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I got my latest Taxpayer's League e-mail. Of course, they trashed the just ended legislative session. However, I guess this must be a social welfare benefit for Minnesota, because the Taxpayer's League is classified as one of those IRS targets - the 501(c)4.

But here is something I did not know - the following came with contribution request (pay attention to the last line) ....

P.S Don't forget that as a 501(c)4 Non-Profit, the Taxpayer's League is able to accept corporate donations and we are not obligated to file disclosure statements about our donors. You can make a tax-deductible (approx. 90%) corporate contribution to the Taxpayer's League of Minnesota through your business using the link below!

Hmmmm...

To classify the Taxpayer's League as a "non-political" entity is a tough carrot to swallow, but they have maintained this status for years.

The idea that a corporation can give them a huge sum of money....and never have to have their identity disclosed, AND IN ADDITION, they get to deduct that same contribution from their tax liability.

Wow.

That, ladies and gentleman, is a tax provision with balls.
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(Note: The following is my own opinion based on observations regarding this legislative session.)

If you want a good read regarding the last minute negotiations between the House and Senate in the final day, then check out Brianna Biersbach's article in Politics in Minnesota (may be firewalled).

This article talks about the conflicts that occurred, but quite frankly, the whole problem centers around 1 person - Majority Leader Tom Bakk. This session should have been a chance for a lot of DFL priorities to get a full hearing....and in the end, most of them did. But the petty shenanigans that seem to abound within the Majority Leader's office nearly derailed a good session.

Let's look at the evidence.

1) Legislator Pay - I agree that the legislators are underpaid, but to focus on the issue like Bakk did, was totally unecessary. The House has to go before the voters again in 2014 and a legislative pay issue was the wrong item to bring forward. In the end, the issue was finalized as a Constitutional amendment vote for 2016. As far as I'm concerned, it was unecessary baggage.

2) Business to Business Taxes - Although I would support a broader sales tax expansion....Dayton decided to pull the plug on his plan early in the session. Bakk brought it partially back after the controversy had been allowed to die...and then chose some very controversial items to move ahead with. The tax chairs (House - Lencewski and Senate- Skoe) were in a long drawn out conflict about it. And an exasperated Lencewski couldn't seem to figure out which way the Senate conferees wanted to go....

The tax bill also proved a source of headaches in the 11th hour, particularly a provision that would apply the sales tax to farm machinery repairs, which would raise $28 million in the next biennium. The Senate came to Lenczewski to tell her the provision was a mistake, but she insisted that conference committee members were adamant about its inclusion. She was uninterested in reopening the tax bill to accommodate the Senate. ?The Senate insisted on it, and now they?re saying it was an error,? Lenczewski said with about five hours before adjournment on Monday. ?They?d like us to open the tax bill to fix their problems.?

To have that kind of confusion in the final hours was nearly a disaster. The whole thing was unecessary and, quite frankly, is not going to produce enough revenue to warrant its inclusion. It WAS a mistake, but now its there. Watch for a correction next year. Unfortunately, this foolishness will give the GOP a new talking point.

3) Bonding Bill - First the Republicans renegged on promises to support the Hausman bonding bill which put all bonding in jeopardy at the last minute. But Bakk insulted the House further by pushing a last minute Capitol Bonding fix without consulting them. That put the House in an impossible position and left Hausman holding the bag. Bakk forced the issue and left the House Dems with no ability to negotiate. Hausman did not even present the bill and left it to John Ward to shepard it through the House.

That left Capitol action at a standstill that stretched deep into the evening. Senators wandered around the floor in recess, while the House opted to simply stop moving bills without actually recessing. Shortly before 9 p.m., the House Republican caucus emerged on the House floor after disappearing to caucus on a bonding proposal. When they came back, a new $156 million general obligation bonding bill was immediately taken up on the floor. It included $109 million for Capitol repairs, $22 million for two new parking facilities at the Capitol complex, $19 million for the Minneapolis veterans? home and $20 million for flood mitigation. Hausman made it clear that she was upset by the final outcome: DFL Rep. John Ward presented the bonding package on the floor, while she was nowhere to be found. ?I know what I want,? Hausman said a day before adjournment. ?I want my old bill.?

