Estate Tax Exemption Spotlights Minnesota Republicans’ Twisted Priorities

In the first year that Minnesota Republicans took full control of the Minnesota Legislature, they elevated Minnesota’s millionaire heirs and heiresses to the very top of their fiscal priority list.  Representative Greg Davids (R-Preston) says the wealthiest Minnesotans should be able to “keep more of what their mothers and fathers and grandfathers and grandmothers have earned,” so Republicans significantly increased the’ estate tax exemption for millionaires.

To be clear, we’re talking about filthy rich grandfathers and grandmothers,  After all, only the very wealthiest Minnesota estates pay any estate tax.   According to the Minnesota Public Radio:

“Up until now, your estate would have to be worth more than $1.8 million before the Minnesota estate tax kicked in, but that changed during this year’s legislative session.

The tax bill passed by the Republican-controlled Legislature and reluctantly signed by DFL Gov. Mark Dayton increases the taxable estate value from $1.8 million to $3 million over the next three years. The top tax rate remains at 16 percent.

Minnesota is among 14 states that impose their own estate tax. Farms and family-owned businesses worth up to $5 million are already exempt.”

So, we’re not talking about the four-, five- or even six-figure inheritance you might get from Aunt Gertie.

All of this is being proposed by Republicans at at time when wealth inequality has reached grotesque proportions, as illustrated by this stunning video:

This is how intergenerational privilege perpetuates: Millionaire heirs and heiresses – having done nothing more than winning the birth lottery by being born into a wealthy family — are exempted from taxation, including for wealth that has already avoided taxation because it is unrealized capital gains.

And on it goes, generation after generation. This is how we get the Donald Trumps and Donald Trump, Jr.’s of the world, entitled scions born inches from home plate crowing about their home run.

To state the obvious, because it apparently is no longer obvious to everyone, this is not in keeping with the American value of “all men are created equal,” which used to be all the rage in America. America was founded in defiance of the British system of aristocracy, which gave power to a small, wealthy privileged “ruling class.”  Abolishing aristocratic forms of inheritance was a primary way the founding fathers went about furthering American equality.

While today’s Republican Tea Partiers don Revolutionary War-era tri-corner hats while asserting that the estate tax is “Marxist,” the truth is that the estate tax has been strongly supported by a number of founding fathers.

Remember Thomas Jefferson, the guy who penned “all men are created equal,”  America’s “immortal declaration?” He promoted the egalitarian values of America’s founding fathers by arguing against the passing of property from one generation to the next:

“The earth and the fulness of it belongs to every generation, and the preceding one can have no right to bind it up from posterity. Such extension of property is quite unnatural.“

Jefferson was hardly alone in this opinion. Similar sentiments were expressed by Adam Smith, the hero of conservative free market advocates, as well as Republican Party icon Theodore Roosevelt.

“The absence of effective state, and, especially, national, restraint upon unfair money-getting has tended to create a small class of enormously wealthy and economically powerful men, whose chief object is to hold and increase their power.  The really big fortune, the swollen fortune, by the mere fact of its size acquires qualities which differentiate it in kind as well as in degree from what is passed by men of relatively small means. Therefore, I believe in … a graduated inheritance tax on big fortunes, properly safeguarded against evasion and increasing rapidly in amount with the size of the estate.”

You might guess that someone like Bill Gates, Sr. would be all-in when it comes to increasing the estate tax exemption. But he eloquently explains why the wealthy people need to pay back the community that supported them:

“No one accumulates a fortune without the help of our society’s investments. How much wealth would exist without America’s unique property rights protections, public infrastructure, and academic institutions? We should celebrate the estate tax as an ‘economic opportunity recycling’ program, where previous generations made investments for us and now it’s our turn to pass on the gift. Strengthening the estate tax is important to our democracy.

Consider all of the other alternative ways Minnesota Republicans could have used the $357 million that they are giving to Minnesota’s wealthiest heirs and heiresses over the next two bienniums. They could have used it to improve our transportation or broadband infrastructure,  help vulnerable children access early learning programs to close our dangerous achievement gaps, or expand clean energy capacity.  Those kinds of investments would have paid benefits for all Minnesotans far into the future.

