House Republicans lift the cushions to look for money

  • Article by: LORI STURDEVANT , Star Tribune
  • Updated: February 11, 2012 - 4:42 PM

A business tax reduction would be financed by a cut in the rental credit.

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Low income housing in Maple Grove -- New low income housing units for rent on Vicksburg Lane, south of 694 in Maple Grove.

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Word wafted through Rumor Central last week that House Republicans had found a dandy way to pay for the state business property tax phaseout they want to start this year.

The tale: They'd do it by eliminating local government aid to the state's four largest cities, three of which reliably vote DFL.

This time the rumor-peddlers appear to have it wrong. The House Rs aren't going after Minneapolis, St. Paul, Duluth and Rochester.

They're going after renters.

The business tax reduction they seek would be financed by a whack at the renters' credit, the property tax relief program for low-income renters. It would shave the credit by an average of $221 per year and eliminate it entirely for 74,000 households, the Department of Revenue says.

The Republicans already know what Gov. Mark Dayton thinks of both ideas. (I saved a copy of his May 24 tax bill veto letter, should their memories need refreshing.)

It's too early in the 2012 session to accuse the Legislature's majority of being less than serious about the business tax cut that headlines their jobs agenda. A lot of bargaining time remains.

But it's not too soon for business owners to wonder what's for real and what's for election-year show on the GOP list.

Real lawmaking involves efforts to satisfy gubernatorial concerns in order to secure the gubernatorial signature. There evidently was too little of that with four bills Republicans labeled "lawsuit reform" and Dayton called "a sop to large insurance companies" as he vetoed the lot Friday.

That some of those bills won some DFL votes suggests that negotiations with Dayton over their content might have been fruitful. None occurred last week.

For their part, some DFL electioneers are hoping the Repubs avoid talking to Dayton and send him a bill containing their renters' credit plan. That way, DFLers can rail this fall about how Republicans wanted to "sock poor renters in order to give a tax break to Wal-Mart."

Permit a loop back to the rumor about eliminating big-city local government aid: It was made plausible by decades of GOP complaints that Minneapolis is A) structurally inefficient; B) subservient to greedy public employees' unions, and C) incapable of improvement, no matter how much help it gets from state taxpayers.

That indictment might have held a few tablespoons of truth some years ago. It's less true today -- and the city has data, reams of it, to prove it. (Click the Results Minneapolis button on the city's website.)

For all those numbers and the smart way city government is using them, Minneapolis owes thanks to City Coordinator Steven Bosacker.

Bosacker announced on Feb. 2 that he's stepping down next month after six years at City Hall's administrative hub. It's a big loss. (He played a similar role as Gov. Jesse Ventura's chief of staff and, before that, for the University of Minnesota Board of Regents.)

Bosacker has been the prime moving force behind rigorous goal setting, performance measuring and strategic adjusting. On his watch, the city has improved things as disparate as police and fire response time, time required to issue business licenses, graffiti cleanup, boarded-up buildings -- you get the idea.

What's particularly impressive is that these changes occurred while the city was also losing LGA. In constant dollars, Minneapolis is slated this year to receive only 44 percent as much state aid as it was sent in 2001.

Not coincidentally: City property tax collections rose 35 percent (again, constant dollars) over the same period.

City employment is also down 10 percent in the past five years. And since policymakers wisely steered layoffs away from police and fire forces, the cuts have been brutal in offices like business information services (down 43 percent) and intergovernmental relations (45 percent) and human resources (20 percent). Those offices can't be squeezed any more, Bosacker said last week.

Financial pressure on local governments, or any bureaucracy, isn't all bad, Bosacker acknowledged. "The good side ... is that it has taught us to constantly evolve. We've been forced to eke out every possible efficiency."

But he wants legislators who favor more doses of the same tough medicine to see the downside, too: Forty years ago, "the LGA deal was that we would pool our resources and find a fair way to distribute them, so that basic services that should be governed at a local level could be provided adequately everywhere. That contract has been abridged. As a result, the trend lines for local governments are not sustainable. If (LGA's) trajectory isn't going to change, then it's time for a fresh conversation about local authority."

Local authority? That's code for allowing cities to raise their own income and/or sales taxes. The more LGA is squeezed, the more you'll hear about that idea.

Lori Sturdevant is a Star Tribune editorial writer and columnist. She is at lsturdevant@startribune.com.

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