Minnesota legislative session sets stage for fierce campaign battle

Democrats in charge of the state House and Senate will come to St. Paul on Tuesday to kick off a legislative session where they hope to fine-tune a winning message for voters — that DFL rule has produced more stable state finances, improved education and in general made life better for Minnesotans.

Republicans fighting to win back control of the House have their own story to tell: DFLers' unchecked power at the Capitol has wrought stifling and unnecessary tax increases and a wholehearted embrace of MNsure, the state's troubled health insurance exchange.

The intensifying partisan scuffle has already upped the political stakes for the legislative session. DFL legislative leaders are crafting a to-do list big on voter-pleasing initiatives, hoping to sidestep controversies that could strain factions within the party, like tax hikes for transportation, medical marijuana and copper-nickel mining on the Iron Range.

Republicans, however, are ready to highlight what they see as DFL vulnerabilities, including MNsure, the state health exchange; tax increases and a $90 million proposed Senate office building and parking ramp that they say epitomizes profligate spending.

Both sides know that as they work their way through issues, they must keep an eye on November, when Minnesotans will decide which party controls the House and who will win the governor's office.

DFL Gov. Mark Dayton, still recovering from recent hip surgery, is pressing hard for government streamlining that will convince voters that government services can be less aggravating and more efficient.

"I think we can make a lot of progress if legislators commit themselves to it," Dayton said in an interview with the Star Tribune.

The $1 billion question

One likely flash point that will come early: A projected state surplus of nearly $1 billion that could grow when the state's economic forecast is released on Friday.

Most legislators agree they should return some portion to taxpayers, but can't agree on how much. Even among the DFLers who control the House and Senate, there is little consensus on the options: Should they spend the rest on new programs or projects? Increase the rainy day fund? That is where things get murky and where friction points will be.

Dayton, with budget reserves filled, has already said he will seek nearly $600 million in selected tax breaks for a wide range of Minnesotans and businesses.

He and other DFLers want to repeal three new businesses taxes that their party passed last year, targeting warehousing and telecommunications equipment and repair. DFLers took major criticism from the business community for the taxes and some are eager to undo them.

Dayton also wants to better square up the state tax system with federal law, potentially saving taxpayers millions of dollars. He would expand the working family tax credit and eliminate the so-called marriage penalty, which raises income taxes for married couples. The administration also wants to provide tax relief for employer-provided adoption and school assistance, all measures that have enjoyed some degree of support in the Legislature. The governor is looking to eliminate the gift tax and simplify the estate tax, which have been sharply criticized.

"My goal has always been to promote fairness and focus on the middle class," he said.

GOP House Minority Leader Kurt Daudt blasted DFLers' desire to cut taxes as a brazen election-year gimmick. The party, he said, first muscled through unnecessary tax increases last year, and now want credit for giving it back.

"In a non-election year, Democrats act like Democrats," said Daudt, R-Crown. "In election years, Democrats act like Republicans."

Minimum wage a 'no-brainer'

DFLers are pushing for a dramatic increase in the minimum wage, possibly up to $9.50 an hour, and to spread around somewhere close to $1 billion in state-backed construction projects around the state.

The minimum wage hike "should be a no-brainer," said House Speaker Paul Thissen, DFL-Minneapolis.

Thissen said the House will build on last year's successes, with proposals to make the state tax system fairer and put more money into education.

"I do think we have a very good story to tell," Thissen said. "Republicans are framing this as being about the economy and I am glad to take up that question. There is no question that Minnesota is moving forward and making progress on a lot of issues that had stalled out."

Republicans stand ready to tell the rest of the story.

"They know they are going to get hammered on insurance reform," said Senate Minority Leader David Hann, R-Eden Prairie. "The execution is deeply flawed and I think they are going to pay a big price in the election this fall." MNsure has struggled through a disastrous rollout that included frequent crashes, hourlong waits and a shake-up in leadership.

Facing a late start to a session that will last only 12 weeks, legislators on both sides know they'll have to juggle policy and politics for the next few months. The balance of power in the House lies in a mere seven seats — the number it would take to flip the majority back to Republicans.

DFL legislators, particularly the new ones, are spending every free moment raising money and contacting constituents.

First-term state Rep. Joe Radino­vich, DFL-Crosby, is hosting town hall forums asking residents to talk about what they would like to see come from the session. Other DFLers, mindful of their vulnerability on the issue, are sending messages assuring constituents that MNsure is getting more Minnesotans covered while offering some of the lowest premiums in the nation.

"We cannot go back to the days where the insurance companies called the shots and Minnesotans paid the price," state Rep. Jason Metsa, DFL-Virginia, told constituents. "All Minnesotans should have access to high-quality insurance at an affordable price."

Republicans coming off sidelines

On the Republican side, several legislative candidates who spent years on the sidelines have finally decided now is their time, particularly in the handful of volatile political districts that tend to swing with the political winds.

"The time was right," said Jen Wilson, a Republican running for a House seat in Eagan. "There are a lot of complex and important issues, and I think now is the time to make my mark."

Some of them are speaking with a more moderate tone than the class of Republicans who won control of the House in 2010, hoping to make inroads among voters who leaned Democratic in the last election.

"The Democrats are over-reaching," said Dario Anselmo, a Republican running for a House seat in Edina. "I want to make Minnesota more competitive so we can grow the economy and pay for social programs. Yes, even Republicans want to pay for those."

Baird Helgeson 651-925-5044