In Minnesota, budget fight fed the feud

  • Article by: MIKE KASZUBA and BAIRD , HELGESON
  • Updated: July 28, 2011 - 8:23 PM
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Gov. Mark Dayton signed legislation on July 20 that ended the state’s shutdown.

Photo: Elizabeth Flores, Star Tribune

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The budget deal that ended the state government shutdown is also single-handedly reigniting what will be at least a 16-month, rough-and-tumble rematch in the bitter partisan battle over taxing and spending.

Far from providing a clear win, the deal seems only to have sharpened determination for victory in the 2012 elections, when Minnesota voters will be called on to tip the balance either to the DFL governor, or to the GOP-led Legislature.

"I'm not going to give up on this," Gov. Mark Dayton said of the tax increase proposal he campaigned on but was forced to withdraw. "I'm going to come back, if not next year, the year following," he said. "I'll advocate for it, campaign for it, press for it for as long as I'm drawing breath."

House Speaker Kurt Zellers, R-Maple Grove, says he is ready to start doorknocking now on what he considers the bottom line of the budget deal.

"We didn't raise taxes," he said flatly. "There are far more people who get the joke now. It's not about taxing rich people, it's about taxing small-business owners. ... That's not where a vast majority of Minnesotans are."

Before the state could even reopen totally, the brawling had spilled out of the Capitol and over to coffee shops, kitchen tables and partisan blogs.

"Republicans won a history-making victory," declared the Anoka County Watchdog, a blog published by Harold Hamilton, a conservative Fridley businessman. Republican legislators, he said, had stood firm during the shutdown, even though "they were harassed and pressured by the legions of special interests who feed at the government trough" and had "turned back a liberal governor's agenda."

Democrats have started gearing up, with detailed lists of what the latest round of borrowing will do to schools, cities, counties.

Sam McCullough, a political director for the Alliance for a Better Minnesota, said Republicans will have a difficult time defending a budget plan that relies heavily on borrowing and bonding to erase the state's $5 billion deficit.

"For Republicans to run on that and claim fiscal responsibility here, I think, will be a difficult message to sell voters in 2012," said McCullough, whose liberal group includes Alida Messinger, Dayton's former wife, as a financial backer.

More reforms

Rep. Joyce Peppin, R-Rogers, who chairs the House Government Operations and Elections Committee, says she, too, will be back to fight for changes. "Reforms are important," she said. "If they don't pass this year, I think we need to continue to look for ways to reform the state -- state government and education."

Fundamentally, she said, "I think we have an unsustainable budget."

Pat Anderson, a member of the Republican National Committee and a former state auditor, said that with both sides battle-scarred, next year could bring genuine compromise on badly needed tax reforms.

"The thought is that, you know, this will just deteriorate," Anderson said. "[But] I think you could see almost the opposite. They [already] dealt with the budget."

The two sides have already proved they can work together. Early in the session, Dayton and Republicans quickly agreed to streamlined permitting and regulation processes that would speed up business expansions, and they worked together on various education reforms.

At Dayton's recent meeting with school officials in St. Cloud, Sen. David Brown, R-Becker, offered Dayton some rare praise.

"Governor Dayton, one of your proposals was closing [corporate tax] loopholes," said Brown, one of the influential freshmen who helped Republicans move into the Senate majority. "I'm with you on that, Governor." The crowd applauded.

Scoring points

But the real battles will come over the size and scope of government -- a debate Democrats and Republicans have waged for years and which now has taken on the dimensions of a moral crusade.

"I am not going to persuade them, and they are not going to persuade me," Dayton said. "I tried my utmost for six months to convince them, and they had a united stone wall."

While there were plenty of political handicappers saying the Republicans won this round -- Anderson said they "got a good deal" -- there were others, even Republicans, who acknowledged that Dayton may have scored major points.

"I think Dayton gets an important victory because he looks pragmatic," said Dan Hofrenning, a political science professor at St. Olaf College.

"He looks as if he was the one who solved this. It makes him, I think, look a little bit more like an executive."

Dayton said he saw the landscape change in the two weeks after the shutdown began. Republicans, he said, would have held out forever, regardless of the consequences to the state.

"It was becoming a test of political egos as well as ideology," Dayton said. "That was becoming destructive for Minnesota. ... Someone had to take the initiative to break that stalemate. I did so. I consider that my responsibility."

Hofrenning and others said the political losers may wind up being more liberal DFLers who wanted Dayton to hold firm, along with more conservative Republicans disappointed that Senate Majority Leader Amy Koch and Speaker Zellers did not stand fast.

But Gregg Peppin, a Republican political consultant who helped shepherd more than 50 House and Senate races in 2010, said the next 16 months will create as-yet-unseen opportunities -- for both sides.

"There's so much game [still] to play here," he said. "There's so much yet to happen."

Staff writer Bob von Sternberg contributed to this report. Mike Kaszuba • 651-222-1673 Baird Helgeson • 651-222-1288

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