January 2005 Archive

January 31, 2005
The news at home

In and among the news from the Iraqi elections, there are some local items to pick off. So let's get to it. It looks like last year's presidential election and the fallout in the following months is taking a toll on the popularity of Minnesota's U.S. Senators. The Star Tribune has the results of a new poll today that show DFLer Mark Dayton in particular taking a big hit (I wonder if the GOP will complain about the poll this time?). Here's the lead from Rob Hotakainen:

Minnesota Sens. Mark Dayton and Norm Coleman both took hits to their public image in the past year, with their job approval ratings falling below 50 percent, according to the latest Minnesota Poll.

Dayton, a Democrat who's up for reelection next year, took the heaviest blow: His approval rating declined by 15 points in a year, from 58 percent to 43 percent. The approval rating for Coleman, who just began his third year in office, fell by 7 points, from 54 to 47 percent.

Dayton's job approval decreased among all categories of Minnesotans, grouped by age, education, income, party and ideology, with the largest drop among men -- down 27 points -- and 18- to 24-year-olds -- down 31 points.

Coleman's biggest declines came among 25- to 34-year-olds -- down by 19 points -- and those living in the seven-county metropolitan region -- down by 13 points.

"I don't like either one of them," said Joe Cornet, 62, of Vadnais Heights, one of the 832 Minnesotans who took part in the poll.

How's that for bipartisanship? Personally, I'm still suffering from poll hangover from the election. We did so many of them, and they showed the race between George W. Bush and John Kerry so close in Minnesota for so long that I started tuning them out. I'm sure I'll recover in time for next year's election.

Speaking of elections, there's one this year in both St. Paul and Minneapolis. The news over the weekend came out of Minneapolis. Here's the story from MPR's Art Hughes:

Minneapolis Mayor R.T. Rybak formally announced his re-election bid Sunday near the place he started his first campaign for elected office four years ago--almost to the day. At that time, he waged a grassroots battle against an established incumbent he felt was out of touch residents. Now, Rybak has a political track record that makes him the target for challengers.

Four years ago, Rybak gathered a handful of friends and family in a small neighborhood store. He added his name to the list of unknown candidates challenging a strong and politically powerful Mayor Sharon Sayles Belton.

The crowd of supporters this time around filled a much larger space a few blocks down, as Rybak officially expressed his wish to serve again. He says he's championed the construction of more than 2,000 affordable housing units and 4,500 new jobs in Minneapolis. He also touts Xcel Energy's decision to convert the Riverside coal-burning power plant to natural gas and progress at the state level to add bus lanes to Interstate 35-W.

"I told you I'd be a cheerleader when this city needed it and I have been. I've stood up and rallied this town when it needed it. But I've also been the fierce defender that we've needed when any people in our city are under attack," Rybak said.

Rybak is being challenged this year by Hennepin County Commissioner Peter McLaughlin, also a DFLer.

In the Pioneer Press, Bill Salisbury has an analysis of Gov Tim Pawlenty's budget. Here's some of what he has to say:

Pawlenty's primary goal was simple: To erase a projected deficit and balance the budget without increasing state taxes.

In addition to balancing the books, the Republican governor recommended modest spending increases for schools, colleges and universities, courts and prisons, and health and social services for the poor, elderly and disabled.

While the additional money probably is needed to maintain Minnesota's high-cost public services, it's also smart politics. He proposed spending on programs for which, outside staunchly conservative circles, there's popular demand.

Take K-12 education, for example. Pawlenty proposed 2 percent annual increases in basic per-pupil spending. After three years of flat state funding, teacher layoffs and rising school fees, that uptick in state aid looked pretty good to school advocates. To be sure, it's not all they want it never is but it's enough to mute criticism of the governor.

And that may help save his political hide. Minneapolis pollster Bill Morris has said his surveys of suburban school districts showed that as many as one-fourth of voters there, the heart of Pawlenty's political base, indicated they would vote against him in 2006 if he failed to adequately fund schools.

