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.
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.
“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.