Boehner and Dayton: A Tale of Two Politicians and Parties

In addition to the Pope’s visit, two end-of-week stories made headlines.  One was the resignation of Speaker Boehner, the other the miserable roll out of the medical marijuana program in Minnesota.  Both stories deserve comment because they illuminate broader problems for the Republicans at the national level and the DFL in Minnesota.

“The Crazies Have Taken Over The Party.”
Speaker Boehner’s resignation really should have shocked no one.  His entire tenure as speaker has been tense.  Made speaker when the Tea Party arose and which  lead to the Republicans capturing majority control of the US House during the 2010 elections, Boehner has always been pulled in several directions.  One is being leader of the House of Representatives, seeking to broker deals with the Senate and President Obama.  This is the pragmatic and institutional aspect of his role as speaker.  But many in the GOP (as was true with Nancy Pelosi when she led the Democrats and the House as Speaker) view the speaker as both their party and ideological leader, expecting that person to push their agenda.
While all speakers face this pull as institutional, party, and ideological leaders, some are better able than others to bridge the three.  Boehner did his best, but seldom pleased his most conservative members.  On several occasions he negotiated deals to keep the government open or avert a debt crisis, but he also failed on occasion too.  For the ideological purists in his party, he too failed.  He failed on abortion, failed to cut taxes enough, failed to challenge Obama and the Democrats enough.  There were constant rumors and signs of ideological battles and tests of his leadership, but finally it became too much.  Boehner said that he was stepping down to protect the House and not let the constant leadership battles threaten the institution.
The issue that finally seemed to do it is the one now linking the defunding of Planned Parenthood to funding to keep the government open.  The purists are willing to shut the government down to defund PP and expected Boehner to be both their ideological and party leader to help them here.  But Boehner as part leader knew that past government shutdowns have hurt the Republicans in the past and would probably again do so this year, risking electoral problems in 2016.  Finally, as an institutionalist he knew shutting the government down was not good.  Thus, his tri-lemma–represent the ideologists who have taken control of the party, protect the GOP from self-destruction in the house, and protect the House and the government as an institution.
In the end, the ideologies have won.  They have won not simply in knocking off Boehner (a person they did not ever really trust), but they have taken control of the institution and of the party.  Peter King, Republican from NY, describes what just happened as “the crazies have taken over the party.”   Mainstream media says this move makes it less likely that there will be a government shutdown soon.  Maybe.  Or maybe a weakened Boehner or future speaker will be able to control the ideologies even less, perhaps increasing the chances of a shutdown or more confrontations as we getting closer to the 2016 elections.  Stay tuned.
But there is also something else the mainstream media is missing.  One has to view the resignation of Boehner in conjunction with the Republican presidential polls showing that the three outsides–Trump, Carson, and Fiorina–are leading over the institutionalists or more mainstream GOP.  Consider also polls showing a Republican base entrenched on issues over hostility to immigration  reform, proposals to address climate change, abortion, taxes, and just about everything else, and it  is easy to see why Trump, Carson, and Fiorina are leading.  It is looking to be the year that the Tea Party revolution started in 2009 has finally won.  The Republican party has been made over–if not by Tea Party followers, definitely by the ideologists.    The Party is being pulled ideologically further and further to the right at the congressional and presidential level, representing a demographics and ideology perhaps far from the ideological center of American politics.  Whether this means in the short or long term their demise is a matter of debate.  How Democrats respond will be interesting to see.

Dayton’s Dilemma
The roll out of medical marijuana is effectively a disaster on all fronts.  Yes the legislation was terrible and misconceived from the start.  Instead of just legalizing marijuana or allowing for a deregulated medical use, Minnesota chose to over-regulate its medical use.  Few people would be allowed to use to, but only in an expensive processed form that would not be covered by insurance.  Doctors would be expected to write prescriptions for its use even though they had no financial incentive to do so and risked their medical license to do so because marijuana is still illegal federally and doctors could potentially be sued or prosecuted for suggesting its use.  There was a costly process to select vendors to sell medical marijuana and they would have start up and operating costs  that far exceeded our friendly neighborhood dope dealer.  Bad policy design leads to bad implementation and that is what we are finding out now.
In the last week stories have emerged that the rollout of the medical marijuana is going poorly.  The prices are too high, too few people qualify, stories to buy the product are few, and the vendors are losing money.  There is talk now of qualifying more people for medical marijuana, perhaps giving the program financial solvency.  This will ultimately fail.  The basic policy design  is flawed and tinkering around the edges probably will not fix it.  In too many ways the policy was  captured by too many special interests who all wanted a piece of the pie, and by flawed assumptions about who wanted medical marijuana and why.
On one level one cannot fully blame the Dayton administration for the faulty policy design.  Dayton originally did not want medical marijuana.  But there is a troubling pattern here.   Consider perhaps the three most significant initiatives of the Dayton administration–the Vikings Stadium, MNSure, and now medical marijuana.  All three have had major policy design failures and all three have had terrible roll outs.  With the Vikings stadium MN has one of the worst stadium deals in the country.  MNSure’s rollout was so bad even Dayton was willing to put on the table this last session killing the Minnesota health care exchange and opting into the federal one.  Now medical marijuana and the concession it needs a major fix.  This is not a good implementation history for Dayton and the Democrats, and it is a certainty that such a pattern will be an issue in the 2016 state legislative elections.

