Minnesota Eats Itself

Another Pawlenty budget, another round of bloodletting

A striking number of moderate and old-school Republicans around the country (few of them in Congress, alas) have turned vocal in their dissent from Bush's fiscal approach--including such eminences as former Minnesota Governor Arne Carlson. In a few states, blocs of Republican legislators have broken with the national party when forced to choose between fiscal solvency on the home front and the costly, unfunded mandates of Bush's No Child Left Behind program. It's hardly a stampede, but a growing herd of Republicans seems to want some distance from Bush, or at least the consequences of his policies.

But Tim Pawlenty, it should go without saying by now, will never be one of those Republicans. It's the ambition, stupid: The governor has harbored national aspirations from the start. Leading up to the 2002 campaign season, remember, Pawlenty was poised to run against Paul Wellstone for the U.S. Senate until summoned to heel in that famous phone call from Dick Cheney, who advised him that the Bush administration would look kindly on his standing aside so that Norm Coleman could challenge Wellstone. Run for governor instead, Cheney suggested.

Since doing so, Pawlenty has become a sporadically hot topic in national GOP chatter. And it's no secret that his reputation for refusing to raise taxes is the key to his popularity with the Bush circle and his future as a presidential or vice-presidential contender. At a November conference sponsored by the Minnesota Council of Nonprofits, the capitol reporter for Twin Cities Public Television, Mary Lahammer, told an auditorium full of people that the number of legislators who have again signed the Taxpayers League's no-tax pledge is down to 22. "But Pawlenty will do it, because Pawlenty truly is a presidential candidate," Lahammer said, before dishing at great length about the warm, buzz-generating welcome Pawlenty received from Republican bigwigs at last summer's convention.

You can hear what's at stake for Pawlenty personally in the words of his colleague, House Majority Leader Steve Sviggum. It's widely believed that voter resentment over the state's cuts in aid to local governments cost Sviggum's caucus 13 seats in the last election, causing a fair number of House Republicans to become more amenable to a tax increase. But when asked about the possibility of a budget bill containing new taxes, Sviggum sounds like the line in the sand is more a matter of personal loyalty than political philosophy. As he told the Star Tribune earlier this month, "I wouldn't do that to him."

 

II. When Is a Tax Not a Tax?

Pawlenty's last biennial budget garnered $394 million worth of new fees from the citizenry by a variety of means, such as hikes in the price of state park passes. Aren't these tax increases by another name? The governor and Taxpayers League legislative director David Strom both take the position that fees are not the same thing as taxes because taxes are meant to pay for "general" goods for the general public, while fees are paid for "particular" goods by particular individuals.

This distinction is hooey--specious in principle and difficult to apply in practice. The American Heritage Dictionary says that a tax is "a contribution for the support of a government required of persons, groups, or businesses within the domain of that government." A user fee for government services is in effect a kind of consumption tax, and this explains why Strom and Pawlenty aren't eager to tar user fees with the label of "taxes" at all: They like consumption taxes, because they're so regressive. In fact, this is one reason Republican economic ideologues have stepped up their calls for a national consumption tax in the past year or so. Nominally a consumption tax encourages saving money (i.e., non-consumption), but it's also a great way to assure that the toiling classes, from lower all the way to upper-middle incomes, will continue to pay the highest portion of their income in taxes, since they have no choice but to use most or all of their income to consume life's necessities.

User fees are a politically potent tool in part because they make sense, or at least have gained acceptance, in some settings. People seem to have largely accepted state park access fees, for instance, even though every citizen already "owns" the land in principle. But what about public defenders for citizens accused of crimes, a remedy originally devised by the courts specifically for defendants who couldn't afford attorneys? According to the governor, the indigent ought to pay fees for services like everybody else. (The Minnesota Supreme Court disagreed, declaring that it was unconstitutional for the state to impose a fee on accused persons who were represented by a public defender.)

Or how about the care of children and senior citizens? Are they items of the general or the particular welfare? Increased fees on facility licenses and family co-pays coupled with budget cuts and eligibility restrictions have forced nearly a quarter of the state's child care facilities to close their doors in the past two years, leaving many parents to choose between substandard child care and unemployment. And the largest single pot of money on Pawlenty's list of new fees was $98 million raised over a two-year period by tripling the surcharge (after it was raised nearly 50 percent just the year before) on Minnesota nursing homes participating in the state's medical assistance program. In a maneuver specifically designed to help the nursing homes pay the surcharge, the state has allowed the facilities to charge their residents an extra $5.56 per day. Consequently, more than 10,000 elderly and disabled Minnesotans are now forking over an extra $2,000 per year, with no commensurate increase in goods and services provided, and regardless of whether or not they participate in the medical assistance program. The nursing homes are merely middlemen, sending that money along to the state, which deposits it in the general fund for discretionary spending.

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