And what kind of grade do Pawlenty and the Legislature get for running Minnesota? Well, according to a story from MPR's Michael Khoo, not too bad:

The Government Performance Project assessed all fifty states on four levels: management of money, people, infrastructure, and information. Minnesota emerged with a composite B+, behind only Virginia and Utah and tied with four other states.

But project editor Richard Greene says last year's legislative stalemate caught the attention of researches. Greene says the squabbling was uncharacteristic for Minnesota -- and could be serious if it's not contained.

"Were Minnesota not such a historically well-managed state, this kind of thing would have been far worse for it. It's a state that was able to, at least for the short, to some large extent, rest on its laurels," he said.

Last year, House Republicans, Senate Democrats and Governor Tim Pawlenty found themselves unable to agree on the most pressing issues of the session. They left virtually empty-handed. Don Kettl is a research director for the project, which is funded by the Pew Charitable Trusts. He says Minnesota wasn't alone in facing difficult choices last year. First, he says, states were still struggling with sluggish economies. Second, he says the federal government was pushing expensive mandates down to already cash-strapped states. But that, he says, wasn't all.

"And then the third thing is that we have this problem of divided government with clear divisions between the reds and the blues and states like Minnesota that are very close, it makes it that much harder to reach consensus about the other two problems."

No kidding. And Minnesotans making the divisions even tighter. It'll be interesting to see what the survey shows next year.

Posted by Mike Mulcahy at 6:59 AM

January 28, 2005

I got a call yesterday from a woman on MinnesotaCare. She and her husband own a coffee shop in Minneapolis. She says they work seven days a week, take care of their kids without daycare, and are greatly offended by Gov. Tim Pawlenty's characterization of Minnesota's subsidized health care programs as "welfare health care." She was reacting to a story by MPR's Tom Scheck. If you didn't hear it the other day you can find it here. Here's part of the story:

"It is not fair to the rest of the obligations and responsibilities we have to stand by and say, 'It's OK to grow welfare health care at 27 percent, when we're also trying to fund K-12 education and transportation, and so many other priorities that I know Minnesotans want funded as well," Pawlenty said.

But the governor's characterization of MinnesotaCare as a welfare program is a bit misleading. The Minnesota Department of Human Services says less than 1 percent of the 90,000 adults on MinnesotaCare actually receive cash assistance from the state's welfare program. Another 3.5 percent receive food stamps.

In fact, supporters of the program say MinnesotaCare was created specifically with workers in mind -- to assure that those with low incomes had access to health care. Sen. Linda Berglin, DFL-Minneapolis, helped create MinnesotaCare in 1992.

"It certainly would help if we could stop having rhetoric about welfare health care costs. People who receive MinnesotaCare are working people. To characterize them as being on welfare is very misleading to the public, and very disparaging of hardworking Minnesotans," says Berglin. "These people are working and paying taxes. We'd like to keep them self-sufficient by making sure they have the low-cost health care they need, so they can continue to be working and to be paying taxes."

Berglin says everyone on the program pays premiums and co-pays, so they're contributing somewhat to their insurance costs.

The woman who called me said if Pawlenty thinks she's on welfare he should come and try to do her work for a week to see what "welfare" is like. On the subject of MinnesotaCare I also got an e-mail from Sheila Hart of Hibbing. She is on MinnesotaCare, has cancer, and has threatened to die on the steps of the Capitol when she runs up against the $5,000 cap on benefits. Here's part of what she wrote:

Do you know that Minnesota has a law giving its citizens the right to hunt?

Maybe we need a law that gives us the right to live. Maybe we need a law that
would preserve the Health Care Access Fund to be used only for its original use:
to pay for medical treatment. Not state health care administrative costs. Not
for the governor's budget balancing act. What does the public think? This
almost two billion dollars collected by special tax since 1993 has seen less
than 50 percent go to health care - more to general fund and other needs.