Politics, Drugs, and Sports: Thoughts on Clinton, Trump, Medical Marijuana, and the Vikings

The 2016 presidential race is effectively over already in 40 states.  In places such as New York and Texas, Republicans and Democrats respectively might as way stay home on election day because the chances of the voters in these states electing their party nominee are slim to none.  But it is small group of ten swing states (and Minnesota is not one of them) that will decide the election.  This is the conclusion and subject of my new book Presidential Swing States: Why Only Ten Matter.  Whomever wins in these states wins the presidency.  And if that is true then the Democratic and Republican frontrunners both are in trouble.
Both Donald Trump and Hilary Clinton are leading the polls in their party. According to a new Quinnipiac University Poll Donald Trump has huge negatives in three critical swing states–Iowa, Virginia and Colorado.  The same poll has Clinton trailing Walker, Bush, and Rubio in these states, even though she still has a lead overall against Republican contenders according to other polls.  For Clinton, this is a significant turnout around where just a couple of months ago she enjoyed strong leads over all Republicans, and even was far outdistancing Bernie Sanders
But because the presidential race (and even the primaries and conventions) are a 50 state (plus DC) contest due to the Electoral College, national polls mean little–it is about what happens in individual states.  For Trump this suggests that he faces major problems should he get the nomination–he may be unelectable among swing voters in swing states, some of which, such as Colorado, have a significant Hispanic population.  Of course his other problems–his disconnect between his brain and mouth and the fact that his first place is really only about 15% in the party polls, suggests major problems for Trump and for the Republicans.  It is not clear which is worse–Trump as the party nominee who drags the entire party down across the country–or Trump  as a third party candidate who drags the Republicans down and costs them a presidential race.  Assume Clinton and Bush get the nominations, this might be a repeat of 1992 when another third party candidate by the name of Perot ran against a Bush and Clinton, leading to a Democratic victory.
But Hilary Clinton and the Democrats too face problems.  Clinton’s problem in swing states also raises questions about her prospects of winning in a two way race.    Her big negatives and high name recognition make it unlikely she can really change her image as she is trying to do.  She is who she is.  Yes much of her criticism is sexist and the product of a smear campaign, but that is the reality she must face and yelling foul does not change much.  Should she get the nomination she faces problems winning the swing states not only because many swing voters will not vote for her but because the Republicans will use her to activate all types of misogynists and Hilary-haters.  Karl rove penned a recent essay declaring Clinton has a likeability or relateability problem still and Republicans will exploit that.  As a politically savvy friend of mine pointed out, Clinton will be a terrible draw at the top of the ticket.  For example, Clinton nomination will probably hurt Democrat’s prospects to win back the Senate and in Minnesota she will not help in knocking off Congressman Kline.
Finally, the money is still on Clinton to win the nomination but she could be damaged.  Weeks ago on Esme Murphy’ radio show I discussed how  Clinton remains weak in caucus states just as she was in 2008.  Image a scenario where Sanders wins the Iowa caucus (not impossible) and then does really well in New Hampshire (next to his home state of Vermont).  Clinton is damaged much like McCarthy damaged Johnson in 1968.  By the time we get to Minnesota I can see it too going for Sanders–he has the passion of the grassroots, Clinton does not.

Drugs and Sports
Two local stories deserve comment.
First, the roll out of medical marijuana so far is horrible.  Beyond the stories of Leaf Line  hiring three former or present states officials or representatives to work for them (raising tons of questions about ethics, perhaps illegal behavior, and whether the original bidding process for distribution rights was fair), there is the issue of so far only 340 individuals certified for usage for the medical marijuana.  There are few doctors registered to prescribe, fearful both of their licenses (pot is still illegal under federal law) and because there is still no scientific evidence of the value of pot.  While the State of Minnesota may not be interested in whether medical marijuana makes money, the private companies have to think about that.  With such a restrictive program and too few customers one wonders about the economic viability of the program.
Also, Leaf Line appears to be selling medical marijuana for about $350 per ounce.  Because  it is an experimental drug I am not sure insurance will cover it.  Because of this individuals may have to pay out of their own pockets to purchase it.  It probably will be cheaper to buy a dime bag from your friendly neighborhood dope dealer instead.
Finally, the Vikings stadium deserves comment.  One is the story points out that the Vikings stadium was one of the five worst sports deals negotiated with a government.  Minnesota tax payers got fleeced–Dayton and the legislature did a horrible job in negotiating the deal and we still have no idea regarding all that was promised since so much was dealt behind closed doors.  Second, the 12 person state legislative panel meant to oversee the Vikings project has not met in a year.  Effectively, there is little oversight here.  Finally, as Jay Kolls has pointed out in a channel 5 television segment I did with them, the development around the site in Minneapolis is a saga in back door deals.  The Vikings already has exclusive rights for 80 days on the public park being built next to the new stadium and Minneapolis is looking for more corporate sponsors for it.    One wonders what deals they will get on exclusive use and also I wonder whether I can show up to this public park and protest public funding for sports stadiums!