The Capitol bonding was clearly needed but Bakk had no business strongarming this through without warning. That is going to damage the trust between the bodies and clearly they need to be showing a united front.

4) Previous Tax Bill Vote - You probably remember that the first vote on the Tax Bill failed a few weeks ago. Bakk had not solidified his votes and when it was defeated, he managed to put a couple of freshman legislators on the hot seat - changing their votes. It was an embarrassment for the Senate and gave fodder to the GOP which they brought up at every opportunity.

5) Minimum Wage - I don't know if this was a Bakk problem or maybe the Bonoff "wing" of the Senate, but the minimum wage was held hostage by Senate intransigence. They stuck to a lower base that is barely above subsistence living and wouldn't touch indexing. There was a pretext of a conference committee on this but it was a victim of the last minute maneuverings and time constraints. Constraints that were unnecessary because both bodies had passed their bills with time to negotiate.

6) Gun Bills - Bakk deftly kept himself out of direct controversy on background check gun legislation. His past has been heavily supportive of the NRA and he gave lip service to watered down legislation in regards to gun bills. He let Speaker Thissen take the heat by forcing the House to take the more controversial positions on the issue and when Thissen decided it wasn't going to work for the session, Bakk simply concurred, ending the issue and any tough vote.

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This session was still a success, but Bakk always seemed to be inthe middle of any controversy. I'm afraid that Bakk's agenda could end up putting the House majority in jeopardy. Even when the Governor, the House, and Senate are in DFL control, there must still be compromises on the table. Playing stubborn games within your own legislative agenda is a dangerous thing to do.]]> http://www.mnpact.org/sblog/blog.php?id=3762
It was an extraordinarily busy session. The DFL majorities had enormous pressure from within and without. On the whole, they did pretty well. Let's talk about it....

It was interesting how the Governor, the Senate, and the House had parallel but very different paths for the end product. This lack of coordination was probably a bigger obstacle this time than Republican opposition.

The High Points

Balanced Budget - Governor Dayton's original budget plan was real reform. You can tell real reform by the amount of opposition. This plan was heavily opposed. Reduced sales taxes, broadened base on sales taxes, transit funding, and income tax reform were all solid attempts at a full structural fix. And I hope that we revisit more of the parts of it going forward.

The Governor backed off of the plan ...probably seeing the pushback as problemsome for a reelection bid. But at least there was a serious discussion and examination of where we probably need to go eventually. The Governor may have backed off too far, but his campaign signature issue of tax fairness did end up being the centerpiece of the tax bill.

The other pieces of the tax bill left the legislative houses at odds. The Senate put together an odd business service tax portion. I don't disagree with the concept but the parts chosen are a bit problematic. Warehousing is a tricky taxation issue and the attempt to exempt agricultural products adds more complications. It is also a little strange to exempt agricultural products as much as possible, but still taxing equipment repairs. Agricultural equipment are big repair projects at times. Finally, telecommunications taxation is also an issue because this changes so rapidly. It is hard to keep up with state of the art advances, let alone taxation on every change. It is quite probable that this part of the tax bill will get tweaked in the future. House Tax Chair Ann Lencewski seemed a bit peeved in this regard - she seemed to indicate that the Senate insisted on the changes and then at the last minute backed off, which would have left a gaping hole in the funding process. The Senate and House tax committees must have had an interesting conference discussion.

The House was also very attatched to the income tax surcharge that would pay off the school shift. The Governor and the Senate backed off of that because they wanted to focus on new money for education. The House wanted both. However, the school districts were not clamoring for an immediate payment and were more concerned with new funding that would stabilize budgets in the future. In the end, the House backed off the surcharge which was probably the prudent way to go.

Property Tax Relief - This was also an important promise. In his original budget, the Governor wanted rebate checks...that did not get legislative support. But relief did occur in more LGA money and an increase in the property tax credit and renters credit. These will help with local government budgets and also get some credits to the people who need it most. It won't be as visible as a check but still looks like good policy.

