Archive for the ‘Taxes’ Category
When this year’s legislative session ended, the CW was that the DFL held the upper hand in the PR/campaign fight. Whether that was true or not at the time isn’t relevant anymore. What’s relevant is who’s fought the smartest fight to this point. This statement hammers home some important points.
In total, it says “House Republicans did their job this year, negotiated in good faith and passed bipartisan bills on the priorities most important to Minnesotans. Unfortunately, Senate Democrats and Gov. Dayton deliberately obstructed progress. First, Senate Democrats blocked funding for transportation and infrastructure, then Governor Dayton vetoed tax relief for working families, college students, parents, farmers, and veterans. If Gov. Dayton knew he was going to veto the tax bill, he should have done it a long time ago and called a special session right away. Now the election is ramping up and the political environment will get in the way of honest compromises. We are willing to hold a special session. We agree with Gov. Dayton’s requests in the tax relief bill, and we should pass the bipartisan compromise transportation and infrastructure bill that was agreed to on the last day of session. We are not going to rehash the whole session by repeating negotiations on half a billion dollars of new spending demands.”
The DFL has talked solely about process, talking about the end of session. Republicans have talked about Gov. Dayton vetoing the Tax Bill, then questioning why Gov. Dayton decided to hurt veterans, farmers, college students, parents saving for their kids’ college education and small businesses.
I won’t say that people don’t care about process. If I were a betting man, though, I’d bet that people care more about getting tax relief. If the DFL thinks that they’re winning that fight, I hope they keep thinking that.
The DFL is also highlighting the line ‘If the Twin Cities wants to raise the money to build SWLRT, they should be able to.’ I’d agree to that statement only if the DFL agreed that the metro also paid for the annual operating deficits, too.
The DFL needs to pick up seats in exurban and rural Minnesota. Arguing that tax relief for farmers, veterans and small businesses hinges on a metro project is exceptional stupid politics on the DFL’s part.
Technorati: Mark Dayton, Southwest Light Rail Transit, Pocket Veto, Special Session, DFL, David Hann, Tax Bill, Small Business, Property Tax Relief, Farmers, Veterans, Income Tax, MNGOP, Election 2016
Saying that this editorial doesn’t have a pro-DFL tone to it is understatement. Let’s start with where the editorialist says “when Gov. Mark Dayton pocket vetoed HF 848 which would’ve provided significant tax relief to the citizens of Minnesota, it sort of felt like something major was lost.”
I don’t think Gov. Dayton realizes that his veto of the Tax Bill is killing the DFL. When the editorialist writes “Gone was tax relief for veterans, gone was tax relief for small business owners, gone was a tax break for farmers, gone was a tax break for the residents of Houston County who live in Minnesota but work in Wisconsin, gone was the forgiveness of interest paid on debt on the new school building.” he listed all of the groups of people who were hurt by Gov. Dayton’s veto. That’s a devastating paragraph.
It’s even more damaging to the DFL when the editorialist adds “All because the governor wanted additional monies for a light rail line in Minneapolis. Two years of hard, hard work by Rep. Greg Davids (Rep. Preston) on the bill dissolved by the governor not signing the measure into law.” This places the blame for Minnesotans not getting tax relief squarely on Gov. Dayton’s shoulders. People won’t care about the drafting error. Their response is likely to be ‘Call a special session and fix it then.’
Contrary to popular opinion, Republicans aren’t the ones at risk. The DFL is. While Gov. Dayton and the DFL whines about the end-of-session process, Republicans talk about the tax cuts that Gov. Dayton vetoed. In a messaging fight of end-of-session process vs. DFL vetoed tax relief, tax relief wins by a wide margin. If the DFL thinks that’s a fair fight, I’ll agree. It’s as fair a fight as I’d like.
Davids, when receiving the phone call from the governor of his plan to veto it, worked to appeal to their friendship. The governor chose politics.
That’s as surprising as finding out that the sun rises in the east. There’s more:
The Republicans came up from $600 million to $950 million in the bonding bill that would’ve addressed transportation needs in the state. Davids said anything over $1 billion jeopardizes the state’s bond rating. The governor wants $1.5 billion with about $600 million going towards a new light rail line in the metro.
