Archive for the ‘Taxes’ Category

Rachel Stassen-Berger’s article provides a little levity at a critical time. Ms. Stassen-Berger’s article opens by saying “Minnesota Gov. Mark Dayton will spend his holiday weekend reviewing the minute details of the spending and tax bills the Legislature delivered for his signature as he decides their fate.” If that’s true, it will mark the first time in his administration that Gov. Dayton will have paid any attention to the details of any legislation.

Right before FarmFest 2013, Gov. Dayton discovered the farm equipment repair sales tax in the Tax Bill he personally negotiated with Sen. Bakk and then-Speaker Thissen. After FarmFest, Gov. Dayton promised to repeal the farm equipment sales tax during a special session of the legislature. Then Gov. Dayton and the DFL legislature broke that promise.

In 2012, Gov. Dayton was outraged to find a provision in the Vikings’ stadium bill that gave the Wilfs the authority to charge extra for PSLs, aka Personal Seat Licenses. Like the farm equipment repair sales tax, the Vikings Stadium bill was a bill Gov. Dayton personally negotiated with the legislature.

In the interview, the governor said he had already pored over the lawmakers’ work.

“I spent six hours on Wednesday and about four hours yesterday going through them in detail with staff,” Dayton said. “We went through all the major bills with a fine-toothed comb and asked for some further analysis I’m going to get by the end of the day.”

If Gov. Dayton vetoes the GOP’s tax relief bill, Republicans will hang that veto around the necks of every DFL legislator or challenger in a swing district. Not even Gov. Dayton is that foolish. Here’s why:

The Legislature, on wide bipartisan votes, also approved tax cuts and credits that cost the state cash in its short- and long-term budgeting. Students with college debt, veterans, tobacco companies, families and cities are among the beneficiaries.

Throughout the session, the DFL’s top priorities were for broadband expansion, raising the gas tax and spending more to reduce racial disparities. They voted for tax relief because voting against it would’ve been political suicide but it wasn’t a priority with the DFL. Likewise, it isn’t a priority with Gov. Dayton.

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Chester Rorvig’s LTE sounds reasonable. It’s just missing one thing. First, let’s look at Mr. Rorvig’s LTE.

Rorvig’s LTE starts with “Legislators of both parties, along with transportation experts, agree that Minnesota needs $600 million per year for 10 years to get the state’s roads and bridges up to par.” That’s the conventional wisdom but I’m always skeptical of CW. It’s been wrong too often for me to think it’s reliable.

Rorvig goes wrong when he asks “Could not Democrats agree to divert this vehicle repair sales tax for half of the need, $300 million? Could not Republicans agree to a 10-cent-per-gallon gas tax increase, which, at the rate of each cent raising $30 million, would provide the other half of the need, $300 million?”

First, I’ve written many times that the last gas tax increase didn’t provide nearly the money the DFL predicted they’d need to fix Minnesota’s roads and bridges. The whole idea behind Chairman Kelly’s transportation plan was to provide a more reliable revenue stream.

This is the biggest point of contention I have with Mr. Rorvig’s LTE:

I find it hard to believe that not one Republican would agree to the gas tax increase and that not one Democrat would agree to the vehicle repair sales tax diversion.

It isn’t that Republicans didn’t see the opportunity. It’s that they knew a gas tax increase is an outdated method of funding road and bridge repairs. Couple that with the fact that the vast majority of Minnesotans don’t want the gas tax increase and you have 2 powerful reasons not to raise the gas tax.

After all, the will of the people being governed should be heeded. I know it’s a radical idea but it makes sense.

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Greg Davids, the chairman of the House Taxes Committee, issued this statement in announcing an agreement on an innovative tax cut bill. He should be proud of the accomplishment. Unfortunately, Gov. Dayton is acting like a sourpuss holding the signing of the bill hostage if he doesn’t get his way on more reckless spending.

According to Briana Bierschbach’s reporting, “On Friday evening, DFL Gov. Mark Dayton called the tax proposal ‘within the ballpark of fiscal responsibility,’ but added that he would not sign any tax bill without a budget bill he finds acceptable.” In other words, Gov. Dayton thinks that the tax bill is good legislation but he won’t sign it if he doesn’t get his way. Whatever happened to doing the right thing for Minnesotans? Clearly, Gov. Dayton’s highest priority isn’t to Minnesotans. It’s to the DFL’s special interests.

