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E-Update

Rep. Mullery: 2012 Legislative Report

Dear Friends and Neighbors:

This is my annual report on changes in laws and budgets that affect our district. It’s important to get your input on our efforts at the Capitol. I often send out emails with up to date information or facts of special interest to our area.
If you are not on my e-mail list, please contact me: rep.joe.mullery@house.mn to be added to my contact list.

The last two years saw a drastic shift in the atmosphere at the Capitol. When DFLers were in the Majority, I was the recipient of Legislator of the Year from the Minnesota Police, National Alliance on Mental Illness, the American Legion and the Animal Humane Society. I was humbled to be recognized for the role I played in passing important legislation. I led the effort, with help from the county, which secured funding for the Lowry Bridge and Victory Memorial Drive improvements in addition to passing many policy laws which helped the Northside.

Much of this term we were on the defensive, trying to stop the extreme ideologues who gained so much power in 2010. Fortunately, over the years, I developed good working relationships with moderate Republicans who chaired some of the committees, which helped to get our local concerns heard. Governor Dayton’s office also played a key role on many of the issues important to the Northside. I lead the effort which placed provisions into law to help with tornado recovery. I worked with city partners to obtain state funding for the Plymouth Bridge and Wirth Park improvements.

The most important bill of this session was the bonding bill. The State's Economist said the best way for the legislature to create jobs was to pass a big bonding bill. When combined with last year's bonding bill, the total for the term is over $1.4 billion in construction projects. That ranks among the best of totals for two-year terms. Governor Dayton and the DFL legislators took the lead on this.

The stadium will also provide some construction jobs. In an attached report, I have included a page of facts about the stadium that were not widely known. There were many questions about whether the stadium package was good for the state. There were additional problems for the residents of Minneapolis and that is why I was one of the nine representatives from Minneapolis who voted against the bill. Only two voted for the measure.

Remember the Primary Elections are moved up to August 14. We encourage everyone to turn out and vote in whichever party's primary you choose. These are very important elections; they determine who will speak for you at the Capitol

I can best represent you if you let me know your questions, problems and opinions. Please fill out the survey on the back of this sheet.

It is my honor to serve as your state representative.

Sincerely,

Joe Mullery
State Representative


NEIGHBORHOODS AND FORECLOSURES
As your state representative, one of my main priorities was to focus on a major issue affecting the Northside - foreclosures and their effect on our neighborhoods. The DFL House Caucus leadership asked me to develop an extensive plan to combat foreclosures, which are spreading across the state (21,000 in 2011). We introduced the "Supporting Responsible Homeowners and Stabilizing Neighborhoods Act", which would have greatly expanded refinancing opportunities for homeowners, especially ones who had paid for decades and then lost their job, prevented needless foreclosures where the financial institutions were actually losing huge amounts compared to rewriting the loan, and requiring greater transparency and timeliness by lenders. I was honored to be chosen by our caucus to be the point person on the legislation, and the bill was part of our "Protect the Middle Class" package of proposals. Twelve of the 16 sections of the bill were from my work.

I also worked on several other bills to help neighborhoods and prevent unwise foreclosures. In a true gauge of grassroots cooperation, one piece of legislation was the idea of our community member Dan Hylton.

Unfortunately, these bills were met with resistance from the GOP committee chairs. Hopefully, we will be in the majority next year and can pass these important bills to protect neighborhoods and long-time homeowners.

HIRING AND CONTRACTING WITH MINORITIES
This is an extremely important issue for the Northside because so many minorities are out of work. I've been working on these issues for over a decade. Under Governor Pawlenty, there was little effort to recruit minorities for state employment and I suggested ways to eliminate barriers and expand recruitment. Under Governor Dayton, there have been great strides to hire minorities for state jobs and an aggressive effort has been made to increase the percentages of minority workers companies must hire in order to do business with the state. Despite my efforts to get important state agencies to contract with minority owned businesses, little was happening under Governor Pawlenty. Within months of taking office, Governor Dayton promised me his help. I’ve had meetings with his staff and agency staff to explain ways to effectuate our goals and there is now movement in the right direction. I’m part of the effort to work with many of the main state agencies to educate and encourage them about minority hiring and contracting issues, and I pledge to continue pressing them for compliance.

