say you caved in,” allies of the governor told Dayton.
Dayton, according to sources, had a singular answer to all those who wanted him to hold the line: “I don’t care what people say — we’ve got to get government working again.”
And so on Thursday morning Dayton, after a 14-day state government shutdown, unveiled his offer in a two-page letter to Republican legislative leaders.
Late Thursday afternoon, following a meeting that lasted for more than three hours, Republican legislative leaders and the governor came out of Dayton’s office saying they had a deal.
But neither Dayton, nor House Speaker Kurt Zellers nor Senate Majority Leader Amy Koch looked triumphant.
In fact, Koch looked a little angry. Zellers was quiet and wore a look of disappointment on his face. Dayton, as always, was subdued.
Little joy, despite a settlement
There was good reason for the lack of joy on the faces of the major players. Critics from across the political spectrum were using that phrase that’s been around Minnesota politics for years to describe the deal:
Facing a budget problem, the principals agreed to “kick the can down the road.”
Dayton will get new revenue that would raise the budget to about $35.3 billion, which he said will be enough to “protect critical services.’’ But he’s getting the agreement in one-time money.
Republicans get to walk away saying there are no tax increases in the deal. But they did budge from their original bottom line.
Now, both sides have a whole lot of selling to do. Zellers and Koch must sell Republican caucus members, and Dayton must get a significant number of DFL legislators to sign on to a deal that most say they oppose.
Even as the day was evolving, criticism of the deal was pouring in from Dayton’s base.
The president of the union SEIU, Julie Schnell, issued a statement even before the political leaders announced their agreement.
“The only compromise this achieves is the compromising of our state’s working families,” Schnell said in a statement.
Other union leaders, usually so quick to praise Dayton, were silent as the day went on.
Details of the settlement must still be ironed out before Dayton calls a special session. But he and the legislative leaders promised to work “around the clock” to do that.
Dayton’s critics say the governor could have had this deal on June 30. Indeed, Republicans did offer the revenue sources — actually, borrowing — that is the financial basis of the deal in the last hours of negotiations on June 30.
In his settlement offer, Dayton wants $700 million from K-12 school shifts and another $700 million from revenues received for selling bonds based on tobacco settlement money that comes into the general fund each year.
Dayton got something for ‘waiting’
But Dayton did extract things from Republicans that they hadn’t been willing to yield at shutdown time.
The Republican “policy issues’’ that run throughout the Republican budget bills will disappear. Those include such things as a law requiring photo ID, restrictions on stem-cell research, new restrictions on abortion and proposed curtailment of school funding for purposes of integration.
Republicans also will have to give up their language that would require a 15 percent reduction in the state workforce.
Dayton will get a $500 million bonding bill, which has been opposed by Republicans from the beginning of the session.
“They will present this as mostly their proposal,” said Sen. Ron Latz, DFL-St. Louis Park, of the Republicans. “But that’s not true. There are major caveats they have to give up on.”
Ultimately, this deal is one with no real winners.
Republican hardliners will say their side “caved in” on their “not a penny more” than their $34.2 billion bottom line.
DFLers will be displeased for a variety of reasons.
“The hesitation you’ll find on my part, and I believe many others, is that it kicks the can down the road,” said Latz. “The budget problem we’ll face in the next biennium will be $1.4 billion worse.’’
Rep. Mindy Greiling, DFL-Roseville, was using much stronger language to describe her view of the governor’s proposal.
“I don’t call it compromise,” she said, “I call it capitulation.”
But she also was quick to offer words of praise for Dayton.
“I think he thought there wasn’t a prayer for compromise,” she said, calling current Republicans “dogmatic and intractable.”
School funding shift irks many
Greiling was especially upset by the school shifts, which she said that might take 50 years to repay.
But Republicans shared in the concern about the shift.
Sen. Dave Senjem, R-Rochester, said the shift would be the hardest thing for many in his caucus to swallow.
Rep. King Banaian, R-St. Cloud, also cited the shift as an area of great concern, especially since the shift and tobacco money is one-time funding, meaning a fundamental problem with the budget has merely been pushed forward.