Instead, Republicans made their top priority lavishing more enormous tax breaks on the small number of ultra-wealthy Minnesotans who least need help.

Governor Dayton has already signed the Republicans’ estate tax exemption, so at this point he has little if any negotiation leverage. But if Democrats take control of state government in 2018, this should be one of the first policies they reverse in 2019.  In the meantime, at every campaign stop they should spotlight this outrageous Republican giveaway to the wealthy elite.

A Policy Agenda For Minnesota’s Next Progressive Governor

In 2018, progressive Governor Mark Dayton will be retiring, and Minnesota voters will be selecting a new chief executive.  To retain control of the Governor’s office in 2018, Minnesota Democrats need a compelling policy agenda. It goes without saying that they also need a compelling candidate, but this discussion is about policy.

What constitutes a compelling policy agenda? First, it’s bite-sized. It can be quickly consumed and remembered by casually engaged voters. It’s more like five proposals, not fifty proposals. That doesn’t mean leaders should only do five things as a governor, but it does mean that they should only stress and repeat five-ish policies as a candidate, so that the agenda can be remembered.

Second, a compelling policy agenda delivers relatively bold change. It’s not merely about protection of the status quo from the bad guys, or small incremental improvements (see HRC campaign). It’s aspirational, and not limited to ideas that currently have the necessary votes to pass. If a candidate has to scale it back after elected, so be it. But they should run with a bold vision.

Third, a compelling policy agenda needs to have popular support beyond the political base. After all, a campaign agenda is about winning votes.

Fourth, it’s is easy to understand. Few have the time or inclination to study the intricacies of a 15-point tax reform plan, so candidates should stick to things that most can easily grasp and embrace.

Finally, a compelling policy agenda must be directed at Minnesota’s most pressing problems. It shouldn’t merely be about kowtowing to the most powerful interest groups, as is so often the case. It must actually be about the problems that most need fixing.

What fits those criteria? In no particular order, here’s my recommendation for a progressive gubernatorial candidate’s agenda.

  • MinnesotaCare for All Option. Allow all Minnesotans to buy into the MinnesotaCare public health insurance program. This will put competitive pressure on private insurance companies to keep premiums down, and ensure Minnesotans will always have a coverage option, even if health plans pull out of the market.
  • Transportation Jobs Fund. Increase the gas tax by a nickel per gallon — one penny per gallon per year over five years — and put the proceeds into an untouchable fund that will put Minnesotans to work improving the state’s roads, bridges and transit system. This will lift up the portion of the workforce that is struggling the most, and ensure Minnesota has a competitive economy and quality-of-life into the future.
  • Achievement Gap Prevention Plan. Ensure every child under age five has access to a high quality early learning program, starting with the children who can’t afford those programs on their own. This will prevent low-income children from falling into Minnesota’s worst-in-the-nation achievement gaps, gaps that opens before age two, lead to lifelong inequity and pose a grave threat to our economic competitiveness.
  • Fair Share Tax. Create a new, higher tax bracket for the wealthiest 10% of Minnesotans.  During a time when income inequality is the worst it has been since  just prior to the Great Depression (1928), the wealthiest Minnesotans are paying a lower share of their income in state and local taxes.   Adjusting the state income tax is the best way to remedy that disparity.
  • Super-sized Rainy Day Fund. Increase the size of the state’s rainy day fund by 25%. This will control taxpayers’ borrowing costs and help keep Minnesota stable in the face of 1) an economy that, after the longest period of economic expansion in history, may be due for a downturn and 2) a federal government that is threatening to shift many fiscal burdens to states. Bolstering the rainy day fund will also communicate to moderate voters that a progressive will be a level-headed manager of their tax dollars.

Yes, worthy issues are left off this agenda.  But we’ve seen time and again that when Democrats try to communicate about everything, they effectively communicate about nothing.  Long, complex “laundry list” policy agendas may please the interest groups who are constantly lobbying the candidates and their staffs, but they are simply too much for busy voters to absorb.  As legendary ad man David Ogilvy preached, “the essence of strategy is sacrifice.”  To be heard, many things must be left unsaid.

