Minnesota is coming to the end of a biennial budget that stands as a monument to bad financial management.
The government shutdown in summer 2011, and the budget it produced, imposed huge costs on taxpayers and the economy. The 2011 budget deal essentially extended the shortsighted fiscal policies — spending shifts and one-time fixes — that defined the tenure of former Gov. Tim Pawlenty.
The consequence was a financial sinkhole that continues to swallow the state’s future.
With that experience fresh in mind, you would think today’s leaders would be ready to make better decisions. But, instead, Gov. Mark Dayton and the DFL Legislature seem more interested in turning back the clock.
Why has it become so hard for politicians to make good decisions? Why has compromise become a dirty word? The often-cited influence of special interests is certainly part of the problem. But our ongoing fiscal crisis has also become a breeding ground for many bad decisions. In the world of politics, crisis isn’t an opportunity for innovation, as it should be. It’s too often cause for timidity.
For example, most economists agree that Minnesota’s current tax system is unsustainable. Today’s economy is based in service, not manufacturing; the population is growing older, and we compete in a global marketplace in which capital is highly mobile. A tax system based on the world as it existed in the 1970s is a tax system on the brink of crisis.
Thoughtful decisions to drive true reform take a willingness to invest political capital — to engage audiences in understanding the “why” of reform, not just the “what.” Revenue Commissioner Myron Frans understands this reality. To his credit, he spent much of the last year having conversations with Minnesotans about tax policy.
Many of his proposals were included in the governor’s initial budget. Though some of his tax policy ideas were questionable, the stage was set for a meaningful debate. Yet, Dayton’s reform proposal had a life span of about six weeks. That leaves Minnesota with a status quo that is not working and proposals that may make the situation worse.
The second cause of bad policy is the process in vogue with today’s dealmakers. Rather than starting discussions on the basis of shared principles, politicians start with narrow and absolute solutions. Dayton won’t budge from his tax-the-wealthy plan, and Republicans remain committed to their no-new-taxes mantra.
The outcome of this showdown satisfies no one. The laudable GOP goal of a lower-cost government has actually led to higher local property taxes and taxes masquerading as fees. Dayton’s high-profile goal of a more progressive tax code has delayed a needed conversation about the inequities and inadequacies of our current tax system.
The irony is that both parties want a tax system that promotes investment, is transparent and is simpler. There’s a lot of room for good outcomes in those shared goals. Rather than start at the point of disagreement — the size and role of government — why not begin on common ground? That may disappoint special interests, but it is more likely to produce good policy.
The third hurdle on the path to good decisions is that many political leaders are not grasping the good-government potential of information technology.
Technology provides the means for individuals to design health coverage, education and retirement plans, and other services. Isn’t it time for government to give people good information, allow them to share in the governance of services and programs that affect them, then trust them to make decisions that are right for them and their families?
Producers of consumer goods and services have already moved in this direction. Think “Flo,” the pitchwoman who provides all the tools and information people need to custom-design insurance policies. In many arenas, the “voice of authority” — so-called experts dictating narrow solutions — is being replaced by the “voice of understanding.” It’s time for government to enter this new world.
Building a better future for Minnesota requires leaders who think big about “why” reform is needed and who challenge us to move beyond the status quo. It requires abandoning simple slogans and broadening the discussion to the realities we face and the results we seek. It involves bringing government into the modern era through information technology that connects and empowers the citizenry.
In short, a better future requires a different path than the one we are on.
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.