There was a sea of change in the political landscape in 2012 when voters handed the DFL Party a majority in both house of the Legislature to partner with DFL Gov. Mark Dayton.
If there was any doubt that the party in control would retreat from its campaign promises, the legislative session that ended Monday, May 20 put those doubts to rest.
When the session ended at 11:59 p.m. May 20, a $38.8 billion budget for the next two years was passed. It represents an 8.8 percent increase in state spending. The action requires $2.1 billion in new taxes, thanks largely to a 2 percent income tax hike on top income earners.
The new budget includes $485 million in new state funding to E-12 education, $441 million in property tax relief, plugs a $627 million state budget hole, provides $250 million in new funding for higher education while freezing tuition costs for two years at the University of Minnesota and the 31 public colleges that represent the Minnesota State Colleges and Universities system. The new budget also increases funding for nursing homes.
Democrats will say the new budget creates a fairer tax climate that requires the wealthy pay more while easing the burden on the middle class. Property tax relief will end a decade-old trend that witnessed an 86 percent growth in a tax that hits the middle class, small business and senior citizens the hardest. The new budget provides funding for school districts that elect to provide a free all-day-every-day kindergarten program and directs new money to pre-K and special education programs.
This editorial board is on record supporting the all-day-every-day kindergarten program and additional funding for pre-K programs and believes the funding increases to support them are warranted.
Republicans will say the new spending is an overreach, kills job growth in the state and stalls what is a slowly growing economy. They argue that the steps taken last year worked without raising taxes. The new budget is no more than pay-back to labor groups that helped the DFL gain power, Republicans say.
Democrats counter that their plan is far from anti-business as it cuts $346 million in unemployment insurance taxes, pumps $30 million into the Minnesota Investment Fund as a measure to lure new businesses to the state and assist growth of existing businesses and lastly, supports the Mayo Clinic Destination Medical Center project in Rochester. The latter calls for a state investment of up to $400 million that will leverage more than $6 billion in private and public investments tied to the world-famous Mayo Clinic. Other state businesses, including the Mall of America in Bloomington, will see help with expansion efforts.
Some tax concessions were made by the DFL. A sales tax on clothing and a hefty tax on the wholesale prices of beer and liquor both fell by the wayside. There was no such luck for cigarettes, however, as smokers now face a tax increase of $1.60 per pack. Gov. Dayton early in the session abandoned his call for a series of business-to-business taxes that drew heated complaints. Efforts to broaden the sales tax base while lowering the rate failed.
After failing to secure the votes for an $800 million state bonding program, the Legislature regrouped in the final hours to pass a patchwork bill totaling $156 million. It includes $109 million to continue the State Capitol restoration efforts. Lawmakers who voted to delay projects benefiting out state regions will need to explain their reasons.
Opposition to tax increases may not be the sole rallying cry for Republicans when the full House of Representatives and the governor stand for election next year. We have not heard the last of controversial moves to approve gay marriage and allow some childcare workers and personal care attendants the right to vote on collective bargaining. Both measures define the political and philosophical differences of most Republicans and Democrats.
The DFL spent the political capital won at the ballot box in 2012. It is clear Democrats were aided by the political fallout of a state government shutdown and a pair of constitutional ballot amendments that energized their base in 2012. Now it could well be the Republicans that have found new energy, thanks to gay marriage and union issues. Is the pendulum of power that swung to the left in 2012 about to swing to the right?
When the ballots are counted in 2014, we will know if the DFL overreached or if the public was truly convinced that the Republican way was the wrong way.
This editorial is a product of the ECM Editorial Board. The Caledonia Argus is a part of ECM Publishers Inc.