Exhibiting a fine sense of timing – and maybe to make a point -- the U.S. Supreme Court picked Cyber Monday to announce that it would not take a case challenging states’ ability to apply their sales taxes to online purchases.
One might surmise that the justices were telling online retailers that if they’re big and powerful enough to get their own named shopping day, they don’t deserve a sales tax advantage over their bricks-and-mortar competitors. Not in New York, anyway.
But as often happens when the high court chooses not to take a case, the consequences of Monday’s refusal to take up Amazon’s appeal of a New York appellate court’s decision are mixed and the message muddled. Left in force is a 1992 dawn-of-the-internet Supreme Court decision that says online retailers must have a physical presence in the state to be required to collect and remit state sales taxes.
The New York law, which was preserved by the high court’s inaction Monday, says that the presence of sales or advertising affiliates in a state is sufficient presence, or nexus, to make a sales tax collection requirement legally permissible. This year, the Minnesota Legislature enacted a requirement similar to New York’s.
But that leaves Amazon free to do what it did in Minnesota. Within weeks of the law’s enactment, it ended its relationship with its Minnesota-based affiliates, denying them revenue so that it could continue to dodge tax-collecting responsibilities. Nationwide, 45 states have sales taxes; Amazon collects them in only 16, Minnesota not among them. It's why the new "affiliate nexus" tax is expected to show very little new revenue for Minnesota when the next state revenue forecast is issued on Thursday.
Only Congress can bring uniformity and some needed fairness to state taxation of online retail sales. The U.S. Senate has passed the Marketplace Fairness Act that would allow states to collect sales taxes from online retailers with annual sales in excess of $1 million. That bill, which would have added add an estimated $23.3 billion to state coffers in fiscal 2012, is stalled in the U.S. House. The surge in online shopping that Cyber Monday brought this year will run up that number – and ought to run up congressional interest in that bill.
Minnesota’s lower-than-average health costs are often traced to sources ranging from the quality of its medical care (think Mayo and the University of Minnesota) to the Clean Indoor Air Act of 1975 (thank you, Rep. Phyllis Kahn) to the local gene pool (all those long-lived Vikings).
A more important contributor may be this: Minnesotans believe in strong communities, populated by people who don’t lack for life’s necessities, and they are willing to expend effort to keep them that way. So suggested Health Partners CEO Mary Brainerd Thursday at a fundraising luncheon for Hearth & Hope: Women of Habitat, a subset of Minnesota’s chapter of Habitat for Humanity.
What’s a health care executive doing promoting a nonprofit dedicated to affordable housing? Brainerd explained that housing and health are powerfully linked.
She cited University of Wisconsin research that ranks living in a stable and prosperous community as more important than the quality of medical care as a predictor of good health and longevity. “Whether people live in stable housing, in neighborhoods where people own their homes, in families where people can take pride and live a stable life, makes a huge difference,” Brainerd said
Community assets such as the availability of living-wage jobs, healthful food and quality education even outrank behavioral choices such as exercise, alcohol consumption and smoking, she said, though that distinction is fuzzy. One’s community influences one’s behavior. For example, safe neighborhoods allow people to be physically active.
At a time when national policymakers are understandably focused on the changes being wrought by the Affordable Care Act, Minnesotans have an opportunity to think more broadly about how best to achieve health care’s goal – good health throughout a long life. Affordable access to medical care is necessary; Brainerd and Habitat for Humanity do well to note that it’s not sufficient.
A moderate Republican governor in a Democratic-leaning state wins reelection, and the national chatterers are ready to anoint him with the next GOP presidential nomination.
Remember 2006 and Tim Pawlenty?
Gov. Chris Christie of New Jersey is basking this week in the capricious national political spotlight, having clobbered a longtime legislative Democrat (shades of Roger Moe in 2002) to win a second term. He’s being praised for his outspoken candor and bipartisan pragmatism, and hailed as well-positioned for a presidential run.
If Christie agrees, he might want to take a lesson from the presidential quest of Minnesota’s former Repubican governor. Pawlenty too enjoyed national notice and presidential mentions after winning his second term in 2006, otherwise a good year for Democrats. He too was seen as a pragmatic Republican, conservative on social issues but susceptible to striking a deal on higher cigarette taxes – er, “health impact fees” – with DFLers in the Legislature.
But Pawlenty evidently decided that to play in the national arena, he needed to shore up his conservative credentials. As a result, not even a bridge collapse in 2007 or a massive budget shortfall in 2009 could get him to raise taxes. When he finally ran for president in 2011, he criticized former Massachusetts Gov. Mitt Romney for enacting a state health care exchange, something Pawlenty himself had proposed for Minnesota four years earlier, then dropped.
When Pawlenty’s presidential bid faltered, among the defects in his candidacy those same national pundits cited were continuing doubts about his sincerity as the deep-red conservative he said he had become.
Christie appears clever enough to know that his popularity rests in large part on his reputation for authenticity. If he really wants to be president, he should ignore calls to recast himself in a more conservative light.