What does it mean to be a progressive Democrat today?

What does it mean to be a Democrat let alone a progressive one  these days?  The question was prompted by my recent op-ed in Minnpost where in response to an argument against the State of Minnesota granting the NFL tax exemptions to host the Super Bowl, one reader wrote that he supported public funding for the stadium along with the tax breaks, and that he was a Democrat and a “fairly far to the left one too.”
    Since when does a progressive Democrat support tax subsidies and breaks for billionaires and hugely profitable private companies that generate few jobs for working people and provide entertainment (in person) that only a few can afford?  I thought that was what the Republican Party did?  With Democrats like this, who needs Republicans.
    But the debate over tax breaks for the Vikings stadium and the NFL does prompt a broader debate about what it means to be a Democrat or a progressive these days?   It is certainly not  good old-fashioned economic liberalism.  This is not Bill Clinton liberalism that supported NAFTA and welfare reform and which Mitt Romney once warmly embraced as the kind of Democratic Party politics he liked. 
    Instead, the progressive politics that appears dead is that of Lyndon Johnson, John Kennedy, Franklin Roosevelt, and even Teddy Roosevelt. It is about a 21st century version of the Great Society and the New Deal.  It is about redistributive politics that seek to raise those at the economic bottom, narrow the gap between the rich and poor, and wrestle control of political power in the United States from corporations and plutocrats.  It is about the spirit of John Rawls, Michael Harrington, and Dorothy Day and a commitment to believing that the government has an important role in make sure we are a nation that is  not one-third ill-fed, ill-clothed, and ill-housed, that kids should not go off to school hungry, and that corporations should not have the same rights as people.  It is the idea that we help out the least advantaged and most vulnerable first and that the rich have an obligation to help the poor.
    What has taken over for Democrat Party politics is warmed over Republicanism–the centrist sort of corporate politics that some GOP once represented but now have  abandoned as it races further and further to the right, embracing xenophobia, homophobia, and a market fundamentalism that Social Darwinists would embrace. Oh, and vaccines cause mental retardation and global warming does not exist, at least this is what many current Republicans believe.  Even the Republican Party of Abe Lincoln supported civil rights, but not this party–instead it is committed to fine vision that a nineteenth century politician would weep over.  But now consider the Democrats.
    Start at the top.  Obama ran promising change.  The reason why so many are disappointed in him is not that he was too far left but that instead he failed to deliver on his lofty promises.  At inauguration Obama had a window to change America but he flinched.  Carpe diem was not his motto.  But in reality, Obama was never a progressive.  He ran for president opposing a single payer health insurance plan and instead embraced the Republican plan that Mitt Romney adopted in Massachusetts.  Obama was not originally in favor of repealing “don’t ask, don’t tell,” and he did not embrace same-sex marriage until public opinion and political necessity dictated he do so.  
    Obama has deported more  individuals than any other president, he supports coal and nuclear power, and his big victory in repealing the Bush era tax cuts came with a reinstating of the payroll tax, imposing on Americans a more regressive and costly tax system than before.  Obama also defends the use of drones to kill Americans abroad, and he refuses to make any serious changes in an NSA surveillance program that  runs roughshod on the civil liberties of Americans. And in 2008 he took more money in from Wall Street than any presidential candidate in history.
    Across the board many Democrats seem confused to their identity.  They support public subsidies for downtown ball park stadiums and convention centers ahead of neighborhoods.  They defend NSA spying on Americans except when they are spied on.  They take little action to address the impact of money in politics and instead beg for money from big donors and PACs.  They offer few real substantive ideas regarding how to tackle issues such as the achievement gap and the economic discrimination against women (who still make only 77% of what men make).
    Worst of all Democrats lack the guts to fight.  Why?  Democrats (and one should not confuse the current party with progressivism) believe that they are the caretakers for government.  They believe that they need to be responsible and not run the risk of shutting the government down for fear of how it would ruin the economy or hurt people.  But conservatives know this and take advantage of the Democrats willingness to blink.  But guess what?  By blinking the Democrats are screwing over poor people and the economy slowly by giving ground one inch at a time and they seem unable to recapture it. Until Democrats are willing to fight and show conservatives they are willing to shut the government down and hold conservatives responsible they will never win.
    What passes for progressive  Democratic Party politics seems so bland.  Same-sex marriage?  Supporting it a decade ago was progressive but now that is mainstream.  Opposing NSA spying on Americans?  Even Rand Paul does that.  No one should be against strengthening anti-bully legislation.  This is not progressive politics but just common sense.  Yes, raising the minimum wage to an adequate level is good progressive politics, but few talk of living wages these days.
    Progressive politics is dead so long as it is married to the current Democrat Party.  Progressives need their own TEA Party revolution on the left–one that engineers a new rhetoric and take over of the party.  One that is not willing to play it safe and worry that if a few Democrats lose  that means the Republicans win.    It means a willingness to fight for what you believe in.  It also means believing in something worth fighting for.