This kind of progressive gubernatorial policy agenda would be simple enough to be understood and remembered, but not simplistic.  It would be relatively bold and visionary, but not pie-in-the-sky.  It would be progressive, but swing voter-friendly.

This agenda would put Republican opponents in a political bind, because these progressive proposals are popular with moderate swing voters.  The partial exception is the Transportation Jobs Fund, where swing voters are conflicted.   Surveys tell us that gas taxes are somewhat unpopular, particularly in exurban and rural areas, but the transportation improvements that would be funded by the higher gas tax are very popular with voters of all political stripes, as are jobs programs.  On that front, one key is to guarantee that tax proceeds could only be spent on improvements, something many skeptical voters seem to doubt.

If such an agenda were sufficiently repeated and stressed by a disciplined candidate, fewer Minnesotans would be lamenting that they “have no idea what Democrats stand for.” Most importantly, this agenda also would go a long ways toward fixing some of Minnesota’s most pressing problems.

Why Have DFL Progressives Stopped Pushing For Progressive Tax Reform?

Every year, we hear the State Legislature endlessly debate “water cooler” issues, such as Sunday liquor sales and legislator pay. Meanwhile, we hear almost nothing about more fundamental issues of governance, such as whether we have a taxation system that treats Minnesotans fairly.

When you look at Minnesotans’ effective state and local tax rate — the proportion of income paid in combined state and local taxes – it’s clear that we don’t have a progressive system. That is, we don’t a tax system where the rate of taxation increases, or “progresses,” as income increases.  This chart based on Minnesota Department of Revenue data paints a pretty clear picture:

Note: Department of Revenue study authors point out that “effective tax rates in the 1st decile are overstated by an unknown but possibly significant amount.” If you want to know why, there’s an explanation on page seventeen of the study.

However, even disregarding that first bar for the purposes of this discussion, we can certainly say that Minnesota has a state and local tax system that is not very progressive. That is, it is not taxing Minnesotans according to relative ability to pay.

As you can see in this chart, local taxes in Minnesota are particularly regressive.   Compared to other income groups, the wealthiest Minnesotans are paying the smallest share of their income in local taxes.  So if state lawmakers want tax fairness for Minnesotans, and they can’t rely on local officials to reform local taxes, then they need state taxes to be more progressive to offset those regressive local taxes.

Before my conservative friends trot out their tired old “socialism” rhetoric, they should read the words of Adam Smith, the father of free market economic theory who conservatives worship, on the subject of progressive taxation:

“The necessaries of life occasion the great expense of the poor. They find it difficult to get food, and the greater part of their little revenue is spent in getting it. The luxuries and vanities of life occasion the principal expense of the rich, and a magnificent house embellishes and sets off to the best advantage all the other luxuries and vanities which they possess … It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.”

Republicans should also keep in mind that the nation’s first progressive income tax was enacted when the revered father of the Republican Party, Abraham Lincoln signed the Revenue Act of 1862.  A few decades later, Teddy Roosevelt carried on this Republican tradition when he strongly advocated for progressive taxation:

I believe in a graduated income tax on big fortunes, and in . . . a graduated inheritance tax on big fortunes, . . . increasing rapidly in amount with the size of the estate.

The fact is, until relatively recently Republicans were comfortable with much higher top income tax rates than they are today. While the top rate under Democratic Presidents Obama and Clinton was 40%, the top rates were 91% under Republican President Eisenhower, 70% under Republican President Nixon and 70% under Republican President Ford.

So, to my right wing friends, you’re embarrassing yourselves when you call progressive taxation “Marxism.”  For more than a century, progressive taxation was mainstream Republican thought.  Don’t let the uber-wealthy interests who seized control of the Republican Party in more recent years blind you to that fact.

To my friends in the center, spare me the “be reasonable” lectures you deliver every time progressive taxation is proposed.  Unless moderates also view Presidents Eisenhower, Nixon and Ford as wild-eyed extremists, you need to stop characterizing progressive taxation proposals as being somehow “radical.”

Finally, to my progressive friends, show some courage and leadership.  Don’t get so obsessed with shiny objects, like the Sunday liquor sales issue.  Don’t shy away from fighting to make our state and local taxation system more fair.  It’s time for DFLers who are “progressives” in name to become more progressive when it comes to substance.

