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Rudy Takala's Columns

Does Republican Rhetoric on Minnesota's Budget Affect Future Policy Outcomes?

From an unfiltered political perspective, the $35.7 billion budget signed by Governor Dayton on Wednesday served a purpose desired urgently by both Republicans and Democrats to claim some sort of victory. That appeared to be the most admirable quality of the legislation for both sides.
 
Yet what is notable is that only Republicans are touting the legislation around, calling it a "victory." The Minnesota GOP went so far as to issue a press release on Thursday titled, "Republican Party of Minnesota Hails Budget as a Victory for the MNGOP and the People of Minnesota."
 
Though Governor Mark Dayton signed the legislation, his Democratic colleagues in the legislature have not been as supportive. They declined to vote for most of the twelve budget bills passed by Republicans, condemning them as inadequate and thereby consigning their ownership to Republicans, most of whom were proud to accept it.
 
So is Republican pride in this budget appropriate? Further, what are its consequences?
 
Was the Budget Really A Victory for Republicans?
 
The $35.7 billion budget spends too much, and that fact is universally conceded by Republican legislators. The previous biennium's budget spent $30.2 billion, or $32.5 billion if you included one-time stimulus money provided by the federal government. That equates to a spending increase of 12% if we use the static figures or 9% if we use the figures produced by including one-time funds. (Out of this year's $35.7 billion figure, $1.4 billion was produced using one-time funds that we will describe later on.)
 
Surprisingly, Republicans request that we use the the static figures that suggest a the higher percentage increase in spending. The reason is that the spending they passed for our next biennium consists of $34.2 billion, so they would prefer we think of that number instead of the figure of $35.7 billion. They do not expect us to think of the increase in terms of comparable percentages.
 
Before moving this analysis forward, it is worth ceding that Republican legislators cannot be uniformly blamed for the handling of budget negotiations or for the final budget product. The newer, (in some cases) more conservative legislators elected in 2010 did not have enough experience to work the system to their strong advantage. Others simply were not a part of leadership, so they did not have a voice that was relevant.
 
Those who did the negotiating with Governor Dayton were House Speaker Kurt Zellers & Senate Majority Leader Amy Koch. It may be a matter of opinion whether any strategical errors or ideological betrayals took place among Republicans; yet if it did, not much objection will be made to the observation that responsibility falls at the feet of those in leadership.While it might be an opinion, I think there is a fairly strong case to be made that Republicans' leadership abjectly and outrightly stomped upon their party's principles in proposing a $34 billion budget as a "first, last and best offer." That constituted an offer to increase spending by 12%, and they said that was their "best offer." It should have been their worst.
 
That spending increase was not a reason they were elected, and that proposal should be viewed as a failure. At the end of the day, it led to our state's final record-setting budget of $35.7 billion.
 
So why do Republicans Claim it was a Victory?
 
In spite of the spending hikes, Republicans claim the budget was a victory because of what they say are policy reforms that will save money in the long run. For example, one of the most notably and commonly toted reforms is a phase-out of the 2% MinnesotaCare provider tax. What legislators absolutely will not tell you is that it will not be phased out until 2019. As Twila Brase of the Citizens' Council for Health Freedom (CCHF) notes, that is "four legislatures, two governors, and 8 legislative sessions from now...during which the repeal of this year's repeal of the tax could be repealed."
 
Another example is that the rate of growth for Health and Human Service was set at a rate of 4.8% percent. That was a decrease from the previously projected rate of 15%. Of course, that may also be repealed. We should consider it questionable whether it is really a worthy goal to accept guaranteed spending today for the mere hope of less spending tomorrow. Democrats received a guarantee; Republicans received a hope. Generally, I do not believe it is desirable to provide a guarantee in exchange for a hope.
 
