These days in Minnesota, miracle-making is on ice

  • Article by: STEVEN DORNFELD
  • Updated: May 14, 2011 - 8:20 PM

A look at the 1971 'Minnesota Miracle,' why it would be unlikely to happen today and why, given the results, it might not have been so spectacular after all.

August 13, 1973, TIME magazine cover shows then Minnesota Gov. Wendell Anderson in a block of ice. Photo taken by Dan McCoy. Photo illustration by Bruce Bjerva/Star Tribune/iStockphoto

Forty years later, it's almost impossible to imagine -- a new DFL governor convincing a Republican-controlled Minnesota Legislature to approve a dramatic increase in state taxes.

No wonder they called it the "Minnesota Miracle."

The impact of Gov. Wendell Anderson's 1971 school finance legislation may not have been as miraculous as some nostalgic Minnesotans believe. But the fact that it was enacted says a lot of about how the state's political landscape has changed.

Anderson, a 37-year-old state senator from St. Paul's East Side, was elected governor in 1970 after pledging to boost state support for K-12 education. The goal was not only to reduce schools' dependence on locally collected property taxes but also to narrow disparities between rich and poor school districts.

At the time, the state funded 43 percent of local school operating costs. Anderson proposed increasing state support to 70 percent by raising just about every tax in sight -- on individual and corporate income, inheritances, utilities, banks, liquor and cigarettes.

The cost -- $762 million a year -- represented a whopping 37 percent increase in the state budget from the previous biennium.

Anderson ultimately secured passage of a compromise bill that raised state taxes by $580 million and boosted state support for schools to 65 percent of operating costs, slightly shy of his original goal.

But his victory did not come easily, or quickly. In 1971, both houses of the Legislature were controlled by the Republican-oriented Conservatives. (State lawmakers were elected on a nonpartisan basis until 1974, though most members of the "Conservative" caucus regarded themselves as Republicans, and most "Liberals" were DFLers).

The compromise was forged after Anderson vetoed the Conservatives' first school aid bill and hung tough through the longest special session in state history -- 157 days. Interestingly, in contrast to later capitol stalemates, neither side ever threatened a government shutdown to strengthen its bargaining position.

For me -- then a 23-year-old reporter covering my first legislative session -- it was quite an initiation. The issues were complex, the debate was intense and the stakes were huge.

When the regular session concluded in May without an agreement and I had to report for National Guard summer camp, I feared I would miss the conclusion of the drama. Not to worry. When I returned to work, nothing had changed. All summer and fall, I helped stake out closed-door bargaining sessions until an agreement was finally reached. By then it was October.

So how was it achieved?

1. Property taxes were a major concern for nearly everyone.

In the mid- and late 1960s, Minnesota ranked among the top five states in property taxes per capita (compared to 21st in 2008, the most recent data available). In 1967, the Conservative-controlled Legislature had enacted Minnesota's first sales tax and used much of the revenue to provide property tax relief to homeowners. However, this relief quickly evaporated as local property taxes shot up an average of 17 percent annually between 1969 and 1971.

During the 1971 session, an angry crowd of more than 1,400 people packed a legislative hearing held in the St. Paul Armory and demanded relief. "You want to confiscate my house and throw me out," a 74-year-old homeowner complained.

2. Support also had been building, albeit more quietly, for school finance reform.

A series of studies in the late '60s raised concerns about the revenue disparities between property-rich and poor school districts, and urged state action to reduce these disparities. In the fall of 1970, as the political campaign was heating up, the Citizens League issued its report on the topic and held a gubernatorial debate to focus public attention on it. Anderson embraced the report's recommendations, while Republican candidate Doug Head warned they would erode local control of schools.

3. The new governor provided critical leadership.

In December 1970, a statewide poll showed that Minnesotans opposed Anderson's plan 60 percent to 25 percent. But Anderson, youthful, telegenic and articulate, proved to be an effective salesman. He traveled throughout the state touting his plan and capitalizing on public concern about property taxes.

His personal and political skills have been unsurpassed by any governor since then, including the current incumbent. DFLer Mark Dayton has a less-than-commanding presence, he sounds like he's gargling with oatmeal, and his fiscal objective -- balancing the state budget -- is decidedly less glamorous than reinventing the state's system of school finance.

4. Anderson had the support of many moderate Republicans.

Senate Majority Leader Stanley Holmquist, a Conservative from Grove City, was a key player. Himself a former school teacher, principal and superintendent, the courtly, bespectacled senator shared many of the governor's concerns about school funding and equity.

But Holmquist wasn't alone. The Legislature was populated by a number of moderate Republicans who did not see government as the enemy. In the late '60s and early '70s, they passed bills creating the state Human Rights Department, the Pollution Control Agency, the Metropolitan Council, the Fiscal Disparities Act (the metro area's unique tax base-sharing law), and even the first public employee bargaining rights.

In today's Republican-controlled Legislature, it is doubtful that any of those measures could be enacted.

• • •

So what has changed?

Like Congress, the Legislature has become much more partisan and polarized. Most moderates have been driven out of the two major parties. Political compromise has become elusive, if not extinct.

"Each party has seen single-issue activists become more influential and pull each party further from the center," says Larry Jacobs, director of the University of Minnesota's Center for the Study of Politics and Governance.

Republicans also have become much more skeptical about the role of government. Many share the view of Ronald Reagan, who once observed, "Government doesn't solve problems; it subsidizes them."

However, when it comes to the issue of school finance, there's reason for a little skepticism about the "miracle," which has proved enormously difficult to sustain. Despite the regular infusion of more state revenues, the Legislature had difficulty maintaining two-thirds state funding of schools.

And the cost was great. An analysis by the Minnesota Taxpayers Association found that during the first decade after the passage of the 1971 legislation, property tax collections increased by just 47 percent, but all other state and local taxes rose by nearly 171 percent.

How much the legislation did to improve education or student performance also is open to question. For the first time it provided additional aid to school districts based on the number of disadvantaged students they served, greatly benefiting Minneapolis and St. Paul.

Today, the core city school districts receive 20 percent to 40 percent more state aid per pupil than do most of their suburban counterparts. Yet the socioeconomic achievement gaps persist.

In 1998, the late John Brandl, a former DFL legislator and dean of the University of Minnesota's Humphrey Institute, wrote a book in which he urged policymakers to focus more on how programs are designed and whether they are achieving measurable results.

The title of the book is still good advice today: "Money and Good Intentions Are Not Enough."


Steven Dornfeld, former public affairs director for the Metropolitan Council, was previously a newspaper reporter and editor. He covered the Legislature for the Minneapolis Tribune from 1971 until 1980.


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