Minnesota GOP’s Tobacco Tax Cut Is A Killer, Literally

There is a lot to dislike about the Minnesota Republicans’ tax cuts that were recently signed into law. For instance, increasing the estate tax exemption from $2 million to $3 million is an unnecessarily lavish gift to about 1,000 Minnesotans who won the birth lottery by being born into a relatively wealthy family.  Overall, the Republicans’ tax cuts will compromise Minnesota’s future fiscal stability by reducing state revenue by more than $5 billion over the coming decade. This is a particularly reckless move at a time when President Trump and his Republican congressional supporters are proposing to shift billions of dollars in future costs to states.   The next time Minnesota has a budget shortfall, remember the Republicans’ 2017 tax cuts.

But the stinkiest of the Republicans’ tax cut stink bombs was their tobacco tax cut, because in the coming years it will cause suffering and death.

Think that’s hyperbole?  A mountain of research shows that every time tobacco prices increase, tobacco consumption decreases. The corollary is also true – tobacco consumption increases when tobacco prices decrease.

This is particularly true when it comes to price-sensitive young Americans.

Here’s why that matters:  When tobacco consumption increases, tobacco-related suffering and death increases. Though we don’t hear about it as much as we used to, tobacco use remains the leading cause of preventable diseases and death in America. It causes a variety of deadly cancers, lung diseases, and heart diseases, among other serious health problems.  If you’ve ever seen anyone suffer from one of these illnesses, I promise you will never forget it.

If you don’t believe the legion of public health and economic researchers about tobacco taxes decreasing tobacco use, listen to the tobacco industry executives themselves. In a previously secret document that got disclosed during lawsuits, an executive from Philip Morris, the makers of Marlboro cigarettes, said:

“Of all the concerns, there is one – taxation – that alarms us the most. While marketing restrictions and public and passive smoking [restrictions] do depress volume, in our experience taxation depresses it much more severely.”

Likewise, an executive from RJ Reynolds, makers of Newport and Camel cigarettes, came to the same conclusion:

“If prices were 10% higher, 12-17 incidence [youth smoking] would be 11.9% lower.”

So if Republican legislators think their tobacco tax cut is doing a favor for Minnesota smokers, they couldn’t be more wrong.

Yes, financially speaking, the tobacco tax is regressive. That is, the higher costs of tobacco products that result from tobacco taxes disproportionately impact the pocketbooks of poorer Minnesotans.

But that’s not the end of the story, because the reduction in tobacco-related suffering and death that comes from higher tobacco taxes is progressive. That is, the life-saving health benefits associated with higher tobacco taxes disproportionately flow to poorer Minnesotans.  And by the way, the millions of dollars in savings from not having to pay as much to treat those tobacco-related diseases flow to Minnesota taxpayers and health insurance premium payers.

The bottom line is that cutting tobacco taxes, as Minnesota Republicans did this year, has two major impacts. It causes tobacco executives to profit more from increased sales, and it causes our family members, friends, and neighbors to suffer tobacco-related diseases.

Therefore, when it comes to tobacco taxes, Minnesotan leaders have to be cash cruel to be clinically kind. If the DFL Party wins control of the Minnesota Legislature in 2018, increasing tobacco taxes must be at the very top of their agenda.

This is Not Mark Dayton’s Finest Hour

TCursor_and_Constitutional_fight_escalates_between_Dayton__Legislature_-_StarTribune_comhis is going to sound awfully school marmy, but I expected more from you, Mark Dayton.

I’m speaking, of course, of the spat over Dayton’s defunding of the legislative branch of government in retaliation for the Republicans planting a legislative stink bomb in their unwise tax cut bill.

Admittedly, poor Mark Dayton suffers from my high expectations. During his career of public service, he’s usually been a thoughtful and mature leader who has shown great respect for our constitutional democracy.  For that reason, I just expect a lot more from him than I do from Republican state legislators, who have, in recent years, had more of a track record of recklessness and immaturity.