Everytime anyone pays a doctor bill, buys prescription drugs, or pays for
any kind of health care, a percentage is charged for the 1 percent or 2 percent special appropriation tax that goes to the health care access fund to be used to pay for MinnesotaCare health plans. Enough has been collected through the years, and according to the Citizens Council on Health Care, look it up at, it collects 148 percent of what it actually needs to pay for all
the medical bills. So why does the governor say it's costing the state money?
Because he's been diverting the funds since 2003!

I'd like to hear more of what you think about the health care issue. Click on the send a question link to tell me what you think. Actually I prefer comments to questions. Let's get a debate going.

The smoking ban is moving at the Capitol, although the first committe that heard it diluted it quite a bit. Here's Mark Brunswick's lead from the Star Tribune:

A bill that would impose a virtually complete ban on indoor public smoking in Minnesota was significantly scaled back Thursday when a House committee voted to prohibit smoking in restaurants but amended the proposal to exempt other businesses such as bars and the lobbies of hotels.

The bill, considered to be one of the most controversial of this legislative session, is expected to face scrutiny -- and maybe more amendments -- as it makes its way through the lawmaking process. While Gov. Tim Pawlenty has said he would sign a bill banning smoking, and the proposal has bipartisan support, diverse groups from bar owners to doctors are weighing in. A Senate version has yet to be heard in committee.

And finally, the 2005 Legislature has accomplished something. Gov. Pawlenty signed the first bill of the legislative session Thursday-- a measure that allows people who make tsunami relief donations before the end of this month to deduct them on their 2004 tax returns.

Posted by Mike Mulcahy at 7:02 AM

January 27, 2005
Long odds?

It's not surprising Gov. Tim Pawlenty is facing some criticism for his proposal to open a state-sponsored casino in the Twin Cities to generate revenue for Minnesota and three northern tribes. What is surprising is where some of the criticism is coming from. Number one, from Republicans. Pat Doyle had this lead in the Star Tribune:

In a rift between Republicans over the future of gambling in Minnesota, Senate Minority Leader Dick Day on Wednesday declared Gov. Tim Pawlenty's proposal for a tribal-state casino "dead on arrival" unless it can be located at Canterbury Park or perhaps at a future Anoka County harness track.

"There are very few of our caucus members who would endorse it unless it was teamed with racino," Day said, referring to putting slot machines at a track, which he supports. "If it was by itself ... the Democrats and the governor would have to get it passed in the Senate. Good luck there."

The second unexpected source of criticism is the leader of one of the bands Pawlenty wants the state to partner with. Patrick Condon of the Associated Press had this story:

The chairman of an Indian tribe looking to build a new casino with the state said that Gov. Tim Pawlenty dropped a big obstacle in the plan's path by calling on the partner tribes to come up with $200 million to get it started. "If we had access to that kind of money we certainly wouldn't be pitching a casino in the metro area," George Goggleye, chairman of the Leech Lake Band of Ojibwe, said Wednesday.

The White Earth Band of Ojibwe and the Red Lake Band of Chippewa - the other likely partners in a state-tribal casino - also couldn't afford it, Goggleye said.

The chairmen of the White Earth and Red Lake tribes did not immediately return phone calls seeking comment.

Pawlenty's chief of staff, Dan McElroy, said the $200 million figure is "an estimate and certainly subject to being discussed."

Does this criticism suggest the governor announced his plan before it was fully baked? Well, sure. But that doesn't mean Pawlenty won't get what he wants.
MPR's Michael Khoo summed things up with this tidy bit of analysis:

All of this leads to a legislative irony. A majority of lawmakers may favor new gambling opportunities -- but if they can't agree on which opportunities, then Day says gridlock could preserve the status quo. Pawlenty, in his budget address, had a warning for lawmakers who object to his use of casino revenue.

"This is our budget. We've got $200 million. It's no different than if we've got $200 million from something else. If the Legislature wants to mess with it, they've got to fill the hole. It's their problem," Pawlenty said.

