Republicans in the Legislature are moving quickly to cut taxes and spending, ease regulations on businesses, provide hundreds of millions of dollars in subsidies for health insurance companies and shift transportation money from the metro region to greater Minnesota.
Now in full control of the state House and Senate, Republicans passed a series of spending bills last week — with more coming this week — that seek to undo the policies and political legacy of Gov. Mark Dayton. More broadly, after seizing legislative majorities last year they are offering voters a preview of what Minnesota government would look like under total GOP rule, as Dayton prepares to leave office at the end of next year.
“We want to prioritize what we think Minnesotans want. For us that means tax relief, roads and bridges, investments in education and those things that are core functions of government,” said House Speaker Kurt Daudt, R-Crown.
“And with the extra money, send it back,” Daudt said. The House voted to cut taxes by $1.35 billion on Thursday on everything from Social Security benefits to cigars.
Receiving less attention — but in some ways more far-reaching — is a move to slow the growth of government primarily by halting the expansion of public benefits like Medical Assistance, which is responsible for nearly one-quarter of the state budget.
“[Dayton’s] legacy is that he’s put more people on public programs than any other governor in history,” said Daudt, seen as a front-runner in the 2018 GOP contest for governor.
Dayton and his DFL allies have faced a multifront barrage from Republicans this legislative session: delaying and scaling back his clean water initiative; slashing money for Metro Transit; halting plans to expand prekindergarten. Dayton spokesman Matt Swenson pointed out that during the governor’s tenure Minnesota has added more than 260,000 jobs, boasted an unemployment rate at or below 4 percent for 32 straight months, and been ranked at or near the top in quality-of-life lists and business rankings.
“It’s a shame he’s trying to tear Gov. Dayton down, to promote his own 2018 gubernatorial prospects,” Swenson said of Daudt’s criticisms.
Republicans have control of the state Senate through 2020. In the House, the GOP’s hefty majority will be tough for the DFL to overturn in one cycle.
A GOP victory in the governor’s race could hand the party control over all of state government for the first time since 1970.
“This is the closest we’ve been. Ever,” Daudt said.
‘Get things done’
The GOP wants to win now by locking in tax cuts and money for roads and bridges — both to advance policy goals of Republican members and to reward loyal constituencies. But many GOP leaders are also looking to avoid a confrontation with Dayton, recalling the state government shutdown of 2011 and its political fallout for legislative Republicans, who lost their majorities in the subsequent election.
“In the end we’re going to work with the governor to get things done that can actually pass,” said Senate Majority Leader Paul Gazelka, whose caucus holds a one-seat majority. The Nisswa Republican has acted as a bridge between Dayton and Daudt, whose majority is larger, more experienced and more ideologically conservative.
Gazelka indicated last week that once the House and Senate have passed their first round of budget bills, he expects to craft deals with Dayton and DFL lawmakers rather than sending bills only supported by Republicans that Dayton would inevitably veto.
Values reflected in budget
But with the spending measures they’re now passing, Republicans are showing Minnesotans what GOP government looks like — and what it could look like after 2018.
House Republicans would spend about $13.7 billion on health and human services the next two years, the broad set of programs that care for the disabled, aged, sick and impoverished. That’s $1.9 billion more than the last two years but $600 million below what is called the “base,” or the money required to maintain existing services given new enrollees and medical inflation. Dayton would spend $14.6 billion.
“Budgets are your values,” said Sen. Jeff Hayden, DFL-Minneapolis, decrying consequences for the state’s neediest residents.
Rep. Matt Dean, the Republican chairman of the House Health and Human Services Finance Committee, noted that health and human services is a rapidly growing category of government spending, nearly one-third of state spending.
“It’s unsustainable in all 50 states, and we’re no different,” Dean, another potential Republican candidate for governor, said of Medical Assistance, the federal-state health care program for the poor and those with disabilities.
Favoring private sector
Republicans have shown a preference for the private sector to stabilize the health insurance market. They passed a law allowing for-profit health maintenance organizations to operate here, and last week passed a $542 million subsidy for health insurance companies to reduce premiums.
A Dayton plan to create a broader public option by expanding MinnesotaCare, the state’s subsidized health program for low-income residents, was not even given a hearing in the House.
The House education budget would slam the brakes on Dayton’s hopes for universal prekindergarten, stopping its expansion even as Dayton proposed $175 million to bring the program to 200 more districts.
Republicans have made a priority of shoring up Minnesota’s road network, the nation’s fifth largest. But they have resisted DFL efforts to raise the gas tax or create other new revenue to pay for it, trying instead to redirect state money to roads and bridges from existing sources. Their transportation plan also continues a long-standing Republican assault on light-rail transit and cuts $122 million in state funding for local transit services over two years.
The practical effect of cutting transit funding is to push transportation money out of the Twin Cities and into greater Minnesota.
Room to reduce taxes
Rep. Sarah Anderson, R-Plymouth — also occasionally mentioned as a candidate for governor — leads the House committee that crafts budgets for the governor’s office and agencies like Revenue and Management and Budget. Anderson cut 8.7 percent from the base budget.
All of the cutting on top of a $1.65 billion surplus gives GOP lawmakers some headroom to reduce taxes. The tax bill that passed the House last week cuts taxes for Social Security recipients, businesses that own property, wealthy heirs, smokers, taxpayers with college loans, parents saving for their children’s college, and a host of other groups. The Senate’s tax cut plan is smaller, dropping the state’s lowest income tax bracket.
“They got elected with their mandate, they like to say,” Dayton said. “And I got elected with my mandate. I won by 100,000 votes statewide. And we have very, very different views of how things should proceed. Stay tuned.”