Gov. Dayton is foolish if he thinks Republicans will cave on SWLRT funding. Like I said earlier, Republicans are in the stronger position. The DFL is sitting in a position of weakness, especially in outstate Minnesota.
People living in outstate Minnesota won’t care if SWLRT is funded. They’ll care that Gov. Dayton vetoed their tax relief. The longer this drags out, the better it is for Republicans. That’s because they’re fighting for fixing roads and bridges and significant tax relief.
That’s a winner for the GOP and then some.
Technorati: Mark Dayton, Pocket Veto, Bonding Bill, Tax Bill, SWLRT, Special Session, DFL, Greg Davids, Farmers, Veterans, Small Businesses, Property Tax Relief, Student Loan Debt, MNGOP, Election 2016
The special session that everyone wants to have hinges on 2 things: Gov. Dayton’s insistence on more spending in the general budget and funding of the SWLRT. Of the two, it’s thought that funding SWLRT is the higher priority for Gov. Dayton and the DFL.
That makes sense since they’re the metro party. They aren’t the party that puts a high priority on roads and bridges. They’re the party that sees transportation through the lens of using transportation as a tool for social engineering.
If there is a special session, there’s no doubt that the Tax Bill will be fixed, passed and signed. If Gov. Dayton vetoes it again, that veto will be put up for an override vote, which would pass overwhelmingly. The DFL doesn’t dare sustain Gov. Dayton’s veto this close to the election. That would be political suicide.
But I digress. Back to the transportation section of the bonding bill. Republicans should be the ‘party of no’ on SWLRT funding. In return, they could throw in a few more dollars for traditional transit. They should, however, be steadfast in their opposition to funding SWLRT.
If Gov. Dayton and the DFL pick SWLRT as their hill to fight and die on, then Republicans should take them up on that offer. That fight would strengthen every exurban and rural GOP incumbent and challenger immensely. It would simultaneously weaken every DFL legislator and challenger, too. This is one of the few times when politics is a zero-sum proposition.
Beyond the special session, though, Republicans should make a concerted effort to explain why the gas tax is obsolete as a funding method for fixing Minnesota’s roads and bridges. Though this op-ed talks about Wisconsin’s transportation situation, the same principles apply:
Wisconsinites are going farther on the same gallon of gas than they were even 10 years ago. This trend will not be reversing. The number of vehicles on the road has been stable since the beginning of the decade. The state cannot count on more vehicles on the road to make up for fewer gallons needed per vehicle. Furthermore, add in new vehicles that do not use gas or use very little like hybrids, fuel cells, and all electric, the future of gas tax revenue becomes clear to anyone with a basic understanding of mathematics.
The gas tax has reached the point of diminishing return. Increases in the gas tax will not provide the all the desired additional revenues the legislators, transportation bureaucrats, and road builders hope for. When you raise the price of something, you get less of it. When gasoline was $4.00 per gallon, people drove less than they do now at $2.50. Drivers also gravitated to more fuel efficient options or options that do not use gasoline at all. These options will only get more abundant as the technology improves.
In 2008, the DFL promised that raising the gas tax would provide the funds to fix Minnesota’s roads and bridges. It’s failed miserably. I predicted at the time it would fail. I wasn’t alone.
It’s time to start pushing the issue of finding different ways to fund road and bridge repair. If the GOP wants to provide a contrast to the DFL on transportation, which it should, this is the approach to take.
Yesterday, negotiators from the Minnesota House and Senate theoretically met in the hopes of hammering out a bonding bill agreement. That wasn’t the DFL’s goal. DFL senators, led by Jeff Hayden, blamed Republicans for not getting the bonding bill passed.
The DFL used the same misleading arguments they’ve been using since the DFL Senate sabotaged a bill that had broad bipartisan support. Here’s what’s important to know. The House passed a $1,000,000,000 bonding bill without funding for SWLRT. SWLRT funding wasn’t part of the agreement reached by Speaker Daudt and Sen. Bakk. Simply put, it didn’t have the votes to pass in the House.
Key questions: Why does the DFL insist on pushing a controversial project that didn’t have the votes to pass? Isn’t that a definition of insanity? Isn’t that what you’d do if you wanted to prevent a bill from passing while blaming the other side for your obstruction?