Education - This is the crown jewel of this budget. Education, both K-12 and Higher Ed, get significant investments. This is going to pay off, economically, over the long haul. Most Minnesotans get the benefits of education investment and hopefully this will manifest itself in visible changes. The MOST visible will be all-day kindergarten. Although its is voluntary for school districts, I can't imagine that any district will not take advantage of this. It will be beneficial for working parents and increase academic excellence for these kids in later years. This has been a long time coming and, of course, it took the DFL to accomplish it.

The bill also adds $40 million to special education. This is still not enough as we still have Fed funding problems, but additions here will free up revenue for other aspects of the curriculum. Another part of education that only the DFL seems willing to address.

Scholarships for low income parents and changes to testing are also included. This is a very important piece of legislation.

Transportation - Although transportation advocates are disappointed by the status quo funding in this area, I have to give a shout out to Sen. Scott Dibble for making room for funding the Southwest Rail Corridor. This might have died without this funding and keeps us on track to keep matching Fed funds coming. It is a very important piece of a complete metro light rail system.

Child Care Provider Union - This is probably the most controversial bill passed during the session, but for this low income worker area, it will be enormously beneficial. Child care is a vital aspect of keeping our work force up to speed. And the compensation is very weak. Although some providers opposed this move to union representation, I think in the long run they will benefit greatly. The vitriolic opposition by Republicans was unwarranted. They seem to get crazy when the word union is even uttered. But in the end, what have they ever done to help this area of the work force? Outside of cutting health and human service payments to them?

Gay Marriage Bill - This was an enormous achievement for the DFL majority. They have righted an enormous wrong in our state and have given same sex partners equal opportunity for happiness. I know there is still divisiveness on this issue but I would be very surprised if that doesn't heal when we find that this is not the gloom and doom scenario that has been part of the opposition rhetoric. There will be some discrimination cases going forward, but the generational shift will take care of all of it in the end.
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Low Points

Although the high points greatly outweigh the low, there are still a couple of things that should be mentioned.

Guns - We still have a ways to go when it comes to gun safety. A lot of people were deeply disappointed that even background checks couldn't get a proper hearing. The almost religious zealotry from the NRA people will not even yield to commons sense safety mechanisms. I know that an attempt to bring this forward next year will be done, but I think the window of opportunity has passed.

Minimum Wage - This is even more disappointing, because both the House and the Senate passed bills. They could not find a compromise position and thus the whole issue was lost. This was another great opportunity flushed away. I have my doubts that this will now happen at all, especially in an election year.

Transportation - Although Sen. Dibble got funding for Southwest Rail, the gas tax and metro transit tax were tabled. This leave transporation running in place with a massive backlog pending. I hope that in the near future, this gets priority.
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But on the whole, this was a very successful legislative session. The inner workings of it weren't pretty and the timing gave everybody ulcers, but it still had a successful end product.

Progress has been made.
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Republicans can't seem to say enough about the IRS scandal. It is that perfect conflagration of martyrdom and government persecution. But the more they talk the dumber this gets....

From Gov. Bobby Jindal....

Louisiana Gov. Bobby Jindal will use a Saturday speech to Virginia Republicans to suggest the IRS officials who targeted conservative political organizations for scrutiny be sent to prison.

"You cannot take the freedom of law-abiding Americans, whether you disagree with them or not, and keep your own freedom,? Jindal, a Republican, will tell delegates at the Virginia GOP convention, according to remarks shared with POLITICO. ?When you do that, you go to jail.?

Really?

First of all, nobody's freedom was taken away. The vast majority of these applications were still granted....they were just delayed. And quite frankly, these applications needed some scrutiny - I would contend that they did not meet 501(c)4 criteria.

On the other hand, I am not saying that there wasn't any wrong doing here...there was. But infringement on freedom? Seriously?

And jail time?

Our government engaged in torture - nobody went to jail. Our government did illegal wiretapping - nobody went to jail. Bankers nearly brought the entire economy of the United States down to rubble - nobody went to jail.

Continue the investigation - but let's have some reality about the scale of the problem.]]> http://www.mnpact.org/sblog/blog.php?id=3760
Sausage may make a fine meal, but don't watch it being made.

And so it is with budget legislation. The DFL Legislature has agreed to a tax bill and it is a good one - but getting there was an adventure.