Previewing the 2014 Minnesota Legislative Session: Issues and Contrasting Agendas

    This week the Minnesota Legislature reconvenes. To predict the dynamics of the 2014 session one needs to understand how the governor, the House and the Senate, and the Democrats and Republicans all have different interests in what should happen in this short session.  While in some cases their interests may converge, there are also powerful forces that may push them in very different directions, potentially creating interesting conflicts that set up the 2014 elections.  Specifically, lookto see how party, region, and chamber and branch of government create contrasting interests in what happens in the 2014 session.

The Issues
    What are the major issues for the 2014 session?  Passing a bonding bill is the main reason for the session.  Estimates are that a bill of about $800 million is what both the Democrats and Republicans seem to want, but beyond the amount, the exact projects remain in dispute.
    Second, left over from 2013 are three issues–a hike in the minimum wage, anti-bullying legislation, and a fix to the civil commitment program for sexual offenders.  All three are hugely controversial items that will divide the parties.  Third, the legislature needs to decide what to do with the budget surplus–spend or save.  Finally, other issues such as whether to repeal the business warehouse tax, finding a more permanent funding solution for the Vikings stadium, and business law reform (something Dayton has talked about) are possibilities.
    What will we not see in 2014?  Government ethics reform.  Minnesota’s government ethics laws in terms of disclosure and conflict of interest are vastly out of date.  The legislature made it worse last session in voting to change the gift ban law for themselves, making it yet again possible for them to be wined and dined by lobbyists.  Representative Winkler is correctly proposing in HF  1986 to undue this exemption, but it will be a shocker if this legislation passes.  But even if it does more reforms are needed.  The state could use a revolving door bill to place limits on former legislators from coming back and lobbying the legislature at least for a year.  About half the states have laws like this.  More lobbyist disclosure, legislator conflict of interest of laws, ethics laws for law governments, and contribution limits to the parties and caucuses are all needed.  But don’t expect to see any of these reforms proposed.

The Coming Elections
    Overshadowing the session are the 2014 elections.  The governor is up for re-election as is the entire House of Representatives.  This is not necessarily a good year for Democrats.  No this is not 2010 all over again where anger against Obama and health care reform mobilized Republicans, depressed Democrat turnout, and swung independents toward the GOP.  This year Dayton’s approval ratings are riding high, as are Senator Franken, and perhaps there are some coattail affects here.  Yet  in a non-presidential election year Minnesota’s voter turnout drops to the low to mid 50s–a 20 or so plunge from presidential election year turnouts.  The biggest loss comes in terms of voters who generally support Democrats–the young, women, and people of color.  Democrats can do well this year in Minnesota, but they need to mobilize their base and keep the swing voters on their side.
    This means, at least for the Democrats, that they want this to be a short legislative session where they can get their main task accomplished–passing a bonding bill–while giving the Republicans little opportunity to find anything to use against them in the election.  Thus in general Democrats will not push too hard this session, much to the dismay of many of their supporters.  Conversely, Republicans are looking for inroads, wedge issues of use to them that will rally their base and peal away independent voters from the Democrats.
    Don’t look to see gay marriage be a 2014 general election issue.  It is a loser for Republicans, except as an issue to use within the party to beat up fellow party members.

Contrasting Political Agendas
    However, the DFL House, Senate, and Dayton have contrasting interests.  The entire House is up for  election and the DFL there do not want to tackle issues that will hurt them.   The Senate is not up for election. At best, there are probably no more than a dozen or so seats that are swing in the House, and the DFL will need to hold them to keep their majority.  Look for them to avoid medical marijuana and anti-bullying legislation.  Both are too controversial and may be perceived to be issues that produce political backlash from conservatives.  Moreover, the DFL has said that they want to move on minimum wage, but again don’t look to seem them push for a wage that really makes a difference.  It would make sense to pass meaningful minimum wage laws and with a built-in index for future automatic increases.  The DFL may have only this session to address the minimum  wage issue and if it were smart it would take advantage of the opportunity.
    No one wants to touch the sex offender civil commitment program.  It is probably unconstitutional but any change in the law lends to potential partisan criticism that the other is soft on sex crimes.  This is an issue that both parties would rather see go away–at least until 2015.  Alternatively, the GOP would love the DFL to act, giving the former a great issue for the 2014 elections.
    Additionally, the DFL needs to decide what to do with the budget surplus.  The House would love to be Santa Claus and do a tax cut–such as repeal the business warehouse tax–or provide other cuts that will be politically popular.  The DFL Senate does not see it that way, perhaps preferring to save it in a rainy day fund.  So far Governor Dayton has not made it clear what his priorities are, and his interests may be closer to the House in terms of what to do.
    Among other types of legislation that need to be addressed is fixing the fix. By that, the fix to the Vikings Stadium funding is still not financially secure it needs revisiting.  The money to pay for the  state’s share of the stadium is still not built on a secure revenue stream and unless another one is found, the public will be paying for the stadium out of general revenue.  Looming over the session also will be MNSure.  How it operates in the next few months and what might be done  legislatively about it may be one of the make or break political issues in the coming session.
    Finally, plans by Polymet mining pose a huge risk for the DFL, potentially pitting urban progressives and environmentalists against unions and Iron Rangers.  While there are no immediate calls for legislative action on this issue there is still the potential that it could creep up in bills, forcing the Democrats to make difficult choices.

