Minnesota Matters Logo


Minnesota Matters

Lori Sturdevant on politics, policy and people in the Land of 10,000 Lakes.

Don't call House plan "Jesse checks"

"We've been through this before," Gov. Mark Dayton said Wednesday about the House tax bill, which proposes a $2 billion tax cut over the next two years and includes features that would keep cutting business property taxes for years to come. The DFL governor likened the GOP-designed bill to deep state and local tax cuts in 1999-2001 and recalled their aftermath -- a dozen years of state deficits.

Moments later, House DFL minority leader Paul Thissen continued the analogy, referring to the bill's $1,000 per person income tax exemption as "essentially a Jesse Check." The exemption would deliver Minnesota income taxpayers with average incomes about $70 per person in each of the next two years, then disappear.

Jesse Checks, named for then-Gov. Jesse Ventura, were a one-time sales tax rebate in 2000 that gave every taxpayer an average of $600. In Capitol lore, they're cited as an example of political pandering (the checks were issued shortly before the 2000 election) with little discernable positive result.

That legend tells it true. But permit one good word for Jesse Checks: They were a better deal for more Minnesotans than this year's exemption increase. That's because they were crafted as a sales tax rebate, not a change in state income tax liability.

The 2000 sales tax rebate reached Minnesotans who owed no state income tax; an exemption increase will not. And no portion of the sales tax rebate wound up in federal coffers. State income taxes are deductible for federal tax purposes. Cut one's state income tax, and the federal taxes one owes increase. In contrast, a state sales tax reduction does not alter federal tax liability.

If the personal exemption idea had been thoroughly vetted in House committees, the advantages of converting it into a sales tax rebate might have been weighed. Instead, that provision in the tax bill was seen for the first time on the day the omnibus tax bill was unveiled. I'd call that insufficient scrutiny for a proposal to take $265 million out of state coffers next year.


A belated State of the State

Gov. Mark Dayton's State of the State address Thursday had the traditional pomp and folderol and the obligatory assurance that "the state of our state is good."

But it lacked something it would have had, had it been delivered three months ago -- freshness. By waiting until only five weeks remain of the 2015 legislative session to give his customary message, Dayton turned his message into a summation of sales pitches he made earlier this year, and about which legislators' minds are made up.

Ideas that might have carried bipartisan potential in January sounded Thursday like a closing argument for this year's DFL agenda. The speech's sharply divided response in the House chamber -- DFLers on their feet cheering, Republicans sitting on their hands -- told the story.

No unexpected policy ideas were presented. It's too late in the session for new agenda items. But Dayton gave a strong push to a proposal he issued only two days ago -- an $842 million bonding bill, to be enacted this year.  And he raised the stature of one issue -- water quality -- by mentioning it nearly as prominently as the education and transportation improvements he seeks this year. 

I appreciated his call for "reframing the debate" that has run too long in state politics. Years of deficits and assorted troubles have allowed state politicians to habitually ask, "What must we do to save our state from disaster?" As Dayton said, that question is obsolete. Minnesota doesn't need an emergency rescue this year. Rather, it needs thoughtful answers to the question, "What can we do to create an even better future?"

As Dayton also noted, legislators should not postpone their answer until next year or the next election. Times are good now. But an aging population and shrinking numbers of working-age adults mean that "we are unlikely to see surpluses of this magnitude in future years," Dayton said. The one state government has this year should be handled with care.