Others agreed with concerns about the deal Dayton held out.
Former Gov. Arne Carlson, who helped to form a “third way committee,’’ bemoaned on Minnesota Public Radio that this settlement offer does nothing to make Minnesota’s future financial picture more stable. (The work of that “third way committee’’ was quickly rejected by both the governor and Republicans.)
The seldom-heard Independence Party even chimed in on this deal. The party’s new chairman, Mark Jenkins, denounced the deal, saying it just continues to leave Minnesota government on the same unsteady budget path it’s been on for years.
Jenkins said he and Tom Horner, the IP’s gubernatorial nominee from last November, will hold a news conference at the Capitol Friday.
No one understands the problem with this proposed settlement more than Dayton. He was holding his nose on the deal even as he wrote the letter to Zellers and Koch. In that letter, by the way, he called the deal “your plan,” meaning the Republican plan.
“However, despite my serious reservations about your plan, I have concluded that continuing the state government shutdown would be even more destructive for too many Minnesotans. Therefore, I am willing to agree to something I do not agree with — your proposal — in order to spare our citizens and our state from further damage.”
Understand, that concern about what might happen to some unfortunate Minnesotans because of the shutdown is genuine. To Dayton, this was never a game about who could hold their breath the longest.
On the night of the shutdown, Ken Martin, the chairman of the DFL, said he was concerned for the governor “because the shutdown will cause him such pain. He truly fears somebody will die because they did not get a service they need.”
Since then, others have noticed how the shutdown was troubling the governor.
“I have received calls from members of the press who have been trying to get me to say that the governor is giving away too much,” said Rep. Alice Hausman, DFL-St. Paul. “I support him because you just look at him and you can see that no one feels the shutdown more than he does. He knows he’s one of three people who can end this and that the other two [Koch and Zellers] will not do anything. He knows this shutdown is hurting people.
“I think there will be confusion and disappointment among some of his supporters,” Hausman continued. “They were so appreciative of the clear way he was standing for their principles. But the way I see it, he had to make something happen because they weren’t going to. I have told everyone, I have nothing but compassion for the governor.”
No doubt, this offer he doesn’t like did come from his fundamental beliefs that too many were being hurt by the shutdown.
Smart politics?
But the offer isn’t just about Dayton’s heart. It’s also smart politics.
The governor understands that most Minnesotans simply expect their governor and their legislators to get their fundamental job done. Most Minnesotans are nonpartisan in their disgust of the shutdown.
This offer put Republicans in a very tight corner. To reject this deal would have been the final piece of evidence showing the utter inability of Republicans to compromise, even in a clearly divided government.
Throughout the day, there were Republicans bemoaning aspects of the deal, or even the idea that the governor should get any credit for even coming forward with a deal to end the stalemate that’s affected everything from road repair to tourism to beer sales.
Sen. Dave Thompson, R-Lakeville, tweeted: “Let’s be clear. Governor did NOT accept the June 30 offer. He has simply attached new conditions to the June 30 framework.”
The last thing a fed-up public wants to hear, however, is that sort of braying.
With a little laugh, Banaian said the great political/economic lesson out of this is that you can’t mess with people’s alcohol.
He noted that the proposal comes at the point when it appeared that popular brands of beer were going to be removed from the shelves of state liquor stores. As a professor at St. Cloud State University, Banaian said he teaches courses in the economics of the old Soviet Union.
“Even in the Soviet Union, there was one thing political leaders could not do,” said Banaian. “If you dared touch the state’s price support of vodka, you were in big trouble.”
The key now will be if cool heads in the House and Senate can prevail.
And the key player in all of this may turn out to be Sen. Amy Koch, the Senate majority leader.
Koch’s on the spot for two reasons. First, her caucus contains more of the young, extreme firebrands. Second, although Koch doesn’t always sound extreme, many of her Senate colleagues say she’s a true believer in the most conservative ideology of the party.