Additionally according to CCHF:
 
"Despite having repeatedly [been told] that the Obamacare Health Insurance Exchange (HIX) was not in the bill, [Twila Brase] found 'health insurance exchange' language in the 286-page" Health & Human Services legislation "shortly after it was placed online around 10:00 p.m.... and shortly before it was scheduled to be voted on and sent to the Governor."
 
Ms. Brase's efforts resulted in the HIX language being pulled from the legislation. Neither Republicans or Democrats would accept responsibility for its sudden insertion in the legislation, so it is a mystery how it arrived there.Fortunately, some of the reforms and programs established are worthwhile. One improvement likely to be over-iterated by Republicans seeking to say something exceptionally convincing was that the difficulty of using EBT cards to buy tobacco and alcohol was increased.
 
The Media/Democratic Response
 
More than simply being an odd budget for Republicans to take a lot of pride in, it is hard to defend. It was the product of Democrats' predilection to grow government by any and all means necessary; Republicans were perhaps forced to accomodate them, but the Frankenstein of a budget that was created in the process isn't something it would seem like they would really want to own.
 
Legislators used two methods to raise one-time funds for this budget. One was delaying school payments. The second was grabbing $640 million in future tobacco settlement proceeds that were supposed to be allotted annually. A July 20th editorial in the Star Tribune expresses this critique (with which I concur) of using the settlement money:
 
"The upshot in the future will be lower general-fund revenues, larger debt-service obligations and higher interest costs, in part because Wall Street bond houses are bound to scorn what is, in essence, deficit spending."The editorial continued with this reasonable critique of education payment delays:"Almost as ill-advised is a $700 million delay in school payments, forcing many districts to borrow operating funds. Minnesota has 'shifted' the timing of school payments before, and has restored the regular payment schedule years later. A shift can be justified near the end of a biennium, when tax increases or spending cuts cannot act quickly enough to balance the books. But employing an emergency tactic at the start of a biennium is a marker of poor management, and using the delay's one-time savings to pay for ongoing expenses compounds the error."
 
The editorial concluded, unfortunately, with this terribly false analysis:
 
"Small-government conservatives defend these bills as a way to force more spending restraint in 2013 and beyond. We'd describe them as unprecedented and irresponsible."
 
In reality, small-government conservatives would agree that the legislation is unprecedented and irresponsible. If legislators want to spend massive amounts of money that do not exist, unprecedented and irresponsible actions will have to be taken. That is the nature of big government.
 
Republican leaders sadly are tarnishing the reputation of conservatives activists by falsely characterizing their budget as being conservative. Advocates of re-election they may be; friends to the conservative movement they are not. That is their right, but more honesty in that respect would be nice. It would diminish liberals' ability to slander and mischaracterize the things for which conservatism stands.
 
Conclusion
 
The consequences of Republicans' pride in a deeply flawed and grossly oversized budget are multifaceted. It is ironic, because Republicans did not play a defining role in the budget's creation. (If they really want to insist that they did, they have a lot of explaining to do to people who supported them under the impression that they would work to limit government.)
 
It is also a problem for advocates of limited government, whom the media will characterize as paradoxically supporting both a big government and an inefficient, dysfunctional government.
 
Activists (though perhaps not average voters) who supported Republicans in the last election did so with enthusiastic fantasies in mind of Republicans defeating their opponents on the legislative battlefield. Those fantasies were somewhat exaggerated, and many of those same activists would acknowledge it. I certainly understand that the budget situation was a difficult one this year, and I can understand how we ended up with a less than desirable budget.
 
What is not understandable, however, is how Republicans can claim that the budget belongs to them. It is not understandable that they are trying to promote it as being admirable, desirable, or commendable. It is not.
 
In trying to appease their party's activists, whom Republican leadership likely views as delusional, irrational, and somewhat stupid, they have been too willing to accept a portrayal of themselves, construed by the media and by Democrats, that they "won" the budget situation. In the eyes of the voters, and especially conservative voters, that is nothing to be proud of. In the long run, that is a detriment to the party and particularly the conservative movement's ability to send a coherent message.

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