Some of the components of the tax bill would dramatically help Minnesotans. For instance, Rep. Davids’ bill includes “$90.6 million in agriculture property tax relief for Minnesota farmers, $110 million in tax relief for college graduates paying off student loans through a refundable tax credit up to $1,000, $49 million in tax relief for families who contribute to 529 Plans to save for their children’s college costs, $146 million in property tax relief for every small business in the state by exempting the first $100,000 of commercial-industrial property, $13 million in tax relief for veterans by raising the income eligibility threshold, and increasing the total credit from $750 to $1,000, $150 million in tax relief for working families by expanding the working family tax credit and $32 million to reduce the cost of childcare; by expanding the childcare tax credit, families could earn a tax credit up to $960.”

Whether the spending bill comes through or not, Gov. Dayton should sign Chairman Davids’ tax bill. The thought that Gov. Dayton is holding this tax relief hostage on some questionable policies is disgusting. This exposes Gov. Dayton as the partisan I’ve always known him to be.

The DFL is whining about nothing getting done. Sadly, they’re the architects of that obstruction. It wasn’t the GOP that proposed a $1,800,000,000 bonding bill. It wasn’t the GOP that proposed wasting money on statewide pre-K. It was the GOP, however, that put together a tax bill that helps students with loan debt, parents saving for their children’s college education and provides property tax relief for farmers and small businesses.

If Gov. Dayton doesn’t sign this tax bill into law, then he’s entirely to blame.

UPDATE: Dayton is threatening to veto the Tax Bill:

A $257 tax cut package did pass and is on its way to Dayton’s desk. Dayton says there are many good provisions in the bill, however he is not sure if he will sign it. That’s because of a provision giving approximately $35 million in tax breaks to tobacco manufacturers. On Monday morning Dayton said he would make a decision on signing it and the other session bills in the next 48 hours.

That’s pathetic. Gov. Dayton is willing to sabotage a tax bill that provides property tax relief to farmers and small businesses, that establishes tax credits for paying off student loan debt and that incentivize parents to save for their children’s college education because it might help a tobacco company?

If that happens, then Gov. Dayton should be known as the most incompetent person to ever serve as Minnesota’s governor. That’s pretty astonishing considering the fact that Jesse Ventura was once our governor.

There’s no question that people are resistant to change. They appreciate the familiar, which is why it’s difficult, if not impossible, to change things that are broken. Sometimes, though, a dramatic shake-up is exactly what’s needed. The colonists knew that in the 1770s. There are lots of angry activists in the 21st Century who wonder if it isn’t time for another revolution.

This op-ed, which I linked to in this post, highlights the fact that the “council has broad authority, including the ability to levy taxes” but that the governor is their primary constituent. In the colonists’ times, they started a revolution. One of their chief rallying cries was “No taxation without representation.”

According to, the definition for No taxation without representation “became an anti-British slogan before the American Revolution; in full, “Taxation without representation is tyranny.” I can’t disagree with that last sentence. Taxation without representation is tyranny.

This paragraph especially stands out:

The mayors in their commentary suggested that elected city and county officials could not handle the workload or think “regionally” while representing both their municipality and a Met Council district.

There’s a simple explanation for these mayors’ preference. They want their initiatives to get rubberstamped and put into place ASAP. What politician enjoys the mess that’s created when making sausage? The Met Council is a mayor’s dream. They get their wish list enacted without having to cut deals with uppity peasants.

This nation’s Founding Fathers understood the appeal of mob rule. That’s why they designed a system filled with checks and balances. They wanted to thwart entities like the Met Council. They wanted the system to be messy because efficient governments are usually out-of-control governments that don’t pay attention to the citizenry, aka the uppity peasants.

Here’s the lengthy list of elected officials that signed onto this op-ed:

Scott Schulte is an Anoka County commissioner. Chris Gerlach is a Dakota County commissioner. Jeff Lunde is mayor of Brooklyn Park. This commentary was also submitted on behalf of the following local government officials. County commissioners: Rhonda Sivarajah, Matt Look, Julie Braastad and Robyn West, Anoka County; Tom Workman and Randy Maluchnik, Carver County; Liz Workman and Nancy Shouweiler, Dakota County; Jon Ulrich, Scott County, and Jeff Johnson, Hennepin County. Mayors: Mark Korin, Oak Grove; Kelli Slavik, Plymouth; Jim Adams, Crystal; Jeff Reinert, Lino Lakes, and Dave Povolny, Columbus. City Council members: Jim Goodrich, Andover; John Jordan, Brooklyn Park; Jeff Kolb, Olga Parsons and Elizabeth Dahl, Crystal; Dave Clark and Jason King, Blaine; Brian Kirkham, Bethel, and Bill Krebs, Columbus.

