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The good and not-so-good in Dayton's budget
- Article by: Tim Penny, Tom Horner
- January 26, 2013 - 5:27 PM
The harshest criticism of Gov. Mark Dayton's budget proposals may already have come from Mark Dayton. Many of the tax reforms he proposes now are similar to those he attacked as a candidate in 2010. Campaigns matter. Read any sampling of blogs and comments from the political left, and they echo Dayton's 2010 anti-sales-tax rhetoric. Can the governor now get away with a "never mind"?
Still, his acknowledgement that tax reform is needed -- and long overdue -- is welcome, even if his specifics fall short of his own articulated goals: creating a tax system that is fair, sustainable and promotes economic prosperity.
It also is worrisome that despite his claims, the governor's budget fails to put the state on a long-term course of fiscal responsibility. In fact, he largely ignores two of the most significant cost drivers of Minnesota's future -- public pensions and caring for our aging population. He creates an unsustainable property tax subsidy, then applies it to all Minnesotans without regard to need. And, he proposes to increase the per-student payment to school districts while again postponing paying off the money the Legislature borrowed from schools to bail out past state budgets.
Part of Dayton's tax plan also undermines a key economic imperative -- creating and retaining good, well-paying jobs. Taxing business-to-business transactions will make Minnesota providers of professional services more expensive and less competitive nationally and around the world.
To a large degree, the governor's budget promises more government spending with little or no demand for reform or accountability. On that he will be criticized as offering a "sop" to his favored interests, the same critique with which he has dismissed so many Republican proposals.
This isn't to write off Dayton's budget goals out of hand. Though there will be criticism and controversy, Dayton does offer ideas worth debating. Democratic legislators would be wrong to accept the budget in its entirety, and Republicans will miss an opportunity if they reject the governor's proposals solely because they come from Dayton.
The governor has fulfilled his obligation to deliver a budget to the Legislature. Now, he should use his Feb. 6 State of the State address to go beyond his budget details and frame the debate that Minnesotans need to have about the role of government and the responsibilities of the people. Four themes, we believe, are especially important.
• First, Dayton should make the case of why true tax reform is needed for Minnesota's future prosperity. Dayton should use his platform to help Minnesotans understand that in today's world, capital, jobs and people are highly mobile. A debate defined only by the extremes of "tax the rich" and "no new taxes" is a dead end. Tax reforms must be measured by whether they make the system more fair and transparent; whether they make Minnesota more competitive in the global competition for capital; whether they reflect demographic and economic trends, and whether they are a catalyst for more spending on job-creating initiatives. Tax reform isn't so much about more revenue as it is about promoting greater prosperity.
• Second, the State of the State address should redefine what it means to be fiscally responsible. Gov. Dayton should call for a new fiscal conservatism that includes transparency in how public money is being spent, accountability in tying spending to specific outcomes and elimination of government programs that aren't working. Saying "no" to wasteful government is more emphatic when it comes from a liberal. With a tight budget, Dayton can have a huge impact by advocating for smarter spending -- not just more spending.
• Third, the governor could win bipartisan agreement by showing the courage to say what everyone knows. Personal behavior matters. Certainly, government should help people at times in their lives when they are vulnerable. But those who live recklessly or who make lifestyle choices that depend on public support need to stop expecting taxpayers to bail them out.
• Finally, Dayton should better define the really big questions that are critical to Minnesotans' future. He must ask Minnesotans to expect more from higher education -- looking at everything from two-year schools to lifelong learning -- and also ask what we are willing to pay to get the results we seek. He must ask Minnesotans to admit that -- especially as President Obama's health exchanges expand coverage -- containing health costs while ensuring quality will be ever more important.
Answering these and other critical questions will require legislators, especially the governor's DFL colleagues, to stop thinking small. They can't adopt the prevailing view that Republicans lost their majorities in the state House and Senate last fall because they "overreached." In our view, Republicans lost because their reach fell short.
The State of the State address will provide Dayton an opportunity to define a bolder reach. Minnesotans want a state of equality, opportunity and innovation -- and a governor who can lead us toward that future.
Tom Horner is a public-affairs consultant and was chief of staff to former U.S. Sen. Dave Durenberger, R-Minn. Tim Penny is president and CEO of the Southern Minnesota Initiative Foundation and is a former Democratic member of Congress. Both are former Independence Party candidates for governor.
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