So, I’m disappointed with Dayton’s gamesmanship in this case, because it is probably unconstitutional and certainly childish. Mind you, this criticism is coming from someone who hates the Republicans’ tax and budget cuts, and dislikes many of their policy changes, but is also all too aware that, heavy sigh, elections have consequences.  That means that the party that won control of both chambers of Legislature in 2016 unfortunately gets to win a lot.

Someone who respects our guiding principle of separation of powers should never use their executive power to defund a coequal branch of government. Regardless of what the courts decide about the strict constitutionality of Dayton’s fiscal trickery, the question of “should” still ought  to matter to defenders of democratic principles, not just the question of “can.”

When it comes to the playground “they started it” defense that Dayton and his DFL allies are using, I can’t disagree on factual grounds.  At the same time, I’m with old Mahatma Ghandi on this one: “An eye for an eye only ends up making the whole world blind.”

In these dangerously politically polarized times, “adults in the room” are in desperately short supply. I’m grateful that Governor Dayton has played that thankless adult role many times during his career. Unfortunately, this time, our frustrated Governor has joined Republican legislators on the puerile path, just when we needed him most.

Is Minnesota GOP Sabotaging The Individual Health Insurance Market By Rejecting MinnesotaCare-for-All Option?

Minnesota Republican legislators spent their 2016 election campaigns expressing grave concerns about whether private health insurance companies in the individual market* have sufficient competitive pressure to keep prices down, and whether Minnesotans who live outside of the Twin Cities metropolitan region will have at least one solid coverage option available to them in coming years.

Those are legitimate concerns shared by both parties. But after Republicans won control of the Minnesota House and Senate, they have been unwilling to do one very important thing that that could achieve those two goals. They have been unwilling to give those Minnesotans the option of buying into MinnesotaCare health coverage.

Cursor_and_minnesotacare_for_all_-_Google_Search

Governor Dayton’s proposed “MinnesotaCare-for-All option” would allow any individual market consumer to buy into the state government-run health plan that has served over 120,000 Minnesotans since 2006. An unsubsidized version of MinnesotaCare would be an available option for all Minnesotans.

In other words, MinnesotaCare for all would be a Minnesota-specific “public option” that would always be there for Minnesotans. MinnesotaCare wouldn’t be able to abandon individual market consumers the way corporate insurance companies can and do. Moreover, MinnesotaCare’s presence in the marketplace will pressure private insurers to offer more competitive prices, because MinnesotaCare’s prices don’t have to account for corporate salaries and profits.   Representing the buying power of about a million public plan consumers, the large MinnesotaCare plan should also have leverage to negotiate consumer-friendly reimbursement rates with health care providers, which helps keep premium costs more affordable.

In fact, Governor Dayton’s office estimates that Minnesota families who purchase MinnesotaCare coverage would pay on average about $838 per person less in 2018 than they pay for private coverage in 2017.  To secure those long-term annual savings for Minnesota families, a one-time taxpayer investment of $12 million – a relatively tiny drop in the State’s $39 billion annual budget — would be required to establish the option. In subsequent years, no additional taxpayer funds would be needed to keep the lower costs flowing to Minnesotans. The MinnesotaCare-for-All option would be self-sustainable.

If you believe that government-run operations are always less efficient and customer-friendly than corporations, here’s your chance to prove it. If that’s true, comparison shopping Minnesotans will “vote with their feet” by rejecting it en masse. But if it’s not true, Minnesotans in the individual market will finally have the peace of mind that comes with knowing that at least one coverage option will always be there for them and their loved ones.

Given that 71% of Americans support having a similar Medicare-for-All option, a MinnesotaCare-for-All option is likely popular with Minnesotans.  Still, Republican state legislators killed the proposal this year.

Minnesota Republicans can’t have it both ways. They can’t reject the MinnesotaCare-for-All option and then turn around blame others if competition is insufficient in some parts of Minnesota, or if corporate insurers’ prices prove to be unaffordable to many Minnesotans. No one can know for sure if this idea will work, but if Republicans are unwilling to give things like this a try to help vulnerable consumers, then Minnesota voters should hold them accountable for their obstructionism.