ILLEGAL DRUGS
In recent years, there has been an explosion in the number of dangerous synthetic illegal drugs created by chemical labs. Last year, I worked with the Bureau of Criminal Apprehension and the Board of Pharmacy to develop an extensive bill which would make a lot of the new dangerous drugs illegal and authorize the Board to have greater power to make these compounds illegal without having to wait for the legislature. Although there was almost no opposition, only a tiny portion of the bill passed last year. This year, a very similar bill was re-introduced and it passed. This is an important bill; these drugs are causing death and severe mental problems, especially among youth.

PREVAILING WAGE
I’m still getting recognition for stopping a Republican attempt to interfere with enforcement of prevailing wage laws. None of the unions, agency attorneys or legislators realized a bill was harmful, but I understood the problem and won the fight to defeat the effort to undermine the law. I have been fortunate to be the legislative leader on enforcement of prevailing wage laws for over a decade. All the changes over these years came out of the ideas of a small group I created and served on with an attorney and an agency staffer. Under our Republican governors we were not getting any extensive enforcement, except for MNDOT, which was required to enforce the law because federal funds are involved. With Governor Dayton’s support, and his commissioners as our partners, a number of changes I suggested will likely occur. In fact, I was honored to be the only legislator invited to participate in the training of agency staff.

DFL JOBS PACKAGE
As a co-author of a group of proposals put forward by our DFL caucus and the Governor, we were able to give tax credits to businesses for hiring veterans, recent graduates and those out of work a long time. The package set up funds for small businesses starting in Minnesota; allowed unemployment benefits for a person training with an employer; and FastTrac - a program to rapidly train people in our community colleges for filling jobs in vocational and technology fields where our state is losing employers and jobs because of lack of trained employees. I have been pushing for initiatives similar to FastTrac for years, and I authored a bill which would target the tax breaks especially to employ those out of work more than a year. The Republicans would not pass these programs. Because of my leadership on technical training, the number two person in the U.S. Department of Labor met with me for 1 ½ hours.

HELP FOR SMALL BUSINESS
A Republican chair had worked with Governor Dayton's Department of Employment and Economic Development (DEED) for over a year on a bill to give certain tax breaks for businesses which created jobs and constructed new buildings. It was similar to a Governor Pawlenty venture which excluded the metro and had many loopholes. The Republican chair announced that he would not allow any amendments. After meeting with him, I was able to convince him to amend the bill so it would also work in an area such as ours where there are many vacant commercial buildings. Unfortunately, the extreme Republicans later killed the bill.

HELP FOR MAINTAINING OUR NEIGHBORHOODS
I tried to help a non-profit trying to save our neighborhoods from the unscrupulous speculators who come in and buy a property cheap and then run a nuisance property. My bill would have allowed the land bank to take these lots and hold them until a responsible developer would build on them and in the meantime, the non-profit wouldn't have to pay taxes on them. The House Tax Committee passed it unanimously. Unfortunately, the Senate wouldn't even consider the measure.


General Laws Affecting You

CONSTITUTIONAL AMENDMENTS TO TAKE AWAY RIGHTS
The Preamble to the Minnesota Constitution speaks of establishing the constitution for civil and religious liberty, and begins with a Bill of Rights. However, the new Republican majority want to use the Constitution to take away rights and create divisiveness among Minnesotans.

Last year, Republicans put up for a vote an amendment to discriminate against gays and lesbians by preventing them from getting the rights of married people, even though many of them are living in loving families. I was part of the small legislative group organizing against the amendment and spoke strongly against it.

This year the new Republican majority put up for a vote an amendment that would take away the "sacred" right to vote. It would require a specific form of I.D. at the poll in order to vote. National studies have shown this will discriminate against the elderly, college students, and the poor. The leading Republican in the New Hampshire legislature even said that this type of legislation was needed to keep college students from voting because they tend to vote for liberals. Extensive studies have shown there is no need for this because there are very few illegal votes and most of those wouldn't be prevented by this. It also will invalidate or greatly restrict our absentee voting and same day registration. This proposal has been likened to the poll tax put on blacks in the South after they were freed. Since voting is one of our most precious rights, it should never be taken away from someone who has done nothing wrong.