The time for a dramatic reform of the Met Council is at least a decade overdue. Further, there’s never a good time to give government the authority to raise taxes without giving people the authority to boot the bums out of office.

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This op-ed, written by an Anoka County commissioner, a Dakota County commissioner and the mayor of Brooklyn Park, highlights what’s wrong with the Met Council.

Their op-ed opens by saying “four suburban counties and 41 cities across the Twin Cities area have passed resolutions contradicting the group of mayors who wrote ‘Tweaks’ are, in fact, the best model for Met Council” (May 9), defending the current model of gubernatorial control of the Metropolitan Council.”

The next paragraph says “Those mayors argue that the current model is working well, needing only a few changes to the appointment process, and that any move away from gubernatorial control is ill-advised and impractical. They give the impression that counties and cities are working in a ‘highly responsive’ partnership with the council.”

I don’t know who those mayors are but if they think that the Met Council is “highly responsive” to the people living in the 7-county metro, then they aren’t fit for duty because they’re either incredibly dishonest or they’re stupid. This paragraph encapsulates things perfectly:

The council has broad authority, including the ability to levy taxes, charge fees and set regional policy. Cities and counties are the entities most directly affected by decisions of the council, making them the council’s primary constituents. Yet appointment of council members resides solely with the governor, effectively making the governor the primary constituent.

What part of that sounds like the Met Council is responsive to the citizens living within their authority? The Met Council will always be more responsive to the governor than to the citizenry because he’s the person who can hire or fire them. That’s a system that could be called ‘whatever the governor wants, the governor gets’. The last I looked, our system of government was built on the consent of the governed.

The Met Council is built on the principle of governing without the consent of the governed and the principle that there be the power to tax without representation. Here’s a revolutionary concept:

Many cities and counties believe that the council lacks accountability and responsiveness to them as direct constituents and that the authority to impose taxes and set regional policy should be the responsibility of local government elected officials.

This is what the reformers want:

We support reform that adheres to the following principles:

  1. ?A majority of council members shall be elected officials, appointed from cities and counties within the region;
  2. ?Metropolitan cities shall directly control the appointment process for city representatives to the council;
  3. ?Metropolitan counties shall directly appoint their own representatives to the council;
  4. ?The terms of office for any members appointed by the governor shall be staggered and not coterminous with the governor’s;
  5. ?Membership shall include representation from every metropolitan county government, and
  6. ?The council shall represent the entire region; voting shall be structured based on population and incorporate a system of checks and balances.

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The buzz coming from the St. Paul echochamber is all about Gov. Dayton’s soon-to-be-released transportation ‘compromise’ legislation. Ricardo Lopez’s post offers a glimpse into the fictitious drama.

The drama started when Lopez wrote “How to fund the state’s transportation needs over the next decade has emerged as the linchpin for any global agreement to come together in the final week of the legislative session.” Then it escalated when he wrote “Gov. Mark Dayton’s administration is working over the weekend to craft what he is calling a last-ditch compromise to at least partly address billions of dollars in needed road and bridge work.” (emphasis added)

A “last-ditch compromise” wouldn’t be needed if the DFL didn’t insist on another middle class tax increase again. Chairman Kelly’s plan, which Chairman Kelly outlined in this statement, would generate “$3.078 billion over the next ten years” without raising taxes.

Dutifully, Lopez quoted Gov. Dayton as saying that “Transportation will be the tipping point. If that falls apart, I don’t know that we can pull the rest of it together. On the other hand, if we pull that together, I think the framework can be there for the other pieces.” Theoretically, reporters are supposed to ask questions, something Lopez apparently didn’t do. For instance, Lopez didn’t ask why raising taxes is the key when raising taxes didn’t work in 2008.