*(Note: The “individual market” is made up of the 10 percent of Minnesotans who a) can’t get insurance through their employer and b) whose incomes are not low enough to quality for either of Minnesota’s two publicly subsidized health insurance plans — Medical Assistance (Minnesota’s version of Medicare) for very low-income citizens or MinnesotaCare a subsidized option for the working poor. Last year, about 250,000 consumers bought coverage in Minnesota’s individual market.)

Strib Poll Uncovers Dark Clouds For Republicans

Cursor_and_minnesota_republicans_-_Google_Search 2As the 2017 Minnesota legislative session heads into the home stretch and President Trump is creating a constitutional crisis, the news for Minnesota Republicans in the recent Star Tribune survey is not  great.

To recap, most Minnesotans are…

Digging Dayton. An overwhelming 62% of Minnesotans approve of the job being done by Minnesota Republicans’ primary antagonist, DFL Governor Mark Dayton. Less than half as many Minnesotans (29%) disapprove of the job Dayton is doing.

  • Implication:  He’s grumpy, boring, wonky, and unabashedly liberal, but Governor Eyeore remains quite popular with a strong majority Minnesotans.  Despite Republicans’ best efforts to frame Dayton as being metro-centric and out-of-touch with Greater Minnesota, a majority in every region of the state approve of the job he is doing.  As high stakes budget and policy negotiations between Dayton and legislators begin, Dayton is in a relatively strong position to push his progressive agenda.

In the Dumps About Trump. Only 40% approve of the Republicans’ national leader, President Donald Trump. This marks an all time historical low-point among Presidents, at a time that is supposed to be a President’s “honeymoon period.” For context, eight years ago, during dire economic times, the newly elected President Obama had a 62% approval rating.

  • Implication: To state the obvious, “all time low” is not good.  Republicans who remain steadfastly loyal to their party’s unpopular President could be more vulnerable in the upcoming 2018 mid-term elections. While the conventional wisdom would be for Republican incumbents to distance themselves from the toxic Trump, it’s difficult for them to do so, because Trump remains popular with the narrow band of Trump diehards.  Republican incumbents need those voters on their side in order to survive 2018 primary and general elections. With Trump this unpopular, Republican incumbents are in a political bind.

Swooning for DFL Senators. In comparison to Trump’s 40% approval rating, 58% of Minnesotans approve of DFL Senator Al Franken, and 72% approve of Senator Amy Klobuchar.

  • Implication: Franken and Klobachar remain popular as they relentlessly criticize Trump and his policies, which should embolden other DFLers to do the same. Also, Klobuchar looks difficult for Republicans to defeat in 2018, and both Franken and Klobuchar should be helpful surrogates for down ballot DFL candidates in 2018.

Cursor_and_Minnesota_mexico_wall_-_Google_SearchNot Feeling The Mandate. Trump mandate?  What mandate?  Most Minnesotans don’t like Trump’s policies any better than they like him personally. About two-thirds (65%) oppose Trump’s signature campaign issue – building a Mexico wall. Only 29% support that idea.  The survey also found that Minnesotans oppose Trump’s proposals to accelerate deportations, and his Muslim travel ban.

The only ray of hope in the survey for President Trump was that 70% of Minnesotans support his drive-by Syrian missile strike, proving once again that Americans still love military actions, as long as victory can be declared within a matter of days.

  • Implication. It turns out those “real Americans” at the Trump rallies who cheered wildly about the Mexico wall and Muslim ban are not very representative of most Minnesotans. Therefore, stressing those issues would seem to hurt Republicans more than help them, at least with moderate swing voters. However, the one thing that perhaps could make Trump more popular is a quick, easy military victory.  Don’t think for a moment that a drive-by war has not crossed Trump’s compulsively self-promotional mind.  In other words, it’s probably not a good time to plan a vacation to Grenada.

Nyet On Russiagate Coverup. Republicans steadfastly maintain that no one cares about the Russian controversy. But even prior to the disturbing Comey firing, a majority of Minnesotans (55%) indicated that they would like to see an independent investigation of the Trump campaign’s ties to the Russian interference in the U.S. presidential election, while 39% say there should be no such investigation.

  • Implication: If Republicans continue to cover up and downplay the Russia controversy, it will not pass the smell test with a majority of Minnesotans.

