For more information contact: Charlie Vander Aarde 651-297-8406

COMMUNITY NOTICE

WHAT'S CAUSING THE IMPASSE BETWEEN REPUBLICAN LEADERS AND THE GOVERNOR?

Since the media are not giving out the facts, this will set forth the reality. First of all, those of us who are DFL legislators are not able to have a real say in the bargaining because the Republican legislators in both houses of the legislature are sticking together and disregard DFL suggestions.

WHY IS THERE ADDITIONAL COST WITHOUT ANY NEW SPENDING?

In the last biennium, the state spent $34.3 billion for ongoing expenses (which includes 2.3 billion of money given by the feds to the state to spend on such things as medical care, and also includes 1.9 billion of money the state told schools to spend in the last biennium and the state would reimburse them during the next biennium). If the same things were paid for under the past law and present law, the cost would be 39 billion. The cost would only be 37.6 billion if the state again delays the reimbursement to schools (which both the Governor and Republican leaders agreed to).

Contrary to what Republicans claim, almost none of that increase is caused by raises for state employees. First of all, the raises for them in the last biennium were less than 2%. Moreover, their cost is only a tiny portion of the budget. A large part of the increase is caused by the large increase in the number of students in Minnesota and the fact that more students throughout the state are requiring the additional services of special education. About half of the state budget is for education. Another large factor is medical assistance, which constitutes almost a quarter of the state budget. Most of that goes to seniors in nursing homes. A large increase in M.A. came from Minnesota matching federal dollars to cover non-senior adults who are near minimum wage and no longer have health insurance. Most of our cost for this would be recouped by a surcharge on medical providers which they agreed to. It's always cheaper to provide medical care through a clinic this way than to have them go to a hospital where we have to pick up those huge costs.

REPUBLICANS REFUSE TO COMPROMISE

The Republican cuts to the state budget would create an increase of $1.2 billion in property taxes for Minnesotans, according to nonpartisan research staff.

The Republican legislative leaders have compromised zero times. Governor Dayton has made three major compromises. Almost everyone in Minnesota wants both spending cuts and revenue increases to deal with the budget shortfall. Dayton was faced with a huge budget deficit when he took office. He proposed various spending cuts. He also proposed a tax increase for approximately the richest 5% of Minnesotans. (While the rest of us pay roughly 12% of our income in total state and local taxes, the 5% with the highest incomes pay only 10%.) Dayton's tax increase would have only been on couples earning over $150,000 income after deductions, etc. (which would be a gross income of around $175,000). So a couple making $180,000 would pay around a $100 per year extra. Not a huge pain in my book. Dayton would also have put on a 3 year 3% surtax on couples making over $500,000 per year; would have closed the loopholes for foreign operating corporations; and would have put on a property tax on homes over $1 million in value.

Then when the March forecast (from the national economic advisors) showed their would be more revenue next biennium than expected, Dayton dropped his tax proposal by nearly $1 billion, mostly by getting rid of the surtax on incomes over $500,000, as requested by Republicans.

Near the end of the regular legislative session, in order to get an agreement with the Republicans, Dayton again lowered his tax proposals by cutting the already-lowered increase by another two-thirds of a billion. He said the only increase in tax he would request was a tax on the top 2% of incomes (those couples making over $250,000 per year [roughly $300,000 gross income] who only pay roughly 8% or 9% of their income in taxes).

The Republicans have refused to consider any increase in revenue, even though Dayton has come down from wanting a much larger increase in revenue as surveys indicated most Minnesotans wanted. Dayton's latest offer was to only increase revenue by $1.8 million and to accept large cuts in addition to the ones he had earlier proposed. But the Republicans insist on only doing cuts to services.

Thus we have a situation where the DFL Governor has compromised by offering to reduce his proposed income tax increase on the richest Minnesotans by well over half, while the Republicans have not budged a dollar on increasing the tax on the richest Minnesotans but at the same time are proposing to increase our property taxes by way over a billion dollars.