STATE IS FACING $4.6 BILLION DEFICIT
Rather than real reform, the Republican leadership chose to push off dealing with the state's budget problems until next year. We now face a $1.1 billion deficit for the next biennium based on present law. And the inflation in costs just to keep present services will be $1.1 billion. Then, we owe the school districts $2.4 billion, which was borrowed from them in order to pay the state's present bills for operating costs. The total is $4.6 billion. Since there were deep cuts in the budget this biennium, can the state just keep cutting needed services, especially health care, or will we have to raise taxes substantially? We must also consider new initiatives which are needed, such as public safety, job training, affordable housing for working families, and other Northside needs. Unfortunately, the Republican attitude was to "put off till tomorrow". Their approach was similar to going out to eat every night at an expensive restaurant even though you can't afford it on your salary and piling up debt that you know you can't pay based on your predicted salary for the future, and then telling everyone you solved your budget problem. Republicans claim they solved the budget problem when all they really did was create a huge budget problem for the next biennium. Our state constitution was set up so government would take care of paying bills when they were incurred, namely this biennium, but instead the Republicans said we'll pay for present expenses in the future, by using accounting gimmicks.

FOR FIRST TIME IN HISTORY STATE ISSUED BONDS TO PAY FOR PRESENT OPERATING COSTS
In addition to pushing into the future the payment of expenses incurred this biennium, Republican leadership also chose to issue bonded debt obligations that have to be paid off for many years into the future. Never in Minnesota's history had a legislature issued bonds to pay for present operating expenses. Experts on governmental fiscal responsibility are very critical of this practice. Because of this and other ways the Republican led legislature pushed off responsibility to the future, the state's solvency rating was hurt and we will have to pay higher interest on all forms of state debt.

ALL REPUBLICAN EFFORTS TO REDUCE TAXES WERE FOR CORPORATIONS, MOSTLY LARGE ONES
The Republicans passed several tax bills this year, all aimed nearly entirely at reducing the property taxes for large corporations. Even though the Republican tax laws of last year created higher net property taxes for most middle and low-income homeowners and indirectly for renters, all Republican efforts to help property owners this year were to help large corporations. Last year they cut out over a half million dollars of homestead credit for homeowners, and cut the renters' credit, as well as cut local government aid, which helps cities reduce property taxes. DFL attempts to help these groups were completely rejected.

REPUBLICAN CLAIMS OF BAD CLIMATE FOR BUSINESSES AND OF HIGH TAXES ARE FALSE
In reality, when state and local taxes in Minnesota as a percentage of income are compared to other states, we rank in the lowest 40% of states. Moreover, according to an article in Finance and Commerce, Minnesota business taxes are 15th lowest in the nation, because we have so many tax credits and exemptions. MarketWatch named the Twin Cities area the fourth best community for business in the nation, and CNBC ranked Minnesota as the eighth best state for business. Most of us pay 12% of our income in state and local property taxes, but the 5% of Minnesotans with the highest incomes only pay 9% of their income in taxes. The DFL tried to correct this and to close the Foreign Operating Corporation loophole and other loopholes for large corporations.

GUNS, GUNS AND MORE GUNS
Unfortunately, the most powerful special interest lobby in the legislature is the National Rifle Association. The Republican chair of the Public Safety Committee, continually says that the best way to stop crime is to have everyone carry a gun. His emphasis on NRA-friendly legislation reflects that viewpoint.

That same Republican chair pushed through a bill which was a wholesale dismantling of our laws. The county attorneys indicated they would no longer be able to charge murder in most cases. Right now, and throughout history, the standard in law has been that a person who kills someone else has to act in a reasonable manner. It was always called "the reasonable man" standard. The prosecutor had to prove that the person who shot someone else was not acting in the way a reasonable man would act. Under this new proposal, the shooter would only have to claim that he believed he was threatened. If he alleged that, he couldn't be charged unless the prosecutor could prove the shooter really didn't believe he was threatened. Unless the shooter admits he didn't believe he was threatened, there would be no way to charge him. Moreover, a gun permit from any government in the world would suddenly be valid here, even if there were no background checks wherever they got the permit. I was the only legislator who pointed out the language of the bill would allow this. In reality, we are already protected in law. Researchers say no one has been convicted in Minnesota of killing an intruder in their home. I was chosen to be the lead speaker against this bill. Wisely, Governor Dayton vetoed this bill.

The gun lobby was successful in getting a law passed which required law enforcement departments to open up their gun ranges four times a year for anyone to go in and shoot. Police strongly objected because they aren't designed to control a bunch of people from the general public.

The gun lobby was also successful in getting a measure passed to allow gun dealers to possess silencers. The gun lobby claimed they were helping police by letting them test the silencers; however, police did not support the bill. Silencers are illegal, and will make gunmen even more dangerous and will evade our "shot spotters" network. They will be stolen.

ANTI-CONSUMERISM
The Republicans passed several bills that would have taken away consumer rights. One bill would have made it easier for debt collectors to go after individuals. Two bills would have made it nearly impossible for groups of consumers to join together to sue for fraud or misrepresentation by a business. Another would have made it impossible for workers to sue their employer for asbestos-related illnesses if there was a new owner of the company. I was one of the two members who led the fight against these. Again, we were fortunate that Governor Dayton vetoed the bills.

SPEEDING UP PERMITS FROM STATE GOVERNMENT
A bipartisan bill was passed which will greatly speed up the processing of requests for permits by businesses and set up one office to guide applicants through the process. Businesses are pleased but still have concerns about municipal governments.

SENIORS
The Republicans originally wanted to cut nearly $400 million in services for the elderly and disabled; in the end, they cut about $200 million plus $133 million for nursing homes. In spite of these disappointments, there were two good provisions; one made it a felony for a caregiver to intentionally deprive a vulnerable adult of necessary food, clothing, etc. The other allowed a disabled worker who is on medical assistance to continue working after age 65 and not have to dispose of their assets.

THE MINNESOTA VIKINGS STADIUM:

THE PUBLIC SUBSIDY PER TICKET IS $72
The total public dollars, including cost of construction, operating costs paid by the city (even though they don't own it) and debt service interest, is around $1.4 billion. There are 65,000 seats for ten games per year for 30 years. So the public is subsidizing each single game ticketholder by roughly $72 per game.

THE CITY OF MINNEAPOLIS IS PUTTING IN $467 MILLION, NOT 150 AS REPORTED
Even though the stadium will belong to The Stadium Authority (an entity controlled by the State), the city agreed to pay operating costs every year which will total $317 million, in addition to the $150 million the city is paying in construction costs. Moreover, although Minneapolis is putting in as much money as the State, the State gets the stadium use every day it's not used by the Vikings. The city gets no dates.

MINNEAPOLIS PAYS WHILE OTHERS BENEFIT
The half-cent sales tax is on purchases anywhere in Minneapolis. Studies indicate most of that revenue is paid by people living in our city. Yet, our tax will be used only for structures that mainly benefit suburbs and the State. Studies show most motels used by pro sports fans are in the suburbs, and the statistics for restaurants and bars and retail shopping are similar. Most of St. Paul's sales tax goes to community economic development. But we lost that right under the new law. We won't even get money for extra police and clean up. And, of course, the state gets 13/14 of the overall sales tax in Minneapolis.

THE VIKINGS CLAIM OF GREATLY INCREASED ECONOMIC BENEFITS AND TAXES DOESN'T STAND UP
Forbes magazine (one of the top business publications) stated, "Independent academic research studies consistently conclude that new stadiums and arenas have no measurable effect on the level of real income or employment in the metropolitan areas in which they are located. Feasibility studies for professional sports facilities often fail to account for the substitution effect. Individuals generally maintain a consistent level of entertainment spending so money spent on sporting events typically comes at the expense of cash spent in restaurants, on travel, and at movie theaters.” Respected economists who are not hired by pro teams, such as Noll of Stanford, Sanderson of U. of Chicago, Baade of Lake Forest College, Zimbalist at Smith and many others, plus Art Rolnick (formerly of the Minneapolis Federal Reserve Bank) completely debunk the claims of people hired by the pro teams. The claim of the team owner for one of the new stadiums was that there would be $238 million per year in economic activity. When an independent analysis was done, it showed there was so much corresponding lost economic activity that the public was spending $20 million per year in subsidies (which is far more than the net new tax revenues of $1.8 million per year). The teams always like to tout the development that occurred around Jacob Field in Cleveland; however, an independent study found that development that would have occurred in other parts of the Cleveland area didn't because of the development around the Field.

STATE TAXES WILL PROBABLY HAVE TO BE RAISED TO PAY FOR STADIUM
The state's way to pay for its share of the construction costs is a proposed tripling of the present amount of dollars people spend on pull-tabs and bingo. Most people don't believe that people will spend three times as much money on this form of gambling just because there will be electronic machines. If that huge increase doesn't happen, the state will either raise taxes or cut programs (usually health care) to pay for the stadium.

THE PUBLIC SUBSIDY COMPARED TO EACH THREE-YEAR FULL TIME CONSTRUCTION JOB WILL BE ROUGHLY $2 MILLION
If you take the total dollars the government will put into the project including construction costs, operating expenses, and payments of interest on the debt created, it is about 1.4 billion dollars. There will be the equivalent of about 750 full-time three-year construction jobs. That is over $2 million per job.