All Aboard On Trains. By a strong twenty-point margin (54% support to 34% oppose), Minnesotans support building two extensions of light rail transit (LRT), from Minneapolis to the southwester suburbs and Minneapolis to the northern suburbs.

  • Implication: Republicans should think twice about making LRT their poster child for wasteful spending.   Despite Republican operatives and talk radio jocks aggressively bashing LRT over many years, most Minnesotans, including plenty of voters in swing suburban districts, support LRT expansion.

Cursor_and_minnesota_tea_party_-_Google_SearchOkay With O’Care. Then there is Obamacare. Republicans seem supremely confident that Obamacare is wildly unpopular.  But a narrow plurality of Minnesotans actually is okay with it. Forty-nine percent of Minnesotans say Obamacare has been “mostly good,” while 44% say it has been “mostly bad.” This issue polled better for Republicans than most other issues, but this finding isn’t very encouraging for Republicans who are dead set on repealing Obamacare and replacing it with a Trumpcare plan that offers many fewer patient benefits.

  • Implication: As Republicans prepare to replace Obamacare with something that the nonpartisan Congressional Budget Office (CBO) says will erases all of the Obamacare coverage gains, these numbers spotlight the political risk that Republicans are taking.  Republicans are beginning to learn that the only thing many Americans hate more than Obamacare is lack of Obamacare.

Loving Local Control. By a whopping 34-point margin (60% oppose, 26% support), Minnesotans oppose the GOP-backed proposal to prevent Minnesota towns and cities from passing work-rule ordinances, such as minimum wage increases.   In every region of Minnesota, a majority oppose limiting local control.

  • Implication:  This is another loser issue for Republicans.  How in the world did the party that constantly preaches about the need for “local control” end up on this side of the issue?

Wrong Tax Cuts. Inexplicably, the Star Tribune apparently didn’t poll on what seems like the overarching question of this legislative session: What should legislators do with the state budget surplus? That is, should they spend it, cut taxes or save it for a rain day (i.e ask about “all,” “most,” “some,” or “none” for each category). Instead, the Star Tribune only asked how to cut taxes, as if tax cutting were the only thing being debated.

Even within that narrow fiscal category, the news wasn’t great for Republicans. Republicans propose tax cuts targeted to narrow constituencies — smokers, farmers, retirees, people with student loan debt, business owners and others. But most Minnesotans (45%) would rather just cut income taxes for all, perhaps because it’s simple and broad-based. Less than 20% of Minnesotans support the Republican-recommended constituency-by-constituency approach, while the rest support Jesse Ventura-style rebates (30%).

  • Implication: Tax-cutting remains the Republicans’ bread-and-butter issue, and it should be a pretty easy sell. Still, Minnesota Republicans can’t even seem to do that right.   They somehow managed to find the most unpopular way to cut taxes, which might somewhat limit the electoral benefits they stand to gain from the tax cuts.

Political tides ebb and flow, so today’s viewpoints could be very different at election time18 months from now. But as it currently stands in the dawn of the Trump era, Minnesota Republicans are not exactly winning so much they’re tired of winning.

With a Budget Surplus, GOP’s Across-the-Board Cuts Is Not “Kitchen Table Budgeting

Cursor_and_kitchen_table_budgeting_-_Google_SearchRepublicans — ever eager to show they are in touch with the values of ordinary Minnesotans — are very fond of drawing analogies between household budgeting and government budgeting. Former Governor Tim Pawlenty was especially keen on talking about the virtues of “kitchen table budgeting.”

In front of the camera’s, Pawlenty would play the well-rehearsed role of Stern Daddy, saying things like, “when Minnesota families are sitting around the kitchen table making their budgets, they make the tough cuts to balance their budget, and the Legislature needs to what those Minnesota families do.”

Actual Kitchen Table Budgeting

There are a lot of things that are silly about the Republicans’ “kitchen table budgeting” analogy, foremost among them that many families don’t balance their family budgets.   The dirty little secret is that we ordinary families are not quite as financially virtuous as the pandering pols make us out to be.  This from Bloomberg news:

Household borrowing surged in March at the fastest pace since November 2001 as financing for automobiles picked up and Americans’ outstanding credit-card debt soared.