Can she — is she willing to? — lead the caucus to drop the social agenda? Can she — is she willing to? — accept a large bonding bill?
Understand, this deal is going to require the caucus leaders of both parties to take their members where they don’t necessarily want to go.
Rep. Paul Thissen, the House minority leader, has been clear in his support of the Dayton plan. Early in the day, he called the governor “a statesman.”
According to a caucus member, in a phone conference with the DFL House caucus, Thissen said he was talking to caucus members but wasn’t going to pressure fellow members.
GOP may have to carry the load
It is, DFLers in both the House and Senate believe, Republicans who will have to do the heavy lifting in getting a deal done.
Even as Republican leaders met with Dayton this afternoon, the proposal was giving voice to some of the few remaining moderates in the party.
Like Rep. Larry Howes, R-Walker, Senjem, on Wednesday, had a one-on-one lunch meeting with Dayton. (Like Howes, who lunched with Dayton on Tuesday and ended up paying for the grilled cheese sandwiches, Senjem paid for the cheeseburgers and fruit he and the governor had for lunch on Thursday.)
The two talked over the basic framework of a plan that Dayton proposed.
“The devil’s always in the details,” said Senjem, who was the Senate minority leader before being dumped in favor of Koch. “But this seems like a pretty positive initiative.”
Senjem was hopeful of trying to sell racinos to members of his caucus as a trade-off for some of the school shifting in the proposal.
In his proposal, Dayton left open the door for Republicans to come up with forms of revenue more reasonable than the patchwork budget’s borrowing fixes from school and tobacco money.
Wrote Dayton:
“I urge the members of both of your caucuses to consider carefully the advisability of supporting alternative sources of revenue, which would provide better, long term financial stability for Minnesota than the two sources in your offer. If so, we could certainly discuss a substitution.”
It’s unclear whether such substitutions still would be viable.
As he addressed the media, Dayton, the man who once had stated “tax the rich” with such clarity, let it be known that his idea of creating more revenue with what he considers a more progressive income tax didn’t end Thursday.
“I have three and a half years left on my term to make my case to the people of Minnesota,” he said.
Here’s a suggestion for raising funds. Allow all property owners in Minnesota the opportunity to buy the mineral rights to their property. The resulting revenue could either go into the state’s general fund or directly to the county in which the property is located.
Gov. Dayton: “I have three and a half years left on my term to make my case to the people of Minnesota.”
Governor, please spend a hell of a lot of that time telling middle- and lower-class Minnesotans that the reason their property taxes shot up — again — was because the GOPers refused to tax millionaires and billionaires to bring needed revenues into the state coffers, thus forcing cities and counties to raise property tax rates.
I empathize with Gov. Dayton. The GOPers put him in a terrible place.
I hope that next year’s elections — a presidential election year — bring out more Dems to the polls than showed up in 2010. It’s that apathy in 2010 that let the GOPers capture both houses of the state Legislature.
I hope those tight races that went the GOP way in 2010 swing to the Democrats next year. The long-term future of our state depends on it.
It’s an ‘Emmer lite” budget.
Thanks for the excellent article. One can see how focused and engaged Governor Dayton has been on this issue and how deeply he cares about the people of Minnesota. I too am somewhat disappointed with the outcome, but believe as Dayton does that it was the best he could do under the circumstances of having to negotiate with Zellars and Koch and their caucuses that do not really care about state government, the plight of the people affected by the shutdown, or those who would be affected by their budget. The picture above of the grim faces of the key players tells it all: it was a lousy deal. I am really hoping–and praying– that the Republicans will pay for it at the ballot box in 2012 and that Gov. Dayton will have a Democratic majority back in the Legislature to enact his agenda. Let’s hope we don’t have to do all this again.