That reality may, in the end, be the most persuasive argument for lining up legislative support. Republican House Speaker Steve Sviggum supports both the racino plan and the governor's tribal partnership -- and he notes that the governor has actually left the door open for both.

However, with a much reduced majority following last fall's elections, Sviggum says he's not sure he can pass a gambling bill at the moment. But time, the speaker says, is on his side.

"As you get to February, March, and April and people see what their choices are, and their choices are fair gaming versus monies for education, monies for nursing home increases, higher education -- I think the Legislature overwhelmingly will be supporting the gaming proposal," says Sviggum.

Why have two of Minnesota's former finance commissioners become such harsh critics of Tim Pawlenty? I'll leave it for you to ponder, but they were at it again Wednesday. Here's some of what they had to say from MPR's Laura McCallum:

Less than a day after the governor released his budget proposal, the debate over its merits was in full swing. Former finance commissioners Jay Kiedrowski and John Gunyou were among the critics. They say the governor has turned to the wrong solutions for balancing the budget -- namely accounting gimmicks, gambling money and property tax increases.

Pawlenty wants to erase a projected $700 million deficit with a combination of spending cuts, money from a new casino and other revenues. Kiedrowski, a Democrat, singled out Pawlenty's plan to accelerate the collection of certain taxes.

For instance, sales taxes on auto leases would be paid up front rather than over the life of the lease. That, Kiedrowski says, constitutes a gimmick. He says Pawlenty's budget also presumes that school districts will raise property taxes.

"I think it's ironic that this conservative governor is for more financial gimmicks, more debt, more gambling and more property taxes. I was hoping we were going to see a better budget than this," says Kiedrowski.

While Kiedrowski had hope, it sounds like Gunyou sort of knew what was coming:

"The governor is so irrationally committed to his 'no tax' pledge that he won't even reform our state's volatile tax system on a revenue-neutral basis," says Gunyou. "Minnesota has the most volatile tax system in the country. We need to fix it, and get off this fiscal roller coaster."

What do you think of the budget? Send me some comments, and I'll round them up in a future letter.

Posted by Mike Mulcahy at 6:54 AM

January 26, 2005
Paying more for less

Gov. Tim Pawlenty Tuesday proposed the biggest two year budget in Minnesota's history. So why are so many people feeling short-changed? The governor laid out a $29.667 billion budget that represents a 5.8 percent increase in spending over the current biennium. The two most controversial aspects of the plan are the governor's move to trim the projected growth in spending for state subsidized health insurance, and his plan to open a state sponsored casino in the Twin Cities.

Here's more on both issues. First, health care. MPR's Tom Scheck has the story:

The governor is quick to point out that the human services portion of his budget will still rise 15 percent over the next two years. But it won't rise fast enough to keep everyone eligible for state health insurance.

The governor is recommending cuts to MinnesotaCare, a state program that provides subsidized insurance to low income workers. Adults without children and parents who are on the higher end of the income scale would no longer be eligible for the program. Children would still be eligible.

Sen. Linda Berglin, DFL-Minneapolis, says Pawlenty's plan drastically eliminates health insurance for people who need it.

"Those jobs are just as important as my job," says Berglin. "The governor doesn't give speeches to banquets and luncheons without having people in the kitchen doing the work. And those people are earning an income, doing a good job, and they don't have health care and he's cutting them off."

State figures say 27,000 Minnesotans will no longer be eligible for MinnesotaCare under Pawlenty's plan by next year.

But the governor says there would still be a safety net for people who desperately need care. He says anyone cut off from MinnesotaCare would be eligible for General Assistance Medical Care, or GAMC. That's a program that provides coverage for people who make no more than $600 per month.