What's In

Governor Dayton campaigned on taxing the wealthy and to no one's surprise, this is the foundation of the new revenue package. We now have the 4th highest state income tax rate in the nation, but we have always been near the top. A major jump in the cigarette tax is also part of the package. Although this has regressive elements to it, tobacco has always added health risks to our budget and most Minnesotans lean favorably to this type of taxation. The Senate provision that added some business service taxes to the sales tax also ended up in the final product. These deal with warehousing and software services which don't have much direct impact on consumers (although I am sure the GOP will be more than willing to point out that any tax on business ends up as higher costs to the consumer -- we get it).

It is a fair package and makes some good investments.

What's Out

The House provision for a surcharge on higher incomes to pay down the school shift is out. And, to be honest, I think that is good. I tend to agree with an op-ed by Minnetonka Superintendent Dennis Peterson (examined in Minnpost)....

The payment delay may have forced some districts to dip into reserves or engage in short-term borrowing. But to Peterson and many others, it was far less painful for school districts than comparable reductions in state aid.

Since the borrowing has already been done and since the school shift is going to be paid back within the next cycle, it seems unnecessary to add the surcharge on top of the new tax rate. If the school districts had been clamoring for a quicker return, it might have been a different story, but they are happier with the new education investments than they would be with an early shift repayment schedule.

The proposal on the alcohol excise tax is also removed. This had its share of controversy and the hospitality industry was pushing back. The concept was still sound and alcohol consumption is certainly discretionary, but given the choice of alcohol or tobacco, the cigarette tax is preferable.

Bottom line, for all of it, is that the needed revenue is available with a minimum amount of intrusion on the majority of Minnesota taxpayers.

What It Pays For

The big investment is in education - a promise the DFL made throughout the campaign.....and they delivered. In both K-12 and higher ed, education comes out the big winner.

But there is also $400 million in property tax relief - the details are still out there, but bigger rebates are part of the plan. And the city and county governments get exemptions on sales tax which will help enormously with their budgets.

Needless to say, the deficit is eliminated....but the bigger theme here is that there are no gimmicks; thus these changes will work to keep budget deficits to a minimum going forward. Not a full structural fix, but closer.

Other Items

The Mayo Clinic proposal is in the package. I'm not sure the details are complete but it does seem to be a done deal. There were some arguments over the total package and who is in control. We will see the end product soon enough. Other business incentives are also included - which should have some direct impact on jobs. Another promise kept.

And the Rest....

Now that the tax package is agreed to, the other omnibus bills can get finalized. It looks like health and human services will get a $50 million cut instead of $150 million. A bit better. We also have a tricky little back up plan for stadium funding. Looks like existing tobacco inventory will be retroactively taxed and the money used to fund the stadium "rainy day" fund. Ongoing funding will come from one of those "mysterious" closed corporate loopholes. (It would seem that corporate taxation is about as stable as the proverbial finger in the dyke - close one loophole and another opens up.)
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So now the race is on to get everything done before Monday night. The major conflicts are done, but time won't be kind to the smaller arguments.

It has been an interesting session. Let the spin begin.
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When the Labor department releases its monthly data on the first Friday of each month, there is always a back and forth spin about the data.

Currently if the data is good, the spin on the right looks for the negative aspects and sometimes they even say that the data was manipulated.

Well, let's talk about Wisconsin and Governor Scott Walker. His entire case for being governor centers on improving Wisconsin's economy. He promised to deliver 250,000 jobs during his first term. And he openly mocked Minnesota's budget emphasis on using taxes to expand economic growth. Walker is sure that all those Minnesota businesses are looking to the east for tax salvation.

Well, it's getting harder for Walker to make some traction on the economic front.

He is trying his best spin...he released figures that indicated progress during the first two years of his tenure; Wisconsin has added 32,000 jobs in 2012 and 62,000 during his first 2 years as governor.

That's great if you think that achieving 25% of your goal when 50% of your time is complete is a good thing.

But the report had more. Wisconsin unemployment sits at 7.1% (compared to Minnesota at 5.3%). And, the state lost 22,600 jobs during April....which, at least by my math, would wipe out over a third of all the gains Gov. Walker is touting as his economic jobs creation accomplishment.

But let's talk a little more abstractly about economics for Minnesota and Wisconsin.