Horrible, horrible, horrible!!! How did Pawlenty get nearly everything he wanted for the last 8 years, utterly trashing the state’s finances and now Dayton caves in to extremist, shrill, anti-society Republicans? We have no fighters left in the Democratic party. Time for a third option all over again…
Minnesota legislature. Dayton’s letter is a counter-offer. it deserves no response until “the people” tear him a new one–and that’s what they’re doing already. say nothing. do nothing. you’re in charge, Minnesota legislature. wait dayton out. let him drop his demands completely, then get his unconditional surrender to you in writing. then send up two sets of paperwork: the first with a balance budget, the second set dayton’s impeachment papers. he can sign one or the other. many of you in the Minnesota legislature have held real jobs. dayton hasn’t. he shouldn’t be going around the state bashing the high earners as he said he will for the next several years. you can put a stop to that because it fuels capital flight. nobody ever got a job from a poor individual and nobody ever improved his or her lot in life by tearing down high achievers.
The positive is that government can be restarted. Each side gave up things that they could not put into place absent a change in who controls the Governorship or the Legislature.
The tragedy (and I don’t think that is too strong a word) is that the gap between spending levels desired by the Governor and the Legislature is funded through debt. Debt that will be pushed onto school districts and on future annual budgets as the Tobacco dollars are earmarked for repayment of the newly issued bonds. The structural issues in the State budget are not resolved — and the credit rating, and credibility of the State will take longer to restore.
This is a victory for the no tax lobby which — despite GOP scare tactics — will have negative consequences for MN in the long run.
I think back to the title of the school social studies textbook we used in 5th grade — ‘The Common Good’ — and realize that is a phrase that is anathema to the GOP of today.
Great the typical strategy “we can look good on credit.” Last year it was borrowing from the University and MNSC plus K-12. Although this year it looks like you took out that second mortgage on a declining asset.
Just like Congress run up a credit card debt for you buddies at DOD and then complain about the Debt.
http://usuncutmn.blogspot.com/2011/07/next-step-call-kiffmeyer-build-strategy.html
The budget AND the shutdown are merely SYMPTOMS.
The problem is Grover Norquist, Tony Sutton and the American Legislative Exchange Council – which serve the looney American right wing theocrats.
Yesterday, we published The Conspiracy of ALEC via The Nation, Alternet, and many other sources. This information would have absolutely established a criminal conspiracy of nonfeasance by the GOP negotiators and those in the Committees for Health and Human Services at the very least. Mary Kiffmeyer (R) is the one to be pointing every finger at, folks! She leads those revolting, cold GOP people to throw the poor under the bus. ALEC plays hard ball in every single state these days. That is the Conservative plan ..
Why are articles not mentioning the real cost of this to the POOR, the vulnerable, the veterans, those who need crisis lines, the CHILDREN, the seriously disabled … http://www.USuncutMN.blogspot.com
We’ve been saying this since the session began.
#2- Agree with you. We in Minneapolis will face huge property tax increases again as a result of this budget deal. Through no fault of their own, county, city, and township officials will feel the wrath of taxpayers as taxes are raised and services reduced.
Two things for me to be upset about this deal: first, I have been telling any friend from outside Minnesota who would listen that Tim Pawlenty is a gutless wonder who used accounting tricks and one-time money to create the illusion of balance. It is incredibly painful to see Dayton stooping to the same disingenuous strategies. I know we are saying he did it out of empathy, but that doesn’t make the strategy any less honest.
Second (related to #1 – the reason Fitch downgraded our bond rating was not because the state government shut down, but because our politicians had failed to honestly balance the budget over a long period of time. And that message has been ignored. I thought at one time that politics was politics, and reality could always be counted upon to knock sense into politicians. When push came to shove, I was under the illusion that democracies usually do the logical thing…I now doubt that. This makes me worried for the future.
#6 has to be trolling. It would take at minimum a Clockwork Orange-like conditioning to result in such a passionate belief in the gilded age gospel.
MRW’s Law of Politics #4: The Party of Government can not sustain a Government Shutdown. The fact that Dayton ran toward a Shutdown was based on a flawed strategy at it’s core; a stategy that was built on the supposition that the majority of Minnesotans would actually notice and rise en mass in support. Like the students on the barracade in Les Miserables, Dayton, the DFL, and their media sycophants hung themselves out to dry. They threw a party and nobody showed up (except the public union brother-in-law that nobody likes). In fact, the Shutdown actually reinforced the majority of Minnesotans’ basic questions about Government, “What the heck does it do? And why am I paying for it?”