THE CLAIMED NUMBER OF INCREASED JOBS WAS VERY MISLEADING
When the state looks at subsidies for other businesses, it looks at the number of permanent jobs. However, for the stadium and other construction projects the figures quoted were for a person working one construction season. In other words, if a carpenter was hired to build a structure and it took him or her ten years, that would be called ten construction jobs. When the numbers of jobs estimated by the general contractor are broken down into a full time job for one person, the stadium will be equivalent to between 700 and 800 construction workers working full time for the three years it will take to build. It's good to create jobs but each three-year job will cost the taxpayers roughly two million dollars. Moreover, they kept claiming there would be 3400 ongoing jobs at the stadium. In actuality, 2800 of those are only on Viking game days (even that seems hard to believe---an employee for each 20 fans). Employing someone for 10 days a year, mostly at low-paying jobs, is not a great success. We weren’t told how many would be full-time permanent jobs. One group even claimed 50,000 jobs but their own numbers when broken down didn't come anywhere near that, even when factoring in possible tertiary and more distant effect jobs.

THERE WAS LITTLE CHANCE THE VIKINGS WOULD MOVE TO L.A.
The other NFL teams didn't want the Vikings to move to L.A. If they did, they would only pay the other teams about $200 million, whereas if the NFL puts an expansion team in L.A. the other teams will get about $1.2 billion. The proposals coming from L.A. have no public subsidy for the stadium---both use revenues to pay for the stadium and the team owner gets the excess profits.

THE CITY'S PARTICIPATION WAS CLEARLY IN CONTRAVENTION OF THE CHARTER AMENDMENT ENACTED BY VOTERS A FEW YEARS AGO
The Charter amendment prohibited the city from using city resources over $10 million (specifically including sales and other taxes and bonds) for financing professional sports facilities. Minneapolis officials claimed that the half-cent sales tax and the liquor and food, entertainment and lodging taxes in Minneapolis weren't Minneapolis taxes because they were collected by the state. I thought that argument was absurd. If that applied then Minneapolis property taxes wouldn't be Minneapolis taxes because they are collected by the county. Also, since Minneapolis gets the dollars how could they not be Minneapolis resources? In reality, the city sought the existing sales taxes and voted to have these put into effect, and it could not have been enacted without council approval (because the state constitution requires all taxes that are local taxes to be approved by the local city council). If the city's argument had been valid, then the protection in the constitution would not protect our city from having the state set up a new tax on everyone in Minneapolis and nowhere else and yet have the proceeds go entirely to other parts of the state. I knew the arguments were invalid and asked for an opinion from expert legal staff. When the people backing the stadium saw the legal opinion, they knew I was right and they put language in the law that overrode the Minneapolis Charter provision.

THERE WERE A LOT MORE CONSTRUCTION JOBS IN THE "BONDING" BILLS THIS TERM
The two bonding bills enacted this term carried projects that amounted to around $1.4 billion. That is one and a half times the stadium. Moreover, while there won't be many stadium construction jobs for the trades that are out of work until the third year, most of the jobs in the bonding bill are for this year and next (when we know there is high unemployment). Additionally, a higher percentage of the dollars for a project in the bonding bill actually go into the pockets of the construction workers, because on a stadium a much higher percent of the dollars go to expensive fixtures and materials, as well as attorneys, architects, engineers, etc.

WE LOST A SOURCE FOR ECONOMIC DEVELOPMENT OPPORTUNITIES
After Minneapolis paid off the bonds for the convention center around 2020, the city had the right to use its sales tax for capital projects for housing, culture, commercial and economic development throughout the city. We desperately need more economic development on the northside. In the stadium bill there is new language that takes that money after 2020 and applies most or all of it to the Vikings stadium, the Target Center and the convention center, not to economic development in our communities.

CONCLUSION
There is a fairly strong argument that from an economic standpoint, the Vikings stadium doesn’t make sense. I strongly support government programs to create jobs and/or boost our economy, but they should be designed to be effective and efficient. There are a lot more benefits that were given to the Vikings which would normally belong to the owner of the stadium (the government). And the Vikings talk about contributing to the construction and operations of the stadium, but that is in lieu of rent. On the other hand, there is definitely a value to the community to have the Vikings, both as a quality of life factor and maybe having a slight influence on the heads of some companies to keep their company here. But, I think the true facts should be looked at and balanced against the quality of life, while at the same time looking at the facts on whether the Vikings were likely to leave. Every year, the surveys from my constituents showed over 80% opposed to a large public subsidy for the Vikings stadium.