Baird Helgeson and Rachel E. Stassen-Berger
Minnesota's rebounding economy has brought the state a $1.08 billion surplus for the remainder of the two year budget cycle, according to a new state economic forecast.
That's good news for state leaders, who had pinned their hopes on the state steadily pulling itself out of the worst financial downturn since the Great Depression.
Gov. Mark Dayton said that he will not make any final decisions until he sees an updated forecast next year but if the state has extra money, he wants to cut new business to business taxes and give the middle class a tax break.
Some of the money is already out the door. The first $246 million must be used to complete repayment of the K-12 school property tax recognition shift. Additionally, $15 million will be transferred to the state airports fund, restoring money originally borrowed in 2008. This forecast completes repayment of all accounting shifts from prior budget solutions. That leaves a bottom line surplus of $825 million, budget officials said.
House Speaker Paul Thissen, asked about Dayton's idea of tax cuts if the surplus holds, says "we have to look at the whole totality" of the choices in front of them.Thissen, DFL-Minneapolis, said the DFL controlled House will consider the tax cut proposals but did not immediately embrace the idea.
"What's going to be better for growing Minnesota's middle class," Thissen said.
Senate Deputy Majority Leader Katie Sieben, DFL-Newport, said "it's too early to say" whether the DFL Senate would support ending the business-to-business taxes as Dayton proposed.
Senate Minority Leader David Hann, R-Eden Prairie, said that if Dayton follows through on the idea of tax cuts he would find a willing partner in the Senate Republicans.
Minnesota Management and Budget Commissioner Jim Schowalter said the forecast highlights the state’s recovery compared to the rest of the nation. On the national level, economists are seeing slower growth than expected and more uncertainty caused by continued political budget and spending showdowns.
Minnesota is “one of the leading states in the country in terms of economic performance,” Schowalter said.
Dayton says he would only follow through with his tax cut proposal if the state has a surplus in the forecast that will come out in February. Budget forecasts tend to shift significantly between those two economic predictions. (See history of those shifts here.)
Gov. Mark Dayton and other Democratic state officeholders picked up a new union endorsement.
The Minnesota Association of Professional Employees endorsed Dayton, along with Lori Swanson for Attorney General and Rebecca Otto for State Auditor.
“Mark Dayton has shown tremendous political courage to get our state’s economy growing again,” said Carrie Wasley, chairman of MAPE’s political action committee. “Throughout his first term, governor Dayton made tough decisions that benefit all Minnesotans, preserve our middle class, and get our economy moving in the right direction.”
Wasley said Swanson “has a proven track record of fairness and leadership on consumer issues facing Minnesotans.”
Of Otto, Wasley added: “Whether it’s providing oversight of state employee pension investments, identifying ways to make government more efficient or finding innovative budget saving solutions, Auditor Otto does not shy away from making the right choice for taxpayers – she has earned another four year term.”
The Minnesota Association of Professional Employees is a 13,000-member union of state employees.
Republican candidate for governor Scott Honour earned $1.7 million last year and paid about $636,000 in state and federal taxes, according to the federal tax form summary he voluntarily disclosed.
He earned far more than any other gubernatorial candidate and paid far more in taxes. Honour paid more in taxes than any of the other candidates earned, according to tax information others have released.
Honour, an investment banker, also gave far more to charity than any of his rivals. According to the federal documents, he contributed $78,876 to charity.
Honour joins DFL Gov. Mark Dayton as well as Republicans Jeff Johnson and Dave Thompson in voluntarily disclosing his earning, tax payments and charitable deductions. Republican candidate Kurt Zellers released some tax information but not what he gave to charity. Republican Marty Seifert refused to release his tax information.
In addition to his income tax payments, Honour also paid $147,083 in property taxes last year.
Honour has not said how much of his own money he will put into his campaign or if he will personally contribute.
Dayton, an heir to the Dayton's department store fortune, put more than $3 million into his 2010 campaign for governor in 2010 but has said he will not self finance next year's re-election bid.
Image: Scott Honour
Republican House Leader Kurt Daudt believes a state presentation on Minnesota's economy prepared for a legislative hearing strayed from factual to political.
"The presentation was designed to look like a re-election campaign advertisement for you," Daudt, R-Crown, said in a letter to DFL Gov. Mark Dayton Monday regarding the state Department of Employment and Economic Development's prepared testimony for a hearing last week.