Minnesota has now legalized same-sex marriage. The legislature in Wisconsin has been under GOP control and the state passed a Constitutional amendment prohibiting same sex marriage in 2006. (now, 2006 seems like a political lifetime ago).

And the political leaders in Wisconsin are acknowledging that they may have a future problem....

In the seven years since then, Wisconsin Republicans have generally tried to avoid the topic, although Gov. Scott Walker and others have acknowledged the generational shift on the issue ? and even suggested they may eventually surrender to it.

While Wisconsin has been talking about attracting businesses to its borders -- one could argue that Minnesota could be attractive to LGBT couples in our neighboring states. We don't even know what kind of economic activity that could be realized by that. We may get some hints by August 1st.

Minnesota and Wisconsin have a lot in common....and at least in the past, their political paths have been similar. Recent events have shown a divergence in both social and economic ways.

Where that takes these states in the future will be worth watching.

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I have spent most of this week hacking and coughing and laying around like a slug...trying to get over a nasty head and chest cold. Needless to say, I haven't been up to blogging and the news hasn't helped my mood much. It has been one endless stream of gleeful Republicans hyping "scandal" after "scandal" in front of any camera that will point their way.

But since I was in a slug-like funk, it also gave me the opportunity to watch all of it and to get a fuller understanding of reality....and not just a GOP interpretation of it.

Benghazi

This gets the most sound bites but has the least actual news involved with it. It is hard to claim "cover up" when all the information has been in hand from the beginning. ABC News botched a "scoop". CNN debunked it. Darrell Issa continues his fishing expedition. Everybody tries to connect Hillary Clinton to anything they can. Meanwhile, the White House has accepted the investigative report. Plans to implement every recommendation. Now, will the GOP House fund the proposed security upgrades for our embassies? I'm betting not. It would be nice if this tragedy would not be politicized any further.

IRS

Of course, Michele Bachmann couldn't resist citing "worse than Watergate" in her hyperbolic way, but there is a problem here. However, the problem is NOT in the extra scrutiny of the applications, because 501c4 applications need it. The problem is that the scrutiny was one sided. There is little doubt that it wasn't just conservative groups that deserved that kind of attention. Liberal groups were involved as well.

I find it more than a bit ironic that Eric Cantor is calling for more transparency.....when the whole idea behind 501c4 applications is to avoid any semblance of transparency. They want to hide their donors from public view and keep funneling the "dark" money into campaigns. Even though the purpose is supposed to be for the "social welfare".

People should be held accountable but the the whole thing is a manufactured problem of Citizens United.

AP Phone Records

This is really the most troubling "scandal". An investigation into the source of a government leak is justified, but the broad and sweeping acquistion of reporter phone records is not. There has to be a more specific probable cause and preferably judicial oversight here. This is the Press and they should have protections.

I am not a big fan of Attorney General Eric Holder. He seems to be using a pretty broad office cudgel (ala Alberto Gonzales) in his investigative authority. Even though he recused himself here, he is not absolved of some responsibility. He is still responsible for the workings of the Justice Department and this is a very troubling event.
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These issues are worthy of discussion and investigation....but as usual, the Republican response is shrill and overblown.

Bottom line?

The end result of Benghazi should be safer embassies.

The end result of the IRS should be reform of a broken campaign finance system....or even better, a repeal of Citizens United.

The end result of the AP Phone Records situation should a renewed Press shield law that protects the first amendment fully and completely.

Any other actions are political....and as usual, the political is all the GOP is interested in.
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Good old Tom Emmer has decided to weigh in on gay marriage via the Davis & Emmer Newstalk Blog and cross posted at True North.

And as usually is the case, his title asks the absolute wrong question....

WHY DO WE NEED A LAW FOR HOMOSEXUAL MARRIAGE?

I have to question Emmer's basic understanding of the issue if he really thinks that is the question. We do NOT need a law FOR homosexual marriage, we need to get rid of laws that PROHIBIT homosexual marriage.

There is a big difference....a fundamental difference.

In 2012 a Constitutional amendment was defeated which would have taken current law and enshrined it into our state's founding document. And the actions taken this week will hopefully end the law that told a minority of our citizens - you cannot be married.

Emmer has a convulted idea of where the discrimination lies. He says it this way...