This isn’t complicated. In 2008, the DFL, with the help of the Override 6, pushed through a major tax increase. I predicted in this post that it wouldn’t be enough because that “bill focuses mostly on transit.”

Further, the DFL had total control of the legislature and Mark Dayton was the governor in 2013-2014. They could’ve raised taxes at any point during that time but didn’t. If raising taxes was the right thing to do, why didn’t they raise taxes then? Wasn’t the DFL interested in doing the right thing then?

The DFL raised the gas tax a nickel a gallon in 2008. Jim Oberstar praised it. Ditto with Steve Murphy, Larry Pogemiller and Tarryl Clark. In fact, Steve Murphy was proud of the tax increases then:

I’m not trying to fool anybody,” said Sen. Steve Murphy, DFL-Red Wing, sponsor of the measure that would increase funding for roads and transit by $1.5 billion a year once it was fully implemented in the next decade. “There’s a lot of taxes in this bill.”

Sen. Murphy was right. There were a ton of taxes in Sen. Murphy’s bill. Despite that fact, the DFL insists that there’s a funding shortfall. If that’s the case, why should we settle for another DFL-sponsored tax increase?

The gas tax increase won’t fix the problem. It would lift money from the taxpayers’ wallets. That isn’t a solution. That’s a rip-off.

Rep. Paul Thissen is the chief DFL spinmeister in Minnesota’s House of representatives. He’s also incredibly dishonest. Friday morning, he was joined by House Deputy Minority Leader Erin Murphy and Rep. Melissa Hortman to spin their attacks against the MnGOP.

I knew they weren’t interested in substantive discussions when Rep. Hortman said “The legislative agenda is geared toward attack literature. We have a $900 million surplus, $500 million ongoing. We certainly could reach a deal on a bonding bill that’s in the middle. We could do a responsible transportation bill. But then they lose the campaign issue of ‘Republicans stopped a gas tax.'”

Rep. Hortman, people can’t take the DFL seriously when they’re advocating a $1,800,000,000 bonding bill and the GOP is proposing a $600,000,000 bonding bill. If that $1,800,000,000 bonding bill passed, it would be the biggest bonding bill in Minnesota history by $750,000,000. It’s nearly double the size of the next biggest bonding bill.

Further, it’s impossible to do a “responsible transportation bill” when the DFL and Gov. Dayton are advocating major middle class tax increase. The DFL has made clear that they won’t consider Tim Kelly’s transportation. Chairman Kelly’s plan, which he wrote about here, would create a Transportation Stability Fund that would raise an additional “$3.078 billion over the next ten years” for fixing Minnesota’s roads and bridges.

Apparently, that isn’t sufficient for the DFL.

Under this proposal, the State of Minnesota would repurpose revenue that is already being collected from existing sales taxes on auto parts, the Motor Vehicle Lease sales tax, the rental vehicle tax and the sales tax on rental vehicles. By placing these revenue streams, estimated at $3.078 billion over the next ten years, in a newly created Transportation Stability Fund, Minnesota would not only provide new money for roads and bridges statewide, but also for small city roads, bus services in Greater Minnesota, suburban county highways, and metro area capital improvements.

Making this change would dedicate $1.44 billion for county roads, $583 million for municipal roads, and $282 million for roads in towns with fewer than 5,000 residents.

In addition to the dedicated funds provided by the Transportation Stability Fund, the proposal would also utilize $1.3 billion in Trunk Highway bonds, $1.2 billion from realigning Minnesota Department of Transportation resources, $1.05 billion in General Obligation bonds, and $228 million in General Funds.

Rep. Hortman spoke about the attack ads that she thinks have already been written on the transportation issue. I hope they have been written because it’s time to criticize the DFL for not accepting an offer that would fix Minnesota’s roads and bridges without raising taxes. If Rep. Hortman wants to whine about how the GOP is offering Minnesotans the type of transportation that they favor, that’s her right.

It’s also great advertising for Tim Kelly’s proposal.

House Deputy Minority Leader Erin Murphy joined in the chorus:

We’ve all done that together. And these last weeks can be very intense as you’re moving your agenda through using the rules and the procedures of course that are in place. I don’t feel that urgency at all in this House leadership in the Minnesota House of Representatives and I think that we’ve been hearing more from the Republican leadership about who’s to blame for the failure of this session than we’re hearing anything about what they’re going to do to actually accomplish what they said they would do for the people of Minnesota.

There shouldn’t be a rush to finalize a bad deal. The DFL’s transportation proposal and the DFL’s bonding bill are terrible deals.

Further, the DFL hasn’t said anything substantive about why they’re rejecting Chairman Kelly’s transportation proposal. They’ve said that it takes money out of the general fund but everyone knows that’s a scam. The DFL doesn’t want that money dedicated because they want it available so they can keep spending irresponsibly.

Watch the entire DFL dog and pony show here (if you can stomach it):

According to this article, the St. Cloud School Board voted “to ask voters for money to build a new Technical High School and remodel Apollo.” St. Cloud Superintendent of Schools Willie Jett will work on “details of the project’s cost and when the vote would happen.” The vote was 6-1, with Bruce Hentges voting against the measure because the Board wouldn’t consider his preference, which is “building one high school that combined Tech and Apollo.”

What’s stunning is that the Board apparently didn’t consider the taxpayers. They didn’t consider a proposal put together by Claire VanderEyk and Sarah Murphy to fix Tech. Last fall, the School Board asked voters to approve $167,000,000 in bonding authority to build a new Tech High School, refurbish Apollo High School, improve security and buy technology.

After the vote failed, Ms. VanderEyk and Ms. Murphy inspected the existing Tech High School. Ms. VanderEyk and Ms. Murphy are Tech graduates and licensed architects. After taking notes of what needed to be fixed, they submitted those notes to a licensed contractor. The contractor put together an estimate on how much it would cost to fix Tech for the next 15-25 years. That estimate was for $15,696,000. Voters were told that the cost of building a new Tech High School would be $113,800,000.

That’s a difference of $98,104,000 in cost to the taxpayer.

Voters in November rejected a $167 million referendum that would have built a new Tech and remodeled Apollo. Concerns raised about that plan seemed to focus on whether Tech could be remodeled the future of nearby Clark Field and what would happen to the old Tech once a new one was built on land the district owns in south St. Cloud.

The reality is that a significant portion of the people who rejected last November’s referendum rejected it because the Board’s proposal amounted to asking for a blank check. They rejected it because the Board shrouded the blueprints in secrecy. The School Board acted in a suspicious, arrogant manner, essentially telling taxpayers to write them a blank check on a project that the Board didn’t explain in any detail.

Given those facts, it’s surprising that the margin of defeat wasn’t substantially more than 1,067 votes. Given the Board’s behavior, it’s amazing that the taxpayers didn’t run the Board out of town. This Board should table this proposal and let the next school board submit their proposal. Unfortunately, this Board is too arrogant to let that happen.

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Saying that the Met Council is accountability’s enemy isn’t just conservative consensus anymore. Thanks to Katherine Kersten’s reporting, we know that Jim Nobles, Minnesota’s Legislative Auditor, declared that the Council lacks “accountability,” “transparency” and “credibility.” Further, thanks to Kevin Terrell’s report, we know why the Council lacks accountability, transparency and credibility.

For those who haven’t given the Met Council much thought, it’s time to start thinking it through. For instance, how would the average citizen feel if they found out that “nearly all other large metro regions are governed by a ‘Council of Governments, composed predominantly of local elected officials accountable to the voters. Yet none of these COGs has the breath-taking power of the Met Council'”? How upset would people be if they found out that the “Met Council is the only regional authority that can independently increase taxes” but doesn’t “[provide] direct representation”?

Kevin Terrell’s report is as fascinating as it is infuriating. On pg. 25 of the 42 page report, Terrell lays out what’s at stake and some options:

GOVERNANCE: If you err, err on the side of more democracy, more local involvement, more elected officials. Every other council has more democratic governance than MSP.
Sample alternative governance structures
Gubernatorial appointees
Description: ?Leave the Council 100%, or a majority, appointed by the governor.
Advantages: Some believe this model defeats parochial interests in favor of regional “needs” and “efficiency.”
Disadvantages: We continue to have an unaccountable body with authority over duly elected officials.

That’s one option. Next, think of replacing the Met Council with an elected body like they have in Portland, OR:

Advantage: We would have representatives who are directly accountable for regional policy, spending decisions and outcomes.
Disadvantage: We already have local representatives who are charged with, and capable of dealing with the issues at hand. Why do we need another layer of government?