In addition to the cutbacks, the governor manages to find some new revenue while saying he sticks by his "no new taxes" pledge. He does it by proposing the state and three Indian tribes in northern Minnesota split the take from a new casino in the metro area. Here's MPR's Tom Robertson on the gambling issue:

Tribes would be required to pay a one-time licensing fee of $200 million. After that, the state and tribes would share the profits. Minnesota would get a projected $114 million in casino profits each year. Pawlenty says the plan would bring fairness to Indian gambling in Minnesota. "As we talk about fairness," Pawlenty said, "we define that not just as what's fair to the state of Minnesota, relative to the growth in the industry, but also what's fair to what's going on in comparable states, and what's fair to the 85 or 90 percent of Native Americans in our state who don't belong to the tribes who are involved in large casino gaming operations in our state."

Eighty-five percent of Indians in Minnesota live in the northern part of the state, on the White Earth, Red Lake and Leech Lake reservations. The three tribes are pushing legislation similar to Pawlenty's plan. The governor met with those tribal leaders just a few weeks ago, including Erma Vizenor, chair of the White Earth Band. Vizenor says the governor's goals are generally in line with theirs.

"There certainly is momentum," Vizenor said. "When the governor is working on redesigning Indian gaming in the state of Minnesota with a partnership with tribes that represent a majority of Indians in the state, yes. And White Earth is very pleased to be working with the governor's office and looks forward to refining and defining our common goals."

Wealthier tribes around the Twin Cities oppose another Twin Cities casino. They say it would cut into their profits. John McCarthy, director of the Minnesota Indian Gaming Association, describes the governor's plan as a "cynical effort to create disunity among tribes." He says it will transform Minnesota into a "Las Vegas of the north."

Of course the budget plan marks the beginning of a huge political debate, really the beginning of the 2006 campaign. MPR's Michael Khoo has a preview of that:

The gambling issue cuts across party lines -- but Democrats generally argue that casino payments are unstable and shouldn't be used to finance state government. DFLers also criticized the governor's plan for increased school funding, noting that a significant portion of it is to be built on voter-approved property tax increases. Larry Pogemiller of Minneapolis chairs the Senate Tax Committee. He says the governor's budget, far from holding the line on taxes, merely shifts them to homeowners.

"There is going to be, again, increases in property taxes on every homeowner in this state at high levels. Now, is that fair?"

Pawlenty, however, attempted to pre-empt some of the expected sniping. He says if Democrats don't like elements of his plan, they'll need to show a better way of balancing the budget.

"And so they go around the state and say, well, it's not enough for this, enough for that and Pawlenty won't raise taxes, blah, blah, blah. Well, where's your plan? And if you believe we should increase taxes come on out with it. Let's have the debate. And don't -- come on, let's go."

Democrats in both the House and Senate, however, studiously avoided any talk of raising taxes, arguing that they'll present their alternatives after they've had a chance to study Pawlenty's budget in greater detail. Other groups weren't so shy. From state employee unions to social service advocates to local government officials, a chorus has risen in support of tax increases. St. Cloud Mayor John Ellenbecker says previous cuts in state aid to cities have pushed municipal finances to the edge. And he says it's time to rethink the no-new tax pledge and to increase general state revenue.

" We've had continued increases in demand for services with only the property tax to fall back on. And we just don't think that that's appropriate. We really think that the revenue issue has to be addressed by the governor. And we don't think it's being addressed by this budget."

Ellenbecker says he hopes Democrats and even Republicans will force Pawlenty to abandon his anti-tax position. But so far there's little open enthusiasm for proposing new income or sales taxes. DFL House Minority Leader Matt Entenza says the first thing he'll do is take the governor's plan on a Minnesota road show, soliciting citizen advice.

A good old-fashioned budget road show. Now that's entertainment! I'll have more on the budget and reaction tomorrow.

Posted by Mike Mulcahy at 7:03 AM

January 25, 2005

Like almost everybody else, I've been assuming that Gov. Pawlenty would pay the bill for higher spending on K-12 education from the state's general fund. Well, you know that old line about never assuming. It looks like a good chunk of the extra spending for schools would come from property tax increases, which you remember aren't covered by the governor's "no new taxes" pledge. Patrick Sweeney breaks the story in today's Pioneer Press:

Property taxes for schools would increase an estimated 23 percent next year under the budget that Gov. