Friday, July 22, 2011

The Minnesota Budget Deal: Lipstick on a Pig

The deal that ended the government shutdown in Minnesota was terrible both in how it was negotiated and in what it produced. While initially all parties who negotiated it described it as bad, increasingly they are defending it, seeking to find beauty in its ugliness. Yet let’s call this effort what it is—putting lipstick on a pig!

A Bad Budget Process

The government is shutdown. Barricades block access to the capitol. The legislature is suspended. The press and public are barred from observing negotiations. The opposition is kept in the dark. Once a deal is struck and the legislature is allowed to meet the public is given little notice about their deliberations which take place in the dark of the night. Members are restricted in their debate; they have no time to read the bills. They are told to vote for the bills and ordered to be finished by dawn. Sound like politics in a dictatorship or former communist country? Welcome to Minnesota.

From the week before the shutdown to the ugly end last Wednesday, Minnesota was a model in anti-democratic politics that violated all accepted norms of transparency, openness, and accountability. The Republican leadership and Governor Mark Dayton insisted on secrecy to allow for candidate debate, demonstrating hostility to democracy, a contempt for process, and an indifference to open government. What they did is possibly also illegal, violating Minnesota Statutes §13.D, the Open Meetings Law. Were a local government to have done what the legislature and the governor did it would violate the law. The process was bad.

And A Bad Budget Deal

But did the ends justify the means? Did the bad process produce a good result? Except for the delirious who have to salvage something out of it, no one likes the deal struck. But there are two types of dislikes. One is where everyone has to give but the final product is good for the state. The other is where everyone gives and it is bad for the state. The deal struck is the latter.

The budget deal is bad for Minnesota. Nothing was done to address the long term structural deficit the state faces; it is more budget gimmicks. K-12 faces more shifts and possibly borrowing from schools that never gets repaid. Minnesota’s competitive economic edge has historically resided in its highly educated workforce. Yet the budget deal sacrifices long term welfare and economic good for the state, continuing a repeated raiding of education money that questions how much of a priority Minnesota really places on schools.

The tobacco settlement money gets robbed, diverting it from the stated purpose to address health costs and education surrounding smoking. The borrowing here off the tobacco money means increased debt for the state. Thus, Minnesota continues to borrow and shift debt to the future in ways similar to what federal government has done for years. It is no different than paying off one credit card with another. In 2013 Minnesota will be back to the same place it is now. Minnesota is effectively deficit spending but budget tricks and borrowing hide that reality.

In short, long term problems and needed investments are sacrificed to end the current shutdown crisis. The governor and the legislature shut Minnesota government down to reach this deal? Given how bad it was, maybe it would have been better to continue the shutdown.

The Leadership Crisis

But why such a bad deal? One can point to political gridlock, dueling claims of political mandates, ideological polarization, and a host of other issues. But ultimately the blame comes down to a lack of leadership among the three principals–Senate Majority Leader Amy Koch, Speaker of the House Kurt Zellers, and Governor Dayton.

But why the lack of leadership? One answer is that all are inexperienced. None of them had ever been responsible for moving a budget through the legislature. For Koch and Zellers, they are new leaders heading up caucuses for the first time in years in the majority, composed of many new members and rookie committee chairs. They were not up to the job. For Dayton, the lack of leadership was surprising given his resume. Yet his experience in executive positions is distant, his relationship with the DFL party has always been fragile, and this was his first time shepherding a budget through the legislature.

Terrific, Minnesota’s political leadership this year were rookies and JVs.

So here is the leadership deficit: If this is the best deal Dayton, Koch, and Zellers can negotiate, with a process that was undemocratic and possibly illegal, then that questions their ability to lead the state and their parties. The three should have never let Minnesota get to this place.


  1. Pretty tough on the governor, Professor. For a DFL governor faced with an intractable legislature, full of the rookies you are talking about, I think the deal was the art of the possible. This was the Republicans' best chance to stuff some of the social policy down out throats, and it didn't happen.

    If we'd had a rhetorical giant like Barack Obama (kidding) as governor, he might have been able to move citizens to put more pressure on the Lege, but even that is doubtful.

    I personally give the governor good grades for the session. Now, the job is to communicate to the citizenry what a bad deal he was forced to accept to get the beer flowing again.

    That's where Mark Dayton needs to use the bully pulpit and use it effectively. It isn't his style, but that's what he has to do.

  2. I agree largely w Steve. If there was any shortcoming that Dayton had, it was that he was too experienced, too conventional and had expectations of how-things-should-be-done that were appropriate to how-things-have-always-been-done but not for the Republican rookies who deliberately wanted to change the process as well as the outcome.

    Dayton took the position as a statesman, not a partisian, and while this frustrated me as a partisian, it gave me comfort as a citizen that he had the larger, longer view. I thought he was extraordinarly clear in outlining the differences between the parties, his position, and of the need for compromise. He never resorted to sound bites or slogans, and called out the Republicans when they did.

    I don't think there was any way that I'd agree he lacked leadershipl. What he lacked was a majority of either house. His leadership will be tested in 2012 when he has the opportunity to campaign and elect a DFL majority with whom he can govern effectively.