Betsy Hodges had a solid lead among first-choice Minneapolis voters for mayor Tuesday night. But the celebration within the Hodges camp was reportedly muted. Clearly, supporters of the Minneapolis City Council member understood one key feature of ranked choice voting (RCV): A first-choice leader won't necessarily prevail -- not unless a large share of the second-choice votes of people who chose losing candidates for first place break her way.
The question that's undoubtedly nagging her campaign strategists while they wait for RCV ballot sorting to proceed: Did Hodges do enough to ask for second-choice support?
Former Hennepin County commissioner Mark Andrew, who was in second place among first-choice votes, and his backers had to be engaged in similar second-guessing. Might more have been done to forge alliances with other candidates in the quest for second-place choices? Should groups of candidates have become a de facto team, as seven lesser-known candidates attempted to do?
This was the second Minneapolis election to employ RCV. But candidates often seemed unsure of how to respond to its limitations and opportunities. They understood that attacking their rivals could be self-defeating, but they struggled to deliver distinctive messages without going negative. Many were slow to openly seek second-choice support. With 35 candidates on the ballot, forging alliances with other candidates was an obvious option that few exercised.
If Hodges' lead is confirmed as a win on Wednesday when the RCV second-choice sorting is done, she and her team will be hailed as masters of the new system -- and in demand to show future candidates how it's done.
Tuesday's debut of MNsure, the state's online health insurance exchange, is giving Minnesota Management and Budget Commissioner James Schowalter a mild case of jitters -- or so it seemed when we chatted Monday about the new insurance marketplace he headed in its early stages.
Schowalter turned over MNsure's reins to an appointed board of directors in mid-August. But it was his baby long enough for him to be mindful of the pains associated with the birth of a large government undertaking.
Social Security's start in the mid-1930s, Medicare and Medicaid's beginning 30 years later, and the rollout of Medicare Part D for prescription drug coverage in 2006 all initially created confusion and some frustration for the people they aimed to help. "That’s the path of change. It takes a while for people to understand new systems," Schowalter said.
The saving grace for MNsure could be that "Minnesotans, in their hearts, are really patient and understanding. Within a few days of us getting started, people will find that health care will still be delivered, sick people will still get treated, and the health insurance market has expanded in a way that is good for everybody. We’ll sort it out."
The tightening labor market in Minnesota may tamp down any employers' impulse to use MNsure's arrival as an excuse for dropping health insurance from employee benefit packages, Schowalter added. Minnesota's 5.1 percent unemployment rate in August was the 10th lowest among the 50 states.
"Businesses are competing for talent right now. They'd have to think twice" before eliminating health insurance benefits for employees.
Businesses may find that MNsure is their ally, he said. It will allow small employers to offer their employees more options, while restraining costs for larger employers, who now pay an added premium for uncompensated health care for the uninsured.
Two months before President John Kennedy went to Dallas in November 1963, he had a pleasant overnight stay in Duluth. Next Tuesday, the 50th anniversary of a trip made precious in memory by the assassination two months later will be marked in a variety of ways in Duluth and remembered by other Minnesotans connected to that event.
One of those Minnesotans is Jack Puterbaugh of Minneapolis. Fifty years ago, he was a young staffer at the U.S. Department of Agriculture, working for then-Agriculture Secretary Orville Freeman, a former Minnesota governor. He was also an occasional advance man for trips by President Kennedy. That brought him to Duluth a few days before Kennedy's scheduled appearance at the Land and People's Conference, a multi-state meeting about natural resources sponsored by the U.S. Department of Agriculture.
And that brought him in touch with Sister Constantina of the College of St. Scholastica and her stained glass art. They're central to the story he shared with me last week.
Before he could even say hello to the event organizer in the host city on Sept. 20, future federal appellate Judge Gerald Heaney, Heaney announced, "The thing with the nun is out."
What thing? Sister Constantina Kakonyi of the St. Scholastica faculty, a Cold War exile from her native Hungary, had created a hammered copper and stained glass work of art to present to President Kennedy. Called "Northeastern Minnesota -- Strong and Beautiful," it includes five images in an oblong panel. She had made it for this conference as a gift to the president.
Heaney said Kennedy's policy was not to accept any artifacts as gifts.
Puterbaugh visited St. Scholastica, met the artist, saw the stunning work, and went back to Heaney. "It's really good, and we can't do this to the sister. We have to think of something," he said.
Several argument rounds later, the art was back in the program. Freeman would accept it on behalf of the president. But that plan was foiled when the band at the event struck up "Hail to the Chief" out of turn. The presentation had been inadvertantly skipped.
Back in Washington, Puterbaugh prevailed on the White House to send Sister Constantina its apology, which it did, with a photo of the president that Kennedy inscribed to her. He tried to get her work hung in the Department of Agriculture, without success. Instead, it hangs today at the St. Scholastica library, where it's bound to receive a little extra attention next week on the might-have-been anniversary of its presentation to a president.
Two months later, Puterbaugh was again an advance man for Kennedy. He was in the motorcade on Nov. 22, and saw the mortally wounded Kennedy carried into Parkland Hospital.
He wasn't as eager to share that story. I can understand why.
Photo: “Northeastern Minnesota – Strong and Beautiful,” by Sister Constantina Kakonyi, 1963.