Another tactic that the FL is using to deflect criticism from Gov. Dayton’s veto of the tax bill is talk about the $100,000,000 drafting error. The minute Gov. Dayton brought it up, Speaker Daudt agreed to fix it the minute a special session was called. Problem solved, right? In Sanityville, yes. In Dayton-DFLville, that molehill turned into a mountain. At least, that’s how some of Twin Cities media are playing it.
Simply put, Gov. Dayton vetoed a tax bill that a) provided tax relief to farmers, small businesses, students will college loan debt, veterans and parents saving for their kids’ college education and b) passed 178-22 in the House and Senate.
Key question: Doesn’t real leadership accept yes for an answer and move onto bonding bill negotiations?
Gov. Dayton and the DFL aren’t about fixing things, though. Their word salad automatically talks about ‘bringing people together’ and ‘making progress’. The DFL never talks about fixing problems. The DFL doesn’t talk about doing the right thing.
There’s a reason for that. The DFL doesn’t want to get to a point where things are running smoothly. The DFL doesn’t want to fix things. If that happened, people might expect that. If that happened, people might notice that they prefer limited government that gets the important things right all the time and worries about peripheral things once they’ve gotten the important things right. The day that that happens is the day that progressives are out of a job.
The DFL’s whining is aimed at one thing: regaining control of the House so they control state government again. Thoughtful people should reject that possibility ASAP. The last time the DFL ran St. Paul, taxes got raised, including property taxes, spending went through the roof and they checked off tons of things from their special interest allies’ wish lists.
As a result, capitol flight accelerated and young, productive, people left the state at a greater rate. If losing the border battle brain drain sounds appealing, vote DFL. If you want statewide prosperity, vote GOP. It’s that simple.
Now that we’re in the 6th painful year of Gov. Dayton’s administration, we have a historical record to judge his administration on. It isn’t a history of successful negotiating. In 2011, Gov. Dayton attempted to push the GOP legislature into accepting his tax increase proposal when Gov. Dayton shut down the government. Let there be no doubt about this. Gov. Dayton planned the government shutdown. Insiders at HHS saw a memo that outlined the strategy a week after the end of the regular session and a month before the official shutdown. The memo explained how Gov. Dayton and the DFL would exploit the media in their attempt to vilify the GOP.
After that fizzled, Gov. Dayton announced that he was going to tour the state to raise support for his budget. Originally, it was planned to hit Rochester, then St. Cloud, Moorhead, Duluth, Brainerd and Bemidji. The Rochester stop fizzled even though they planned on heavy union participation in Rochester.
That afternoon, St. Cloud got word that Rochester had fizzled. When Gov. Dayton appeared at Apollo High School, Steve Gottwalt stole the show, telling Gov. Dayton that they could resolve the budget impasse by getting Dayton’s administration out of St. Paul and bringing Gov. Dayton’s number crunchers to St. Cloud. After the Apollo meeting, it was announced that the rest of Gov. Dayton’s trips were canceled. A week later, the special session was held. The shutdown ended.
Last year, Gov. Dayton tried the same gambit. He did his utmost to portray Republicans as heartless politicians who don’t care about people. Gov. Dayton insisted on funding Universal Pre-K. Rather than caving, Speaker Daudt met with Dr. Art Rolnick. During the regular session, Dr. Rolnick said that universal Pre-K wasn’t the way to go:
Also, interestingly enough, early education advocates throughout the state, including myself, a person like Art Rolnick, a person who has pushed early childhood learning to the head of our state, is saying that the Governor’s plan to implement is wrong. We should be targeting resources to those kids most in need.
It wasn’t until a month later that Gov. Dayton caved on universal Pre-K. Again, Gov. Dayton’s top priority, the thing he wanted most of all, he didn’t get it. Speaker Daudt made a fantastic policy statement, bringing in Dr. Rolnick and making the case against universal Pre-K.
This year, Gov. Dayton wants funding for SWLRT and a ton of additional spending. Gov. Dayton is again touring the state. Friday, he’ll be at SCSU. I’ll be there to cover the event. Thus far, the DFL playbook has been pretty much what it’s always been, that Republicans don’t care about the little guy, that they only look out for millionaires and billionaires and multi-national corporations. This week, the GOP turned the tables on Gov. Dayton. They had Ryan Visher, a store owner from Madelia, MN, explain how Gov. Dayton’s veto of the Tax Bill will hurt him.