Asked for a response, Dayton deputy chief of staff Bob Hume completely dismissed the accusation, calling it "ridiculous."
"The Governor would be happy to sit with Representative Daudt, or the entire GOP caucus, and enumerate the games and gimmicks that have been in past budgets," Hume said in a statement. "The bottom line is that Rep. Daudt doesn’t like the fact that the economy is improving because it doesn’t suit his political needs. We have good news to tell, and that’s what we’ve been doing."
The presentation, according to the House Republicans, included slides with titles like "games and gimmicks caused a budget roller coaster," "leveling the playing field for the middle class" and "reforming government through smart investments."
Shortly after the presentation began last week, Republicans objected to its tone.
"I'm not sure it was games and gimmicks," Sen. Dave Senjem, R-Rochester, said during the hearing. "I will tell you there were people on each side of the aisle doing the best job they could to try to make the system work in good faith."
Senate Minority Leader David Hann, R-Eden Prairie, said part of the presentation was "out of line."
House Speaker Paul Thissen, DFL-Minneapolis, said at the time that the committee should set aside the idea of taking credit or not for the state of the economy. To a request that the committee skip the presentation until it was stripped of partisanship, Thissen proposed they move forward with the facts.
Much of the slideshow ended up being set aside during the hearing but it still raised ire.
"The nature of the presentation makes the preparation and use of it an inappropriate use of state resources for campaign purposes," Daudt said in his letter on Monday. He said if the Dayton administration uses the presentation, House Republicans will take "any action necessary" to stop it.
In reaction to Daudt's letter, Thissen spokesman Michael Howard said the original presentation was off focus.
"The request to DEED was to deliver a presentation focused on the strengths and challenges facing Minnesota's economy in the future and their PowerPoint presentation didn't necessarily reflect that focus," Howard said in a statement. "That is why the CF moved away from the PowerPoint presentation and focused more on productive testimony."
See the presentation's slide show, as captured by the House Republicans, below and view the video of the hearing here. The DEED portion of the meeting starts about 1 hour and 12 minutes in.
This post was updated with reaction from Michael Howard, Thissen's spokesman, and Bob Hume, Dayton deputy chief of staff.
Some states pardon a turkey at Thanksgiving time. Not Minnesota.
Minnesota invites a turkey to the State Capitol, then looks around to see who needs a good meal.
"He's going to go to the St. Paul Salvation Army," Gov. Mark Dayton announced Monday morning, nodding down at the huge white bird eyeing him from a cage next to the podium.
The turkey is one of several the Minnesota Turkey Growers Association will be donating this holiday season. Dayton estimated the 36-pound bird will feed 80 people.
The donation is timely this year, as the state's food shelves brace for a cut in federal food stamp assistance, and possible deeper cuts to come as congressional negotiators debate billions of dollars in cuts to the program's funding in the Farm Bill.
The ongoing uncertainty around the Farm Bill is "cruel," Dayton said.
"They're taking away from the neediest people in the nation," he said. "These federal cuts are going to be beyond our capability, or any state's capability to absorb and make up the difference. It's a very, very difficult time for farmers...as well as food recipients. It's a cruel way to treat them in the holiday season."
One out of every 10 Minnesotans -- more than 500,000 people -- receive some form of federal nutrition assistance.
Minnesota is the nation's largest turkey producer. The association plans to donate enough turkeys to feed 12,500 people.
"That's a solid cage," Dayton complimented the turkey growers. Two years ago, the donated turkey made a break for it, but the 2013 bird stood calmly in his crate, blinking at photographers and sitting calmly while the governor patted his white feathers.
That's because this year's bird has been through turkey pardon boot camp. The Burkel family of Badger, Minn., raised the two birds that are heading to Washington, D.C., for an official presidential pardon this week. The family -- John and Joni Burkel and their five children -- groomed a group of their birds for the big day: playing soothing Vivaldi and John Mayer, getting them used to being handled and photographed, and even playing recordings from high school girls' volleyball games to get them used to crowd noises.
The two best-looking, best-behaved birds were sent to Washington, where they will check into a suite at the Willard Hotel, visit the White House and serve as holiday parade marshals at Disney World before retiring to a petting zoo. The third runner up? Well, at least he got to meet the governor.