Jan 12 2010 Legislative Outlook

Legislative Outlook Holds Few Surprises. Budget Deficit and Jobs Top Priority Lists

Politics in Minnesota hosted a "Legislative Outlook," panel this morning, featuring House Speaker Margaret Anderson Kelliher, Senate Majority Leader Larry Pogemiller, Senate Minority Leader David Senjem and House Minority Leader Kurt Zellers. The event was moderated by TPT Channel 2's Mary Lahammer. Representative Zellers suffered a flat tire on the way to the Sheraton but arrived in time to fully participate in the discussions.

It wasn't much of a surprise that legislative leaders are in agreement on what the legislative session has in store and what the priority issues will be. Anyone who's paying attention knows the state's projected $1.2 billion budget deficit coming on the heels of last session's even bigger shortfall has to be a top priority. The state's structural budget problems and Minnesota's economy are going to be front and center. Everyone talked about jobs, which is (in a somewhat rare convergence) exactly what these illustrious leaders' constituents are talking about.
That the budget and jobs are top items to address is where the consensus ends, though. How best to deal with them, not surprisingly, broke down along party lines.

Moderator Mary Lahammer observed, "The old tax and spend argument." Senator Poegamiller took exception to the remark, but as the discussion unfolded, it was apparent that Lahammer's observation was apt. Some things never change. Democratic legislators argued that revenues (legislative code for taxes) have to be raised and resisted the idea that budget cuts are necessarily productive while the Republican leaders insisted that taxes shouldn't be raised in our current economic environment. They advocated spending cuts. Representative Zellers noted that workers in the private sector are facing layoffs and wage cuts while state employees are getting raises. He said there has to be some shared sacrifice.

Speaker Kelliher stated that her legislative priorities this session will be #1 Jobs, #2 Restoring GAMC (General Assistance Medical Care) funding, #3 the Budget, though education cuts are off the table in her mind. There was general agreement among the panelists on these priorities.

As to ideas, Rep. Zellers and Rep. Kelliher made statements as to what they weren't going to do. Kelliher said cuts to services were the same as a tax increase on the "most vulnerable" and familes earning less than $40,000. Zellers, while advocating "growing" our way out of the deficit said we can't give up-front equipment exemptions to businesses or cut corporate tax rates, because the money isn't there.

Senator Senjem said his priorities were to protect K-12 spending, nursing homes, veterans and public safety budgets. "Everything else," he said, "is open to cuts."

For jobs creation, Speaker Kelliher suggested following a the example of a Wisconsin government program called "The Network," which provides step by step assistance to start-up businesses. She said it could cost as little as $200,000.

Senator Senjem suggested more public support for bio-sciences at the U of M and Mayo clinic as ways to stimulate the state's economy. He said more U of M research would create a new stronger economy for Minnesota. Senjem also suggested that the legislature needed to focus on investing in areas he says Minnesota is strong in like renewable energy, citing biomass, wind and solar power as examples.

Senator Pogemiller said tax hikes wouldn't hurt the jobs market or revenues, citing Delta Airlines' recent move to increase bag-handling fees as an example of his reasoning. "Obviously, they wouldn't do that unless the market could bear it," he said.

Kelliher echoed Pogemiller's philosophy, saying "budget cuts don't keep jobs in Minnesota - History shows that the opposite is true."

Nobody wanted to talk about funding a new Vikings stadium. When the question was raised, each of the four panelists said it wasn't likely to be a priority and kept their answers short and vague. Senator Senjem and Rep. Zellers both mentioned a "Racino" as a possible funding source, but acknowledged such a plan wasn't likely to pass or be signed by the governor.
Another issue briefly addressed by Speaker Kelliher was election reform. She said a bill would probably advance to move the state's primary election up a month to comport with new federal legislation.

The one bright spot that stood out from the forum was a sense of general agreement that Minnesota's budget was structurally flawed and that a more permanent budget solution was needed, one that fundamentally reformed the way the state spends money. Senator Pogemiller summed up the notion saying, "We're in a state of denial about the budget. It's factual that we have to bring the cost structure down."

Cross-posted at Minnesota Majority. Comments welcome.