Predictably, the things that Gov. Dayton is pushing for aren’t popular outside of the DFL. It’s just a matter of time before everyone realizes that. Predictably, it’ll take a little time before DFL legislators will tell him that his pressure ploy isn’t working. Shortly after that, we’ll get a special session largely on Speaker Daudt’s terms.
Technorati: Mark Dayton, Government Shutdown, Special Sessions, Universal Pre-K, Southwest Light Rail, Pocket Veto, Tax Bill, DFL, Kurt Daudt, Ryan Visher, Property Tax Relief, Art Rolnick, MNGOP, Election 2016
Wednesday afternoon, I got into a discussion on Twitter with Rep. Kim Norton. Rep. Norton brought up the fact that there’s a language error in the tax bill that needs to be corrected. The bill’s language will cause a $100,000,000 in revenues. That point isn’t in dispute. In fact, Speaker Daudt has said that fixing the drafting mistake will be the first order of business the minute a special session is called.
What’s interesting is that William Morris’ article highlights how DFL legislators aren’t on board with Gov. Dayton’s agenda. Sen. Vicki Jensen said “It’s very unreasonable, that whole list of demands he has. I’m hoping they don’t add a bunch in, and we don’t have to have a huge conversation.”
It’s time to fix the tax bill so that people like Ryan Visher can get the property tax relief he needs to get his business back up and running. The only thing standing in the way of a short special session is Gov. Dayton’s insistence on funding for the SWLRT and his insistence on $423,000,000 of additional new spending.
Last year, Gov. Dayton torpedoed the bipartisan budget agreement. Last year, he insisted on funding universal pre-K. After a long standoff, Gov. Dayton caved and called a special session. It took a full day but business got done.
It’s important to remember that Gov. Dayton shut down the government in 2011 and tried shutting it down in 2015. Now, Gov. Dayton is standing in the way of property tax relief for small businesses and farmers. He’s standing in the way of fixing dangerous roads like Highway 12, the deadliest stretch of highway in Minnesota.
It’s time for Minnesotans to write or call Gov. Dayton and tell him to stop acting like a little child throwing a temper tantrum and put Minnesotans like Ryan Visher first for a change.
The person that wrote this St. Cloud Times editorial didn’t do their homework. If they’d done their research, they wouldn’t have written “As stated in a plea last week to Dayton not to convene one, except for political gains for incumbents in both parties, there really is no compelling reason for a special session.”
Had they read this article, they’d know that there’s a compelling reason for a special session. Had the Times read that article, they would’ve learned that Gov. Dayton’s veto of the tax bill will likely have a dramatic effect on the economy of Madelia, MN. Had Gov. Dayton paid attention to Speaker Daudt’s press conference, he would’ve heard about the needs of shopkeepers like Ryan Visher in Madelia.
Visher and several other shopkeepers had their stores ravaged by fire. According to Visher, the insurance check will pay for the rebuilding of the buildings lost in the fire. That isn’t the problem. Mr. Visher explained the problem:
The problem, though, with that is that the insurance money will build the building but now we’re gonna have a building that’s going to be valued at 5 times, 6 times than what it was originally and we probably can’t pay the taxes on that. We’d have a great building that isn’t viable for us and so they came up with a plan to give us some tax relief and so both parties and both houses supported that and it got to the Governor’s desk. And the Governor was down here and he said that he would help us and he hasn’t yet…
Whatever happened prior to Gov. Dayton’s veto of the tax bill is irrelevant. Gov. Dayton could’ve signed the bill and called a special session immediately to fix the bill. Instead, Gov. Dayton used Mr. Visher as a bargaining chip. Gov. Dayton wanted to use these people’s lives as leverage to win an additional $423,000,000 worth of spending on the DFL’s special interest allies. That’s after the legislature approved $183,000,000 in spending in this year’s supplemental spending bill.
Gov. Dayton, Ryan Visher isn’t a bargaining chip. He’s a shopkeeper whose business was devastated by fire. He’s planning on rebuilding his shop so he can earn a living while providing people with jobs. What Gov. Dayton is doing is totally un-Minnesotan. He should be ashamed of himself using hurting people for political purposes.
Let’s be blunt about this. The DFL isn’t sad that Gov. Dayton vetoed the Tax Bill. Instead, a defiant DFL defended Gov. Dayton. For instance, said Rep. Tina Liebling said “The tax bill was put together very hastily and brought to the floor very hastily and had very little debate. It’s not too surprising to me that it had a $100 million error in it, and I think (the governor) was absolutely right to let it expire.”
Rep. Liebling is defending the indefensible. Thanks to Gov. Dayton’s stubbornness, small businesses ravaged by fire in Madelia, MN, won’t get the property tax relief they were waiting on. Shop owner Ryan Visher explained why the Tax Bill Gov. Dayton vetoed was so important, saying “And so we looked to Sen. Rosen and to Rep. Cornish and Rep. Gunther and asked what can help us do this because no developer is going to come into our town to develop that area so it came up to us, all 4 of us land owners, to redevelop that, to use our insurance proceeds and make it whole. The problem, though, with that is that the insurance money will build the building but now we’re gonna have a building that’s going to be valued at 5 times, 6 times than what it was originally and we probably can’t pay the taxes on that.”
Visher then explained his disappointment:
We’d have a great building that isn’t viable for us and so they came up with a plan to give us some tax relief and so both parties and both houses supported that and it got to the Governor’s desk. And the Governor was down here and he said that he would help us and he hasn’t yet and it’s unfortunate that being in outstate Minnesota, we’re being held hostage to some things that will only affect Metro.
Sen. Bakk said that setting up a special session should be easy. Sen. Hann’s response was as firm as it was swift:
The part that sticks out comes when Sen. Hann says “We agree with Gov. Dayton on the tax relief bill, and we should pass the bipartisan compromise transportation and infrastructure bill that was agreed to on the last day of session. We are not going to rehash the entire session by repeating negotiations on half a billion dollars of new spending demands.”
Gov. Dayton promised to help these shopkeepers in Madelia, MN. That’s what Minnesotans of all political persuasions have done throughout the years. This time, Gov. Dayton reneged on his promise to help the Madelia shopkeepers when he vetoed the Tax Bill. That isn’t a Minnesota tradition.
Gov. Dayton, prove that you just had a momentary lapse of judgment. Gov. Dayton, call a special session that passes the bonding bill before SWLRT funding was shoved down Minnesotans’ throats. Call that special session so that Mr. Visher and the other shopkeepers can get their lives restored rather than be held hostage in the name of political gamesmanship.
On Monday, I wrote this post to highlight Paul Thissen’s hypocrisy on a tax bill that got
strong overwhelming bipartisan support in the Minnesota legislature. Monday night, Matt Swenson confirmed that Gov. Dayton won’t sign this year’s tax relief bill, saying Dayton “will not sign a tax bill that includes a $101 million error.”
That’s BS. Gov. Dayton signed a tax bill in 2013 that contained far more than $101,000,000 in errors. Then, there was a DFL governor and DFL majorities in the Minnesota House and Minnesota Senate. That year’s tax bill included $90,000,000 for Sen. Bakk’s Senate Office Building. The DFL Tax Bill of 2013 applied, for the first time in Minnesota history, Minnesota’s sales tax to farm equipment repair, telecommunications equipment and warehousing operations. Those taxes were passed over the strenuous objections of the business community. According to this article, “Dayton’s plan would dramatically alter the state’s revenue streams. Over time, the state’s system has tilted toward the property tax, which supplies 40 percent of the state’s revenue. Income taxes provide 33 percent and 27 percent come from sales taxes. The overhaul would ensure that each of the three sources provided roughly a third of state revenue.”
If that’s accurate, then one-third of the Dayton-DFL tax increase came from the sales tax increase. That year’s tax increase was projected to be $2,250,000,000. When the DFL legislature went home after the 2013 session, they found out that the B2B sales tax increases were wildly unpopular. By August, the DFL had essentially admitted that those B2B sales tax increases were a mistake. The DFL didn’t issue a statement admitting it in those words. Rather, they admitted it by initially considering the repeal of the B2B sales taxes during that summer’s special session.
The repeal of those sales taxes didn’t happen during that summer’s special session. Instead, they were repealed in the regular 2014 session. Either way, the repeal of those sales taxes represented a mistake of over $350,000,000. Couple that with the $90,000,000 Senate Office Building and you’re talking well north of this year’s drafting error of $101,000,000.