THE REPUBLICAN CLAIMS OF COMPROMISE ARE SMOKE AND MIRRORS

The Republicans have not offered a dime of increase in spending; they just keep offering shifts within the present spending.

Moreover, when they claim they offered to meet the Governor's proposal on spending on public safety and schools, they are again blowing smoke. As the lead Democrat on Public Safety, I was in on the meeting between Republican leaders and the lead for the Governor on the Public Safety bill.. The Republicans announced to the media that they were increasing their proposal on public safety by $30 million to meet the governor's proposal. All of the nitwit media are still repeating that even though it is clearly false. The fact is the difference was $61 million, not $30 million, so we pointed out at the meeting the falsity of their claim. Yet, they still make that false claim. I've been informed that the Republican numbers on education spending are also very misleading and that they are not meeting the Governor's proposal.

REPUBLICAN BUDGET WOULD HARM THOSE IN MINNEAPOLIS

The budget proposed by the Republican legislators would greatly harm those of us living in Minneapolis. There would be large cuts in the state funding for Minneapolis schools so that property taxpayers in the city would have to pay more to get the same services for each student. There would be large cuts in the amount of Local Government Aid the state gives to Minneapolis, so the property taxpayers would have to pay more to get the same services. The Republicans even want to put some of the state's prisoners in our local jails and charge our property taxpayers for the cost.

Additionally, Minneapolis has a higher percentage of people with disabilities and other reasons why they need services to continue their productive life, but the Republicans want to cut those services.

JOBS

The Republicans ran on a platform of creating more jobs. They proceeded to do the exact opposite.

First, they tired to throw about 35,000 public employees out of jobs. Then, they proposed to cut the health care industry by roughly $3.3 billion (over $1.6 of state and $1.6 of federal) which would cause enormous layoffs among health workers in the private sector. Just one of their cuts (the early M.A. program for non-senior adults) would cost over 20,000 nurses and health aides their jobs.

The Republicans claimed that lowering business taxes would create more jobs but almost no nonpartisan economist agrees. Even Ronald Reagan's economic advisor stated publicly in the media that during this recession it would be silly to lower taxes on businesses to create jobs because the reason businesses were not hiring new permanent workers was that they were unsure how strong the economy will be in the near future and they don't want to incur the expenses associated with extra employees if there's a downturn.

Republicans proposed to cut the state's Trade Office. Since that helps Minnesota businesses sell their products and services in other countries, those businesses and the Minnesotans they employ would lose jobs. The Republicans cut the funding for the offices which recruit businesses to locate in Minnesota. They cut the funding for youth employment (which is so important for at-risk inner city teens). They cut the funding which helps workers with disabilities maintain jobs.

MY OPINION OF THE LEGISLATIVE SESSION

This legislative session will go down in history as one of the least productive of all time. This was the first time in 38 years that the Republicans were in control of both houses of the legislature. They spent most of the session saying their bills did things they clearly didn't do. Many of the policy bills they passed (which was very few) just reiterated what is already in law. They spent a lot of time on bills which took away consumer rights. They proposed many far out bills, such as sentencing 10 year olds to life imprisonment. Another of their bills would have allowed people to shoot anyone they suspected might harm them, and the shooter wouldn't be held to the reasonable man standard, as is everywhere else in law. (Prosecutors said it would have legalized murder. They wouldn't hold hearings on most bills authored by Democrats. A lot of their time was spent trying to drive wedges between Minnesotans.

Most of my time was spent trying to keep the Republicans from harming the people in our community. I was able to stop a lot of bad proposals and get funding for some initiatives important for our northside. I was the first author of a bill to ban most of the new synthetic drugs which are so dangerous. Many young people are dying from them. In the end, most of my bill became law. As you know, I've been the leader on foreclosure legislation the past four years. This year, I couldn't get hearings from the Republicans on my foreclosure reform bills.

All in all, it was a very bizarre and frustrating session. It was much worse than when the Republicans were in control of the House from 1999 through 2006. At that time I disagreed with many things they did, but there were also various productive actions.