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Legislative News and Views - Rep. Eric Lucero (R)

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Minnesota’s Credit Rating Threatened

Friday, June 16, 2017

Dear Neighbor,


Wishing blessings and a special Father’s Day to all fathers.  May this coming Sunday be filled with warm and happy feelings and memories as we honor our fathers.

Over the last several weeks I’ve been attending multiple meetings and events around our community sharing highlights and victories of the recently concluded legislative session, including visits each of the five City Councils, Albertville, Dayton, Hanover, Otsego, and Saint Michael.  It's always a privilege to visit the Councils of the great cities I have the humbling honor of representing in the MN Legislature!

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Rep. Lucero visiting Otsego City Council discussing post-session legislative highlights.

GOV. DAYTON’S UNCONSTITUTIONAL ACTION

BACKGROUND

  • Near the end of May Gov. Dayton line-item vetoed the Legislative Branch’s 2018-19 operating budget, violating the Separation of Powers Clause in the Minnesota Constitution.  Beginning July 1, 2017, the Legislature will be without funding because of Gov. Dayton’ actions.
  • Article III, Section 1 of the Minnesota Constitution titled DISTRIBUTION OF THE POWERS OF GOVERNMENT creates the Legislative, Executive, and Judicial branches as separate and equal branches of government.  The constitution states no branch “shall exercise any of the powers properly belonging to either of the others except in the instances expressly provided in this constitution.”
  • By vetoing operating funding for the House and Senate Gov. Dayton is attempting to coerce the House and Senate to undo bills Gov. Dayton had just signed into law.  In doing so, Gov. Dayton abused his authority by adding he will restore funding only if the Legislative Branch passes bills he wants.  These actions are a clear attempt to “exercise power properly belonging to another branch.”
  • The hypothetical equivalent hostile action by Gov. Dayton against the co-equal Judicial Branch would be Gov. Dayton saying to the courts, “I’ve vetoed your funding and the condition I place to get your funding restored is for you decide court cases the way I want you to.”
  • Gov. Dayton’s five demands in exchange for calling a special session to restore funding to the legislature are: reversing three tax cuts and revising two policy provisions that improve teacher licensing and prohibit drivers licenses for illegal immigrants.

WHAT OTHER DEMOCRATS THINK OF GOV. DAYTON’S ACTIONS

  • Current State Rep. John Lesch, DFL-St. Paul, said his “constitutional ears perk up” when he learned of Gov. Dayton’s veto.  “I can tell you this: The courts will absolutely entertain the Republicans’ claims that it is an unconstitutional separation-of-powers violation,” said Rep. Lesch.
  • According to former State Rep. Ryan Winkler, a DFL member previously representing Golden Valley area, “The line-item veto I think is questionable.”
  • Both current Rep. John Lesch and former Rep. Ryan Winkler are lawyers.

LEGISLATIVE REPUBLICANS’ ACTIONS SEEK TO DEFEND THE CONSTITUTION

  • Because Gov. Dayton’s actions are clearly unconstitutional, because the Legislative Branch represents the people’s voice, and because the people’s voice should not be stifled by Gov. Dayton, the Minnesota House and Senate filed suit in Ramsey County District Court Tuesday this week against Governor Dayton and against Minnesota Management and Budget Commissioner Myron Frans.
  • “Gov. Dayton violated the separation of powers clause of the Minnesota Constitution when he line-item vetoed the Minnesota Legislature’s funding,” the suit says. “The vetoes impermissibly control, coerce, and restrain the action of the Legislature in the exercise of its official and constitutional powers.”
  • The Legislature has hired partner Doug Kelley of the Kelley, Wolter & Scott P.A. law firm to represent us at a cost of $325-an-hour.