It’s worth noting that the DFL’s tax mistake was a major policy mistake. They made a $400,000,000+ mistake by not understanding how counterproductive those tax increases were. In the case of the GOP Tax Bill’s mistake, it was simply a drafting mistake, something that happens multiple times each year. It’s an easy fix.
Gov. Dayton’s threat is now a reality.
Gov. Dayton isn’t being honest with Minnesotans. Here’s what Gov. Dayton demanded during negotiations for a special session:
The demands essentially call for about $423 million in additional spending, on top of the $183 million in additional spending this session, on top of the additional spending added last year when the state crafted its new two-year budget.
That means Gov. Dayton vetoed a bill that would’ve a) helped students pay off their student loan debt, b) helped parents save money for their kids’ college education and provided property tax relief to farmers and small businesses. Further, it’s been confirmed that Speaker Daudt suggested a meeting between the governor, Senator Bakk and himself and that Gov. Dayton refused to meet.
Gov. Dayton ignored Minnesotans’ needs. Gov. Dayton didn’t pay attention to the “farmers, parents and veterans” that Republicans brought to St. Paul to lobby Dayton. Instead, Gov. Dayton vetoed a tax bill that would’ve helped these Minnesotans because Republicans didn’t say yes to Gov. Dayton’s spending demands. Gov. Dayton said no to providing tax relief to thousands of Minnesotans because Republicans didn’t spend half of the surplus on Gov. Dayton’s and the DFL’s wish list.
Technorati: Mark Dayton, Pocket Veto, Paul Thissen, Tom Bakk, B2B Sales Taxes, Tax Increases, Special Interests, Lobbyists, DFL, Kurt Daudt, Tax Cuts, Student Loan Debt, Property Tax Relief, College Tuition, Small Businesses, Farmers, Middle Class Tax Cuts, MNGOP, Election 2016
Rep. Thissen just posted this tweet in an attempt to criticize Republicans to distract attention away from Gov. Dayton vetoing a series of middle class tax cuts. In his tweet, he said “I bet those Republican House members wish they’d voted w/ us for 24 hrs. to review bills. That’s how you avoid $100 million mistakes.”
Rep. Thissen is a man living in a glass house who throws stones recklessly. In 2013, Rep. Thissen joined with Sen. Bakk and Gov. Dayton to pass a tax bill that raised taxes on farmers, warehouse operators and telecommunications equipment. In 2014, Rep. Thissen joined with Sen. Bakk and Gov. Dayton in admitting that Republicans were right in voting against those sales tax increases. They didn’t admit it in a press release. They admitted it by repealing those sales taxes.
Rep. Thissen, Sen. Bakk and Gov. Dayton reached agreement on these tax increases a week before the end of the 2013 session. They passed these sales tax increases the last day of the session, which meant the DFL had tons of time to read through the Tax Bill.
Those sales tax increases weren’t the only mistakes made by Rep. Thissen, Sen. Bakk and Gov. Dayton in that 2013 Tax Bill. That year, Rep. Thissen, Sen. Bakk and Gov. Dayton and the DFL included $90,000,000 to build Bakk’s Senate Palace. To be fair, though, Rep. Thissen, Sen. Bakk and Gov. Dayton haven’t admitted that was a mistake. Minnesotans admitted it, though, when they threw out Rep. Thissen as Speaker of the House. In 2014, it wasn’t coincidence that the DFL returned to being the minority party in the House.
Between the sales tax increases that were later repealed and $90,000,000 spent on Bakk’s Palace, it isn’t a stretch to think that Rep. Thissen’s mistakes added up to much more than $100,000,000. It’s more likely that the DFL’s mistakes made in 2013 and admitted in 2014 topped $300,000,000. Though I don’t have the spreadsheet in front of me, the article I linked to earlier talks about “a $443 million tax reduction bill.” Add $90,000,000 for the Senate Office Building to the $443,000,000 and you’re easily over $500,000,000.
Rep. Thissen shouldn’t shoot his mouth off about $100,000,000 mistakes after he joined Sen. Bakk and Gov. Dayton and the DFL majorities in the Minnesota House and Senate in making a series of far bigger mistakes in 2013 and 2014.