MN Budget Battle: What went wrong?


We’ve all had to fight over money at some point in our lives, whether your brother or sister owing you ten bucks or trying to decide with a significant other what to spend your savings on (careful). Arguments over money can cause family dysfunction, and have ruined more than a few relationships.

Like the one between Democrats and Republicans?

Republicans currently hold a majority in the legislature, the Democrats hold the governorship; few were surprised by the disagreements on budget spending. But it went much further than disagreement: Governor Dayton recently cut all funding to the MN legislature, and the GOP beginning the process of litigation in retaliation.

How did it get to this point?

There was obviously going to be some back and forth pushing for what each side wants when it comes to politics, falling in line with different voting bases and ideologies.

The issue Dayton had with the budget bill was pointed out in a letter he sent to Speaker Kurt Daudt and Majority Leader Paul Gazelka. In the letter he pointed to a clause in the State Government Bill he deemed a “poison pill”: This clause would go into effect if the tax bill were not enacted and its effect would be to eliminate all funding for the Minnesota Department of Revenue in the Fiscal years of 2018 and 2019.

The Governor got around this by not signing the tax bill at this time and instead calling for a special session.

There are some issues the Governor has pointed out out to with the tax bill, and it’s clear that his main concern surrounds the fiscal future of Minnesota. The following is a list of the issues he identified in his letter:

  • Elimination of the Tobacco Tax will cost tax revenue of $53.5 million in the next four years
  • Tax Break on Premium Cigars will cost about $7 million over the next 4 years
  • The Estate Tax Exclusion increase from 1.8 million dollars to 3 million dollars will cost the state $109.3 million over the next four years
  • The Property tax freeze that could cost the state up to 1 billion dollars over the next ten years

His other issues were with a clause in the budget that would outlaw illegal immigrants from getting a drivers license, and the Teacher Licensure Provision, that were in the bill also. The reason for being against the drivers license clause it that it is redundant, you have to be a citizen to get a driver’s license and there is no way for it to become law without the Legislature, and his issue with the Teacher Licensure Provision regarded some provisions that undermine the high standards we currently have for our educators.

So the question to be asked is, “If Governor Dayton had so many problems with the budget, why did he sign some of it?”

The answer is pretty simple, and he states in his letter to the Speaker of the House and the Senate Majority Leader:

“I am signing into law the nine so-called “Budget Bills,” in order to forestall a bitter June showdown over a State Government shutdown. I have strong disagreements with CERTAIN provisions in every one of those bills. However, having been through twenty tumultuous days in July 2011, I understand the enormous uncertainties and disruptions that even the threat of another shutdown would cause for many thousands of Minnesotans. I also know from prior experience that it is extremely unrealistic for any of us to imagine we would achieve any better results from protracted budget negotiations well into June.”

The next question to ask is, “Yeah, but then how did the Governor not know about this ‘poison pill’ long before he ever went to sign the budget?”

In his letter to the Speaker of the House and the Majority Leader, Governor Dayton writes,

“I consider this provision, snuck into the State Government bill without my knowledge, to be a reprehensible sneak attack.”

As was stated in this article published in the Pioneer Press, when the Speaker Daudt was asked about the accusation of a “sneak attack” clause, he responded that the bill was readily available hours before it was passed. He also claimed that leaders knew about the provision and Dayton could have raised an objection, but didn’t.

On some level it boils down to a simple “he said, she said.”

(This is politics, after all.)

The line item veto of the funding for the House and Senate was meant to force a conversation in a special session. Governor Dayton, however, did state (in his letter) that he would not call a special session unless the clause about illegal immigrants getting a license was removed.

The Republican leaders in the House and Senate have said there is no reason to have a special session due to them not wanting to figure out things that have already been solved. They have stated what the Governor did was unconstitutional and vindictive.

(He said, she said…)

This is going to cost taxpayers a lot of money if they don’t figure it out before things go to court. The attorney fees will be $325 an hour and there has been no discussion on how much work this is going to take.

Governor Dayton has recently expressed interest in bringing GOP leaders together for a meeting to avoid a court battle. His main focus remains on resolving conflict over cutting out increases on tobacco, freezing property tax levies, increasing estate tax and removing the language for banning licenses to illegal immigrants.

We’ll keep you posted.