Conclusion
    No legislative session is devoid of politics.  The same will be true in 2014.  How that politics plays out in next couple of months will tell us a lot about what might happen in the November elections.  For now, look to see how the issues divide along the party, branch and chamber of government, and region.

Grading the 2013 Minnesota Legislative Session: C+ for DFL but F on Reform and Bipartisanship

Students across Minnesota are finishing their exams and awaiting their final grades. The 2013 Minnesota legislative session is over and now it is time also  to assess the performance of one-party rule in Minnesota.  So how did the DFL do?  If the legislative session were to be graded, it earned an overall C+ but F grades when it came to working together and in making structural reform.
    Republican State Representative Steve Drazkowski, of Mazeppa, stated it well:  "We had an election back in November. And yes, Minnesota, elections have consequences."  Had Tom Emmer rather than Mark Dayton been elected governor in 2010 Minnesota might well be a state that looks different today with more restrictive laws on voting, abortion, taxes, and perhaps on same-sex marriage.  But Dayton did win and Republicans overreached with the marriage and elections amendments and in precipitating a government-shutdown.  They were ousted, yielding the first one-party rule in Minnesota in 20 years. 
    DFLers promised a lot.  They pledged a balanced budget with no gimmicks, a bonding bill, and a host of other pieces of legislation addressing economic development, bullying, guns, minimum wage, and unionization for day-care workers.  The governor also pledged to solve the funding formula for the Vikings stadium, raise income taxes on the wealthy, invest more in schools, give some property tax relief to homeowners, and transform the sales tax system to include clothing and more services.  All this the Governor and the DFL pledged to do in a bipartisan fashion.  Such a pledge was made out of fear of overreach if they were to purse issues such as legalization of same-sex marriage.
    No matter what post-mortem is written up, this will forever be the session as the one known for legalizing same-sex marriage.  It did so largely along partisan lines and it did so in part because of intense lobbying from supporters of same-sex marriage who unleashed a drove of lobbyists at the Capitol.  It also passed because of the perfect storm of shifts in national public opinion and state views that even if not supportive of same-sex marriage they were not opposed.  Passage of it should relieve Republicans of advocating a losing issue for them, but its legalization may also give DFLers little bonus point in the 2014 House elections.
    Democrats largely delivered on Dayton’s tax pledge for the  wealthy will pay more, but largely abandoned the reform of the sales tax system, opting instead for the safer option to go after smokers with $1.60 more per pack.  This tax will be used for general revenue and to help finance the Vikings stadium.  In do the latter, the governor and the legislature are essentially using tax dollars to finance the stadium, and there is no clear indication that these revenues will be enough to offset the miserable pull-tab revenues.  The State is addicted to addiction, counting on smokers to continue to smoke and not using the new revenue to offset smoking-related expenses.
    The budget was done on time barely, and DFLers displayed terrible time-managed skills and the ability to reach consensus among themselves, revealing what came close to single-party gridlock. But whether the budget was done gimmick-free and balanced is a matter of debate.  Originally pledging to pay back the K-12 shift, that was abandoned by the DFL.  Additionally, the  nearly $800 million borrowed off the tobacco bonds last session should have been paid back, and that too is not reflected in the balanced budget.  The State failed to make any real changes in any tax law to make it more stable–such as a change in property taxes to help in-state businesses, or adjust sales taxes.
    Single-party rule also produced a stripped-down bonding bill to pay for capitol renovations,  money for Rochester and the Mayo Clinic, tax credits for Mall of American expansion, more money for K-12, a freeze of public university higher education for two years, a daycare unionization law, and some property tax relief for home owners.  One should also not forget that the health care exchanges were created to allow state implementation of Obamacare.  All of these are significant accomplishments.  The DFL failed on enacting anti-bulling legislation, a new minimum wage bill,  and significant gun legislation.  For all of these changes the DFL deserves an overall C+ grade–it delivered on many of its promises.
    Yet the legislative session failed to produce much in terms of bipartisanship.  Too many of the votes followed party lines, revealing a state largely divided.  Both the Democrats and Republicans will go to the voters in 2014 telling their side of the story, leaving Minnesotans the final  verdict regarding whether the Democrats deserve to hold on to the governorship and House majority  control.
    Finally, where the DFL really failed was in terms of structure reform.  There was no comprehensive sales or property tax reform.  There was no major reform of the way government does business.  But more sadly, the biggest story the media has taken a pass on is how this is a legislative session that not only failed to take the chance to make structural reforms but actually moved in the wrong direction and caved into lobbyists and special interests on a range of issues.  The legislature passed campaign finance un-reform legislation that would increase contribution and spending limits dramatically, allow for lobbyists to give more gifts to legislators, and also increase the level of disclosure for contributions, thereby making it easier for many, including lobbyists, to give more money but with less disclosure and transparency. To a large extent, this is a dismantling of the remaining vestiges of the Marty reforms from the 1990s and a giant step back in government integrity.  Minnesota has already had shrunk and fallen from its heyday when it was national leader in political ethics, earning failing and near failing grades from the non-partisan Center for Public Integrity in these areas. The new changes do nothing to reverse that trend.  For these reasons, the session deserves an F when it comes to structural reform, doing little to change the way the State does business for good.