Another option is called the “Council of Governments” model:

Description: ?An assembly of existing elected officials, with representatives from counties and municipalities.

  1. We would have directly accountable and existing elected officials responsible for decisions.
  2. It mirrors the structure of other major regional authorities and would allow the region to eliminate several layers of inefficiency in transportation planning.

Disadvantage: Like most democratic processes, it can be a noisy and messy path to compromise and progress.If accountability is important to you, the current Met Council structure is the worst governing model imaginable. Saying that the Met Council “defeats parochial interests in favor of regional ‘needs’ and ‘efficiency'” is code for saying they prefer going through the motions so they can rubberstamp the governor’s agenda. They love being able to raise taxes without having to face the voters whose taxes they raised. It’s a liberal’s dream job.

Dan Wolgamott’s op-ed in tomorrow’s St. Cloud Times isn’t a portrait in honesty. Then again, that isn’t my expectation from Wolgamott.

It isn’t that Wolgamott told some outright whoppers. It’s that he omitted the most important details from his op-ed. Wolgamott started by criticizing retiring Sen. John Pederson. In the interest of full disclosure, John represents me in the Minnesota Senate. I consider him to be a friend, too. But I digress.

The opening paragraph of Wolgamott’s op-ed says “Once again, Republican Sen. John Pederson has turned his back on our community. He cast the tie-breaking vote last week to defeat the Senate bonding bill, which would’ve created 39,000 jobs across the state and invested more than $24 million locally in job creation, veterans and making our area safer.”

Wolgamott’s missing integrity is exposed by the fact that Wolgamott didn’t mention the fact that the bonding bill that Sen. Pederson voted against was the biggest in Minnesota history at $1,800,000,000. That’s more than $750,000,000 bigger than the biggest bonding bill in state history. It’s bad enough to pass the biggest bonding bill in state history if it’s bigger by $100,000,000. It’s quite another to attempt to pass a bonding bill that’s almost twice the size of the biggest bonding bill in state history.

Then there’s this cheap shot:

Unfortunately, Pederson chose partisanship over progress and voted against $19 million for needed upgrades and safety measures for the St. Cloud correctional facility. He voted against $1.5 million in economic development money for Friedrich Regional Park in St. Cloud. He even said no to veterans, $3.5 million for the St. Cloud Armory.

Let’s turn the tables on Wolgamott. Is he saying that he wouldn’t have hesitated in voting for a bill that’s that big? Would he hesitate in voting for a bill that would tax the ‘state credit card’ to the max?

Those are examples of deception by omission. This is an example of outright BS:

As your next state senator, I will be a tireless advocate for our community, and the priorities we share, over partisan games and gridlock.

Last year, I wrote this post to highlight Wolgamott’s willingness to spend recklessly:

It’s time for us to invest in our roads and bridges, which is why St. Cloud needs better leadership than State Sen. John Pederson. As made clear in two recent articles in the St. Cloud Times, Pederson has some thoughts on the state’s transportation network. As the Republican lead on the Senate Transportation and Public Safety Committee, he could play a vital role in providing St. Cloud the comprehensive transportation investment we need.

Instead, Sen. Pederson backs a plan that not only shifts money away from our schools and services for our most vulnerable residents, but relies heavily on borrowing for our roads and bridges, putting the costs on the state’s credit card. This plan depends on action to be taken by future legislatures. However, there is no guarantee future legislatures will make those decisions. Instead of stability, this is another example of politicians promising something in the future to justify ducking their responsibilities now.

Back then, Wolgamott advocated for a middle class tax increase to pay for fixing Minnesota’s roads and bridges. That’s besides Wolgamott’s advocating for additional middle class tax increases to pay for transit projects.

To summarize Wolgamott’s limited history, he’s advocated for middle class tax increases to pay for fixing Minnesota’s roads and bridges. Wolgamott has advocated putting nearly $2,000,000,000 on Minnesota’s credit card rather than fixing Minnesota’s economic fundamentals. Those aren’t solutions. They’re gimmicks.

Finally, does Wolgamott really think that Sen. Pederson wouldn’t have voted for a responsible bonding bill that included fixing the St. Cloud Armory and the St. Cloud prison? If Mr. Wolgamott is peddling that BS, then he isn’t honest enough to represent St. Cloud in the State Senate.