DEMOCRAT GOV. DAYTON’S ACTIONS SEEK TO DEFEND HIMSELF

  • Gov. Dayton has hired former Minnesota Supreme Court Justice Sam Hanson to represent the Executive Branch and the Minnesota Department of Management and Budget.  Attorney Sam Hanson’s background includes having been appointed to both the MN Court of Appeals and the MN Supreme Court by former Gov. Jesse Ventura but now works as an attorney in private practice with the Briggs and Morgan law firm and will be charging MN taxpayers $506.25 per hour to defend Gov. Dayton’s unconstitutional actions.
  • Attorney General Lori Swanson last week stated her office normally would be involved in a case like this.  “Typically, the attorney general's office does defend and provide representation to the officials of the government, but we have to see the lawsuit first,” Swanson said.
  • The fact the Attorney General is not involved is definitely drawing attention.  According to Carleton College political scientist Steven Schier, “The attorney general is usually the governor's lawyer.”  The fact Minnesota Attorney General Lori Swanson is not representing Gov. Dayton causes Steven Schier to pose the question, “Did the attorney general discuss this with the governor and decide this was not a case worth pursuing by the attorney general?  If so, why? A lot of questions there.”

CONSEQUENCES

  • Gov. Dayton's unconstitutional actions which he admits was “his idea to veto” do not exist in a vacuum but instead come with risks and consequences to hardworking MN taxpayers.  Gov. Dayton’s actions may likely also result a disastrous impact on Minnesota’s credit rating.
  • The funding Gov. Dayton vetoed also included $8 million in annual bond payments for the Senate Office Building.  Gov. Dayton’s veto of the funding will now prevent the monthly payments to the state on those bonds resulting in the potential the Senate could default on the bond and hurt Minnesota’s bond rating.
  • Gov. Dayton’s own Minnesota Management and Budget (MMB) has in the past themselves warned failure to pay appropriation bonds (similar to the certificate of participation bonds used to finance the Senate Office Building) would cause “substantial adverse publicity in national and local media, with the possibility of regulatory investigations and investor lawsuits.”  Failure to make monthly lease payments will be a significant problem causing even higher interest rates and borrowing costs to taxpayers for the 2017 Bonding Bill which just passed in the amount of approximately one billion dollars.
  • Gov. Dayton's veto has indeed caught the attention of the credit ratings agencies.  Thursday this week, Standard & Poor’s Global Ratings, one of the bond rating firms that evaluate states’ credit worthiness, put Minnesota on a “CreditWatch with negative implications.” S&P stated their chief concern was whether Minnesota will be able to continue to make payments on the new Senate Office Building and the possibility of a default on that loan.  Moreover, S&P stated Minnesota defaulting on the loan would likely cause them to “lower our ratings on the state as well as associated ratings by several notches.”

NEXT STEPS

  • Nothing good is to come of Gov. Dayton’s unconstitutional actions.  The first court hearing in the case is scheduled for June 26 before Ramsey County Chief Judge John Guthmann, a mere five days before the Legislature’s current operating budget ends.

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Rep. Lucero visiting Albertville City Council discussing post-session legislative highlights.

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 Rep. Lucero visiting Hanover City Council discussing post-session legislative highlights.

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Rep. Lucero visiting Saint Michael City Council discussing post-session legislative highlights.

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Rep. Lucero visiting Dayton City Council discussing post-session legislative highlights.

 

STAYING IN TOUCH

Mark your calendars Thursday June 29 11:30 AM to 1 PM for the Wright County Economic Development Partnership Annual Legislative Update located at Huikko’s Bowling & Entertainment Center in Buffalo where I will be joining Rep. Marion O'Neill and Sen. Bruce Anderson to discuss topics important to our communities.

As always please contact me to share any issues, concerns, or feedback you may have that will assist me best represent you.  The best way to reach me is by email at Rep.Eric.Lucero@House.MN or by phone at 651-296-1534.

Have a great summer!


Sincerely,
Eric Lucero

State Representative
District 30B
Albertville, Hanover, Otsego, Saint Michael, and the Wright County portion of Dayton

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