Clothing Taxes and Hotel Subsidies: Dumb and Dumber

Two items in the news point again to foolish decision making by some elected officials, especially when it comes to economics and business.

The first is continued insistence by Senator Tom Baak and the DFL to impose a sales tax on clothing.  Recall that the governor initially suggested this idea earlier this year in his tax plan version 1.0.  He proposed it along with a B2B tax on various services.  Both the clothing tax and the B2B were so unpopular that he repudiated both.  Now the Senate wants to move forward with the clothing tax even though the governor and the House DFL are opposed.  This political opposition should be enough to suggest it is a bad idea, but there are other reasons to oppose the clothing tax.

First, while a tax on clothing is not unheard of in other states, it is not something that has been done yet in Minnesota.  Perhaps the public could get accustomed to it over time, but right now there is a lot of resistance to it among the public.

Second, even if extending sales tax to clothing can be done at a lower rate and thereby make the overall sales tax rate lower, this is a regressive tax being proposed by the DFL.  If clothing is taxed but there is no extension of the sales tax to B2B services then this is definitely an overall less progressive tax than before. This is a tax that will weigh more heavily on the poor.  It is a tax that soccer moms will notice when buying school clothing for their children. 

Third, this is a tax that might also hurt Minnesota businesses.  Currently many Minnesota businesses are hurt by Internet companies which do not have to collect sales tax.  With clothing not taxed the impact for sales of this type is less.  However, enact a clothing sales tax and businesses with a physical presence in Minnesota will be hurt because Internet businesses will have a tax advantage.  Perhaps this tax advantage will disappear if the US Congress agrees to allow states to tax Internet sales.  However, at present the change in tax law seems foolish and it risks hurting places like Mall of America which do a brisk job in terms of tourist and destination sales.

The second issue is a call for the City of Minneapolis to subsidize the building of a new hotel in the city.  The city aspires to becoming a major convention city and some believe that adding another 1,000 rooms will do that. 

In many ways the City is becoming captured by subsidy fever.  First the public pays for Target Filed and now it is going to be on the hook for the new Vikings stadium.  The Convention Center loses money and the Target Center would like a handout too.  With all of these demands for the public  to subsidize it is not a surprise that a hotel wants the money too.

However, remember that hotels are private businesses.  The public should generally not be in the business of giving tax dollars to private businesses. If there truly were a market for another 1,000 units it would be profitable for private investors to build it.  If the public were to subsidize this hotel what is likely to happen is what has transpired in other cities–the other hotels suffer and often close.  It gives unfair competition to one developer or hotel over another. 

The logic of the subsidy here is a Field of Dreams “If you build it they will come” belief.    It is a belief that by building another hotel more tourist will flock here.  Yes, to Minnesota, a state with a cold six or more months of winter that wants to compete against San Antonio, Texas and other Sunbelt cities.

There is little evidence that Field of Dreams development strategies work.  As I have pointed out in my recent book, many other cities have built convention centers, aquariums, and other tourist attractions with the hope of luring people to their cities.  One city doing this makes sense, multiple cities doing it dilutes the effect and increases the competition, thereby lessening the chance that such a tourism strategy will work.  This is where Minneapolis is headed too.  Some seem to believe that instead of investing in neighborhoods, schools, and quality of life.  sports, convention centers, and hotels are the key to the city’s economic development.  Any strategy  relying heavily on public subsidies is questionable. 

Fear and Panic, Minnesota Republican Style

    Fear and panic may be the words for now to express how Republicans, conservatives, and business leaders such as Charlie Weaver view the coming 2013 Minnesota legislative session.  The fear and panic is that with the DFL having control of the legislature and all of the constitutional offices, businesses and the affluent will face higher taxes, the economy will go to ruin, and the Chamber of Commerce will not be able to pursue objectives such as restructuring teacher tenure,   public sector pensions, or state government in general.

Have no fear though, it is unlikely that the DFL control will live up to your anxieties for many reasons.

First, this is not the DFL Party of Humphrey, Mondale, Freeman, and Wellstone.  This is a DFL party headed by a pro-business governor and a party firmly rooted in the Twin Cities suburbs such as Edina. These districts are business-orientated and affluent and it is unlikely that DFLers from areas such as Edina will stray far to the left.  Democrats elected in these suburbs are not liberals, they won tight races in swing districts and any serious move to the left will cost them their seats and possibly a House majority in 2014.

Second, were the DFL majority moving to the left it would have made John Marty chair of Health and Human Services.  Marty, who supports a single-payer health insurance program, has the seniority to receive this chair but was passed over for this position.  Don’t look to see the DFL push real progressive positions.

Third, a DFL governor and coalition already demonstrated this year its pro-business attitude when it gave the Vikings and the business community a new stadium.

Fourth, the business community has already overreached and many of its goals are beyond what they should be addressing.  Issues such as teacher tenure are beyond what the business community should worry about, especially if it concerned about the quality of K-12.  If the latter is the issue, then lobby for early-childhood education, fully funding K-12, addressing racial disparities in schools, and providing teachers, parents, and students with the support they need for kids to succeed. 