Again, if you really believe you are fighting against discrimination, then why propose a law that will enhance the very discrimination against which you claim to be fighting? Wouldn't it make more sense to propose the state get out of the business of defining a legal "marriage" in the first place?

Gay couples did not ask anyone to define marriage in a way that excludes them. Politicians like Emmer decided to do that. The courts began to wonder aloud as to why states did that as well. And in Massachusetts and Iowa, they said NO, you can't do that.

But Emmer uses another distorted argument...

There is another question: If the legislative advocates for homosexual marriage pass and the Governor signs their proposed law redefining ?marriage,? how will they protect and respect the rights of those who believe homosexual marriage is wrong? Will they respect their neighbors' beliefs? Will they respect the right of others to pass their beliefs about right and wrong on to their children?

If you believe that homosexual marriage is wrong, what, exactly do you need protection from? Your beliefs won't be infringed upon unless you act upon them to harm others. If the tables are supposedly being turned and that now gay couples should be "respecting" their heterosexual counterparts, let us hope they do not use the example of respect that has been shown to them in the recent past.

Emmer ends with some words of advice...

...while you may have the right to live your life as you see fit, you will never have the right ? even if you put it in law ? to deny others the right to teach our kids to love thy neighbor but, at the same time, that marriage is and always will be a relationship between one woman and one man intended to carry on a moral, healthy and productive society.

Where Tom Emmer gets the idea that anyone is going to "force" some unwanted teachings on heterosexual families is a bit beyond comprehension. Frankly, Emmer and his colleagues are so busy trying to keep gay relationships hidden in dark corners that an argument could be made that they are denying gay couples their rights to be heard.

The suggestion that somehow we are going to have some kind of reverse discrimination backlash is just another distortion that weaves its way through the marriage arguments.

Relax, Tom, the sky will not fall. Really, it won't.
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This has been an interesting journey.

I looked it up and the first time I blogged about gay marriage was 4 years ago - 2009. That seems like a lifetime ago....but in other ways like yesterday.

The pendulum has been swinging steadily and today the Minnesota House passed the Gay Marriage bill in a 75-59 vote.

We still have a Senate vote to work through and a signature from Gov. Dayton....but it all seems like a formality right now.

In a way, we can thank the Republican legislature of the last biennium for all of this....really, I mean it.

If they had not set the wheels in motion to bring that Constitutional Amendment to the 2012 ballot, how would this conversation have accelerated to this extent?

In what we thought to be a pretty cynical political move to get out the "base", the Republicans awoke a sleeping giant. A unique call to action was in order and it changed the conversation in the state.

The national trends were part of the pressure as well. We saw a President who decided to get focused on the issue. We saw Senators move to a more public and positve position. We have seen churches move, employers move, and some of our most basic institutions move.

There are still some basic and deep objections to any change in who can participate in marriage....but in the end, this process seems to be driven by the basic principle of fairness. That is what moves all of this.

I hope that a year from now this conversation will be old news. That we can get beyond the sharp divide and get back to live and let live.

Let the progress continue.]]> http://www.mnpact.org/sblog/blog.php?id=3755
There has been all this speculation about the Democrats who are considering voting FOR the marriage equality bill, who come from districts that supported the amendment in 2012.

Yet, there is the other side of the coin....there are 21 Republican House members who come from districts that defeated the amendment.

Two of them are from District 57 (Apple Valley-Rosemount). Rep. Tara Mack and Rep. Anna Wills.

Tara Mack's district defeated the amendment by a 10% margin. Yet, she plans to vote NO on the bill. In fact, she was on the committee that brought the 2012 Constitutional Amendment to the floor. It was a 13-12 vote....and Mack was one of those 13 votes. She could have stopped it, but didn't.

Anna Wills has a district that defeated the amendment by 11%. She defeated marriage equality advocate Jeff Wilfahrt in the 2012 election, but she will also probably be a NO vote on the bill.

Time after time, the Democrats are told that they should vote with the majority of their constituents....yet, GOP representatives get none of the same advice.

I can respect a vote of conscience in this case. Personal principles do matter. But let's at least make it consistent.

And don't just consider current constituents either. This is a vote that must consider the future.]]>