Robert: How did TPAw get what he wanted? Because Democrats biggest weakness is we actually care about people. Dayton couldn’t allow 30k+ Minnesota jobs, families, and workers go down the tubes, but the REpublicans can. I guess I don’t ever want us to give up that weakness and become like the ideological terrorists who only care about winning and protecting the status quo.
We’ve traded the potentially job killing tax hikes of Dayton and now we have the guaranteed job killing spending cuts of the GOP.
Job killing cuts. Throwing people off healthcare life killing cuts. Get rid of thousands of jobs family killing cuts.
The only thing you can do when negotiating with ideological terrorists who don’t care if their hostage dies is to vote them out.
We can’t start bickering and finger pointing at each other or the terrorists win.
Mike – I’d say the fact that judges ruled lots of key things “essential” took air out of the balloon, and certainly doesn’t undermine the case for government.
Dayton got a potential *huge* advantage in the negotiations. He is just not telling what it is–yet. Let’s see how long it takes the conservatives to figure out they voluntarily stuck their heads in the public noose–and Dayton is holding the trapdoor lever.
Dayton got the best deal he could have and in reality the Republicans caved in at least somewhat on just about everything except tax hikes for the wealthy, provided the GOP legislative leadership actually has enough leadership skill to sell this to the extremists in their caucuses. Continuing this shutdown has come very close to transforming what was a disaster for many Minnesotans into a true state wide catastrophe.
Corporate charters and business licenses are left to the states under the Federal constitution which makes no provisions for that. State beer license for one distributor would have been only the beginning should this shutdown have continued much longer. For just one additional example consider medical licenses for both staff and facilities. They will not lift a hand without those licenses since their insurance coverage requires them.
Someone had to be the adult in the romm.
Historically, no budget challenges resolve easily. Mark Dayton did an admirable job. I am an idependant, not a Democrat or a Republican.
More important than being a Democrat or a Republican, I believe that, as citizens, we have an obligation to look at the government’s budgeting process. We should not be vicitimized and held hostage by our elected representatives as the result of budget crisis.
America is a democracy where the elected representatives are expected to complete their work in a timely manner with regard to the budget. The elected representatives serve the citizens and should work together to produce a financially responsible budget.
Since the work of the elected representatives is admittedly difficult and complex with regard to the budget, a binding mediation process should be mandated when the elected representatives fail to reach a budget agreement. The deadline for agreement should be 3/4 of the way through the legislative session. Failure by the elected representatives to agree on budget should result in a mandatory binding mediation process to produce a budget.
Most citizens want the budget completed in a timely and professional manner. A binding mediation process would assure the timely and professional budget completion.
I believe that the lack of legislative agreement on the budget is the result of inadequate voter supervision of the process. If voters require binding mediation through constitutional amendment, binding mediation will occur.
I am seeking comments. I believe that we need mandatory, binding mediation in the legislative budget process. I think that this idea deserves consideration as a constitutional amendment.
Finally, I sincerely wonder if anyone cares about the Minnesota quality of life, the American Dream, etc. I support civilization and would like to recreate an optimistic future.
Action plan: we need someone … Dayton, Carlson, Pawlenty, Mondale, etc. to support binding mediation to prevent legislative gridlock.
The Republican legislators were willing to destroy the Minnesota economy in order to push their extreme Right-Wing agenda. If you don’t want even more damage, remember this at next election time.
“Through no fault of their own, county, city, and township officials will feel the wrath of taxpayers as taxes are raised and services reduced.”
It is your fault if you voted for the local democrat politicians who would raise your property taxes in a recession.
You’re right, Dennis (#21).
Those nasty Democratic officials have some nerve raising funds just so roads get plowed, potholes get filled, bridges get fixed so they don’t fall down, and senior citizens get services that keep them alive.
Who needs all those perks?
Well, here I was thinking that the MN shutdown taught MN; MN government has grown intrusive, and is bad for local government, business and tourism.
The fact is, the revenue, local government, business, and tourism lost, will be hard to make up.
The discontent were heard and MN state property abused, but, with the Capital locked, at least nobody got a chance to trash it.
God forbid, @Dennis, that a local politician actually reflect the needs and desires of the voters that put him in office. Oh? That applies to GOP ideologues?
Potholes are non-partisan.
After this one is fully understood, we will all need intensive therapy at one of Marcus Bachmann’s therapy clinics.
@Dennis
Almost all local governments raised taxes, which eliminates the chance it was just “democrat” politicians doing it. They raised property taxes in a recession because local governments have to balance their budgets, and the property tax is all they have. Yes, it’s counter-stimulative, and public sector layoffs are the biggest drag on our economy now. I hate it too, but local governments have resorted to short school weeks and getting rid of police. They don’t have anything left to cut that’s big enough to help and even for those that do, cuts don’t always help.
…he had a singular answer to all those who wanted him to hold the line: “I don’t care what people say — we’ve got to get government working again.”
So why didn’t Dayton do a “lights on” bill…He did NOT have to do this!
Interesting comment by some DFLers, including Alice Hausman. It’s easy to criticize Dayton, but I have to empathize with him too. He’s less partisan than many of us and he makes decisions not based on what people (including we partisan folks) will think.
I’ve also been hearing comments about whether another DFLer would have held out longer. Maybe. But I’ve also heard speculation that one or more of them may also have capitulated earlier to the Repub’s demands. Monday morning analysis is easy, as the saying goes.
The Pawlenty years certainly have impacted our current situation (i.e., problem). The other part of the problem, of course, was that many progressives did not vote in this last election; thus the Legislature we are left with.
This is a very painful budget patch for Minnesota, but I support Governor Dayton because I trust him. There are very few politicians I can say that about.
Yes, it’s a bad settlement. The state gets the money it needs to provide minimal services by borrowing [bonding, postponing payments], not by raising revenue. But, as Alice Hausman, DFL-St. Paul points out: “… you just look at him [Dayton] and you can see that no one feels the shutdown more than he does. He knows he’s one of three people who can end this and that the other two [Koch and Zellers] will not do anything. He knows this shutdown is hurting people.”
I’d rather have a governor who acts like an adult, who can empathize, who can compromise, than a doctrinaire politician who thinks politics is the art of “never compromise.” I’ll work even harder to elect legislators who view taxes not as an evilly confiscatory burden but as honest payment for the services we want and who can support this grown up governor.
Our Governor Dayton has shown himself to be both compassionate and pragmatic. A fully-functional adult can weigh the costs and benefits of an impossible situation like the legislative gridlock Minnesota achieved and then act to end the stalemate. This is not a football game or a wrestling match; those who bray about “wimping out” or “going to the mat” overlook the fact that real people’s lives were being damaged by the shutdown. The deal the Governor offered took all the social agenda items the Legislature spent most of its time on last session and removed them from the budget decision-making process. Just look at the faces of K. Zellars and A. Koch – this is not a “victory” for them.
If I were the DFL in the house or the Senate, I would suck all the oxygen out of the room and make the Repuli-nuts eat some of their own bile: None should vote for this deal, make all the Reubli-nuts carry the water. Got your principles to stand up for don’t you know?
#30, Sue, I agree with your comment. It should never have come to this and Dayton finally saw the pain being inflicted on the people of the state. It made no sense to continue.
I have not seen any discussion on job creation but I believe that the state should put a lot more into recruitment of companies and businesses. We need jobs to grow the economy. It will never work if we only raise taxes and then increase spending. It’s a cycle that will destroy the state. We need to service the debt. Minnesota must get more industries in the state in order to create jobs and enlarge the tax base.
My other thought is that we have to get better welfare reform. We have too many people moving into the state just for our liberal benefits. It’s costly and not helping these people to help themselves. There must be more control so we can efficiently service those that are truly deserving.