Finally, live in reality.  Consider the last time the DFL controlled the governor’s office and both houses of the Minnesota legislature.  It was from 1987 to 1990 when Rudy Perpich was governor.  Wanting to make Minnesota the brainpower state, the governor pushed for reforms in K-12 that helped make sure the state’s schools were among the best in the country and students tested at or near the top in national performances.  It was a time when Minnesotans and businesses were among the highest taxed in the country, and also a time when Minnesota had one of the highest median family incomes in the nation, lowest crime and incarceration rates, and a high concentration of Fortune 500 companies.

Additionally, consider the unemployment rate during those four years.  While the national average was 5.7%, in Minnesota it was 4.7%.  Compare that to October, 2012, with a Minnesota unemployment rate of 5.8%.

Unemployment Rates
Year            USA        MN
1987            6.2        5.1
1988             5.5        4.3
1989             5.3        4.4
1990             5.6        4.8
4 yr Avg        5.7        4.7

Oct 2012         7.9        5.8

Perpich opened up the International Trade Center in St Paul, and under him and the DFL control of the legislature, Dayton-Hudson Corporation (now Target) was able to pressure them to hold a special session in 1987 to change Minnesota corporate law to prevent them from being taken over by Dart Corporation.

The point?  Minnesota and its businesses did not do so badly under the last time when the state was under DFL control.  Now, 23 years later, a more moderate and business-friendly DFL is in charge.  The evidence does not support the panic and fear the business community has and, in fact, it may find a supportive party willing to accommodate them in many situations.

The Lesson of the Vikings Stadium—Democracy Failed

Please note: This piece originally appeared in Politics in Minnesota on May 16, 2012.

The duties of elected officials are never easy. But in the case of the Minnesota Legislature, the deliberations and final votes on the Vikings Stadium reveal a travesty for political accountability, open government, and questionable politics.

The eighteenth century Irish statesman and political writer Edmund Burke is famous for his 1774 campaign speech to Bristol electors where he described two duties for elected officials. He suggested that members of parliament either served as delegates–voting to ratify the exact views of the constituents–or to exercise their best judgment and vote for what they considered to be in the best interests of the people or country. Burke opted for the latter, contending that the deliberative nature of governing meant that a legislator should use “his unbiased opinion, his mature judgment, his enlightened conscience, [and] he ought not to sacrifice to you, to any man, or to any set of men living.”  It is not the job of legislators to follow popular will, but instead to vote based on what they know is best, regardless of the will of the constituents. Burke lost his election with this speech.

In light of significant public opposition to public funding for the new Vikings Stadium, many are wondering if those who voted in favor of it will be punished this November. The simple answer is no. Back in 2006 when the State Legislature authorized a new Twins stadium that November no House or Senate member defeats could be attributed to their votes for or against the stadium. The same will probably be true again this year in the general election. The economy, the government shutdown, constitutional amendments on voter ID and same-sex marriage, as well as national issues and a presidential election are sure to loom as larger issues on the voters mind than the stadium.

Yet just because the stadium will probably not be a general election issue (it may be a problem in primaries or nominating conventions especially for Republicans who supported it) does not mean that there were no problems with how the deliberations occurred. Instead, the Vikings Stadium debate reveals both bad process and politics.

First, there is the problem with open government. Almost from the start the Vikings debate was done behind closed doors. Governor Dayton conducted the debate as if he were a CEO in a private company. Critical meetings, such as with Zygi Wilf and NFL Commissioner Roger Goodell took place behind closed doors. In fact, the Vikings deal seemed dead until the Commissioner visited and then suddenly the Senate took a vote. Who knows what was said or promised at that meeting? But the point is that numerous open meetings laws were probably broken by the Governor and Legislature in securing the deal. This continued the contempt for open government first demonstrated last year.

Second, consider who voted for the stadium. Of the 201 legislators, 199 cast votes. Of that 199, 112 or 56% of the legislators voted yes. Among those seeking re-election to their seat again this fall, 88 of 158 or 56% voted for the stadium. For the 31 legislators indicating that they were not running for reelection to the Legislature, 20 or 65% voted for the stadium. There were another ten legislators not running for their seats but seeking another office and only 4 or 40% of them voted for the deal. Put another way, for those seeking election this fall, 55% voted for the stadium, for those not seeking office, 65% did.

Voters will not have an opportunity to hold 31 legislators responsible for their votes. Perhaps not seeking reelection freed that latter up to vote for what they thought was best, or perhaps to let voters be damned. Or perhaps it was the product of money well spent by the Vikings.

Last year the Vikings spent $800,000 to lobby for a new stadium. Since 2002, the Minnesota Vikings have spent $5.66 million lobbying the legislature, governors, and local metropolitan governments to secure a stadium. This sum is garnered from reports on file with the Minnesota Campaign Finance and Public Disclosure Board. This is in addition to political contributions to the candidates and the legislative caucuses. In 2010, the Zygi Wilf and the Vikings gave $27,600 to all four legislative caucuses. We will not know until next year how much they spent in lobbying and political contributions this session to buy a stadium but their investment was worth it. The role of money and the failure of the public to know in real time how much money the Vikings spent to buy influence is a crisis in transparency for Minnesota government and one of the reasons why the state earned a D grade from the Center for Public Integrity for ethics and openness in government.