The $29.7 billion increase, or an annualized 10 percent, exceeded the highest estimate in a Bloomberg survey and followed a revised $14.1 billion gain the prior month, Federal Reserve figures showed Friday. Revolving credit, which includes credit-card spending, posted the biggest annualized advance since July 2000.

Political rhetoric aside, the data show that families are borrowing at record rates rather than balancing their budgets.  So ordinary families may not be the right role models for our leaders.

Across-the-Board Cuts?

This year, Republicans in the Minnesota Legislature are proposing to slash state government spending, by 10 percent across-the-board.  This is not the way ordinary families budget at the kitchen table: “Okay sweetie, here are all the bills. Just lop off 10% of what we pay next year for the mortgage, car, RV, boat, snowmobile, cabin, cable, cell phone, utilities, health insurance, groceries, medicines, vacation fund, the college fund, the retirement fund, rainy day fund…”

Instead, families set priorities and cut accordingly. They say things like, “Well, we gotta keep the household running smoothly, and have a household safety net in case of an emergency, so we can’t cut these things.  Sending the kids to college is really important to us, so we can’t skimp there. But I guess we can do without a vacation, a car for the teenager, and premium cable.”  In other words, they reflect on their values, set spending priorities accordingly and cut spending surgically, not across-the-board.

Non-Crisis Family Budgeting

Cursor_and_Price_of_Government_as_of_End_of_2014_Legislative_SessionMore to the point, families typically don’t cut the family budget — across the board or otherwise — when the family finances are stable or improving. I promise you, this is not heard at very many kitchen tables: “Okay sweetie, we’re financially comfortable and stable right now, but let’s cut the household budget deeply anyway!”

The State of Minnesota is not in a crisis.  Our finances are currently sound, with a $1.65 billion budget surplus for the next two years. In contrast to the Pawlenty-era, when budget shortfalls were the norm, Governor Dayton required the wealthy to pay their fair share of taxes, and the state has been on solid fiscal footing ever since. Moreover, the “price-of-government” — Minnesota state and local government revenues as percentage of personal income — is currently relatively low.

So, why cut state spending at all? Did we suddenly come to the realization that Minnesotans need 10 percent less education?  Compared to the past, do we really think Minnesotans need 10 percent less roads, transit, human services, public health protection, environmental protection, economic development, and public safety? If not, then why in the world would we slash all of those vital services by 10 percent, at a time when we have a large budget surplus and the price of government is lower than historic averages.

After all, it’s certainly not what Minnesotans would do at the kitchen table.

Will Minnesotans Elect Another Grumpy Gus Governor?

grumpy_governorsA steady stream of candidates for the 2018 gubernatorial race will soon be emerging. Often “past is prologue” in politics, so we might want to consider the type of leader Minnesotans have preferred in our recent past.

Over the last quarter century, Minnesota general election voters have chosen Mark Dayton, Tim Pawlenty, Jesse Ventura and Arne Carlson to govern their state. While there are many differences between those men, I would submit that the psychographic common denominators for those successful gubernatorial candidates are:

  • They were all a bit cantankerous
  • They all stressed fiscal management
  • All but Ventura were policy wonks

(They also were all white dudes, but that’s a different post.)

Surly Fiscal Manager seems to have been the job title that Minnesota general election voters have tended to have in mind.  They chose a Grumpy Gus in green eyeshades to manage state government. Their most recent pick — a former State Auditor who has never been known for being cuddly or a stemwinder on the stump — certainly fits that profile.

Meanwhile, the narrow group of DFL caucus fetishists tend to swoon for politicians who have a very different kind of profile. They get energized by partisan cheerleaders/jeerleaders who pledge fealty to unions and other lefty interest groups and  propose significant expansion of government services.  While DFL caucus goers gravitate toward a firery cheerleader – “the next Wellstone” — general election voters seek a comptroller, someone to hold the extremists at bay and ensure state expenditures and revenues are prudently managed.  That may have been why Mark Dayton decided in 2009 to bypass the DFL caucuses and go to the much broader base of primary voters.

There are no ironclad political rules that will never be broken, and this is just a trend, not an ironclad rule.  But this tendency of general election voters does seem like something that should be pondered by DFL kingmakers.