Capitol Offenses

State legislators are poised for a spending spree--on stadiums and prisons

In the 2003 session, the Minnesota State Legislature enacted a right-wing agenda that significantly altered the character and identity of the state. Our elected officials cut and cost-shifted more than $4.2 billion out of the budget while denying any tax increases that would have softened the damage done to programs that assisted people across the economic spectrum but were particularly crucial for the most vulnerable and needy. As a result, thousands of teachers were laid off, tens of thousands of people were priced out of access to health insurance, and hundreds of thousands of the state's poor, elderly, and disabled are now living under more brutal conditions than they were a year ago.

The Pawlenty administration justified these actions by claiming that the state's enormous deficit was the result of a "spending problem." With numbing frequency, Pawlenty disingenuously noted that last year's biennial budget was about to rise by 14 percent. But nearly all of that increase--a billion dollars' worth--was a one-time accounting anomaly stemming from a deal then-Rep. Pawlenty helped broker that had the state take over the funding of education (without any means to pay for it) so that local governments could cut their commercial/industrial property taxes.

The real reason for the state's red ink can be gleaned from a story in USA Today, using data compiled from the National Conference of State Legislatures. It shows that while Minnesota ranked 20th in the nation in the percentage increase of its state spending from 1997-2002, it cut taxes by a much larger percentage than any other state during that same period. The largest tax cut, again enacted with Pawlenty's staunch support, occurred just as the nation was plunging into a recession. The $4.2 billion deficit, then, would more accurately be described as a "tax-cutting problem."


Even the draconian cuts to social programs absorbed only half of the deficit. At that point, the fiscally sound course of action would have been for the governor to reverse the tax cuts responsible for the shortfall. But because he and his fellow Republicans were in thrall to the Taxpayers League of Minnesota, Pawlenty chose instead to tap into one-time dollars like the tobacco settlement fund and the budget reserve, to raise fees, to cost-shift duties on to local governments, and to engage in fanciful accounting such as the assumption that there would be no inflation over the next two years.

Consequently, less than three weeks after the close of session, Moody's Investors Service--"the most thorough of the bond houses, and the one we always paid the most attention to," says former Republican Governor Arne Carlson--downgraded Minnesota's bond rating from AAA to AA1, a move that will cost the state millions of dollars in interest on future borrowing. Former finance commissioners from both parties have written that, as a result of last session's fiscal irresponsibility, the state could face another billion-dollar deficit when assembling the 2006-07 biennial budget next year.

In this context, the upcoming session, which begins this Monday, February 2, could be viewed as the lull before the storm. It is an off year between the setting of biennial budgets. Current economic forecasts indicate that the state is facing only a $185 million shortfall in revenues, a margin that continued economic growth might erase by the time legislators convene next month. Despite a change in leadership, the DFL majority in the Senate is showing even less willingness to argue for a tax increase than they did a year ago, when they eventually rolled over and let Pawlenty and his party conduct their budget blitzkrieg.

This is not to say there won't be heated policy debates at the Capitol on boilerplate issues such as health care, education, the environment, and the bonding bill--particularly in the House, where all 134 members are up for reelection in November. But the defining legacy of this year's session most likely hinges on two issues that cut across party lines and could saddle taxpayers with enormous costs in future years, without repairing any of the damage to the state's network of social services: building stadiums and increasing sentences and civil commitments for violent sexual offenders.



Pawlenty has played stadium politics with an adroit mixture of shameless cynicism and plausible deniability. As a state representative, he was a consistent opponent of public funding for stadiums. As a candidate for governor, he made a point of contrasting his anti-stadium position with his DFL opponent Roger Moe's record of advocating for a new Twins ballpark. His refusal to budge from his no-new-taxes pledge despite the obvious and enormous suffering it would cause many Minnesotans was the principal drama of the 2003 session. And yet now, despite his continued insistence that no general state tax revenue should be expended, the governor has inexorably greased the skids for passage of legislation that would enable the construction of at least one new stadium, and perhaps two.

With painstaking deliberation, Pawlenty has stoked momentum for public funding of new baseball and football stadiums that would benefit the billionaire owners of the Twins and Vikings. He appointed former state Sen. Roy Terwilliger, a die-hard stadium booster, to chair the Metropolitan Sports Facilities Commission, and sent the message that the MSFC should drop its long-standing position that the Vikings ought to settle for a Metrodome renovation. He ostentatiously met with Vikings owner Red McCombs, a confab that clearly galvanized enthusiasm for a new stadium within the Vikings organization. He created a 19-member stadium steering committee, overwhelmingly packed with stadium advocates--including, ironically, his old nemesis Moe--and chaired by his closest political ally, former finance commissioner and current chief of staff Dan McElroy, to review proposals for both football and baseball stadiums.

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