Third, consider the odd alignment that the Vikings vote yielded. Overall, DFLers produced 55% of the votes for the stadium. Additionally, of the 90 Democrats voting on the stadium 62 or 69% voted for it, while 50 of 109 or 46% of the Republicans supported it.

Given that a DFL governor pushed the bill, the DFL produced the majority of the votes for the stadium, and over two-thirds of them supported the Vikings proposal, the Democrats own the stadium. In backing it, the DFL squandered its political advantage in November. Republicans steal $2 billion from K-12 and borrow $700 million from the state tobacco settlement to produce a gimmick-riddled budget in 2011 to end the government shutdown.

Now the DFL give corporate welfare to a billionaire. Moreover, in doing the Vikings deal the DFL overrode the charter amendment in Minneapolis requiring voter ascent for any stadium bonding over $10 million. They do that with the support of a DFL mayor and city council. So much for taking the moral highroad when it comes to priorities. So much for support for democracy. The Democrats practically make the Republicans look fiscally responsible and it becomes almost impossible for DFLers to criticize them in the November elections when it comes to the budget and spending. The Democrats now look more corporate and pro-business than the Republicans they want to criticize.

The Legislature, especially the Democrats, had a choice—follow their constituents or ignore them. They chose the latter and will probably get away with it, unlike Edmund Burke.

A Failing Grade for a Failing Legislature

I am an educator. Were I to assign my students three projects and they failed to complete them by the appointed time their grade would be an F. The same goes with the Minnesota state legislature.

The single most important task they are supposed to do in even number years is pass the bonding bill, They have yet to do that, putting them on mark to join 2004 as the only other year in recent memory when they failed in that task. When that happened the Senate was DFL, the House GOP, and because only the House came up for election, the GOP paid dearly and lost a lot of seats.

This year there are three major tasks before the legislature now–the bonding bill, a GOP plan to zero out property taxes for the businesses, and the Vikings stadium. Two of the three ideas are bad. The Vikings stadium is welfare for a billionaire and as I have pointed out scores of times, public subsidies for pro sports teams is a bad economic investment. Yet Dayton and Ted Mondale persist in spinning this fiction. Zeroing out taxes for businesses will–as the GOP concede–create future budget shortfalls yet they claim that the cuts will be made up with future economic growth. Welcome to supply side economics again. Only the bonding bill makes sense as a task to accomplish.

However, while these are the three items on the legislative agenda now, don’t forget that earlier in the year there was talk of reforming government as an agenda item. Where is it? Instead, this legislature has passed bills on abortion, guns (Stand Your Ground), and fireworks. In the 20+ years I have observed the legislature this is about the least productive and worst performing one I have ever seen. They might as well adjourn now. But they will not.

The bonding bill, which Dayton wants, is being held hostage. The GOP really want the tax cut and are indifferent to the Vikings stadium, at least the leadership is. They have announced that the three issues are linked and a global agreement has to be reached on all three before any of them will be brought up. This is a great game of chicken here.

In theory the GOP Legislature should have the upper hand. Dayton has two items he wants and the GOP only one. They are relying on Dayton caving on taxes in the same way he caved last year to end the government shutdown. They are assuming he will blink first. However, the legislature is up for election in 2012 and Dayton is not, giving him some advantages which so far he seems unwilling to use. Instead, Dayton says more negotiations will occur. These negotiations, it should be noted, are behind the scenes, sacrificing again in this year open and transparent government.

What is preventing agreement on these items? I put the blame first on leadership on the part of the governor and the GOP leadership. They seem so inexperienced even in their second year on the job. Second, the GOP leaders have little control over their rank and file and cannot seem to corral them. They are very divided on many issues but still united on the social issues and those which seem to matter very little. Finally, the DFL minorities seem to be giving away what little advantage they have by seemingly going along with a willingness to deliver votes for the Vikings stadium when their best tactic is vote against it and them blame the GOP either for giving millions to a billionaire while defunding K-12 or letting the Vikings go if no bill is passed.

Overall, this is a dismal session deserving of an F grade no matter what happens.

Top Ten Things That Should or Should Not be Done with Minnesota Unexpected Budget Surplus

A surprise for all–Minnesota appears to have a $876 million budget surplus. Santa came early and now the talk at the state capitol will be over how to spend the money. Here is my short list on some good and not so good ideas.

My suggestions are in descending order from good to bad ideas. Expect debate in MN to focus more on the bad as opposed to the good ideas.

1. Do nothing. The surplus is illusionary and may vanish or change dramatically before the next fiscal forecast by the end of February, 2012.
2. Save it. Bring up the state’s rainy day fund.
3. Save it for the deficit in 2013-14 budget.
4. Use the money to pay off the interest and borrowing off of the tobacco endowment.
5. Repay the money borrowed from K-12.
6. Restore the cuts to the homestead tax credit.
7. Restore local government aid funding.
8. Restore health and human services cuts.
9. Tax cuts for businesses and wealthy to create jobs.
10. Money for the Vikings stadium.

Bonus suggestion: Provide a down payment on Zygi Wilf's next townhouse.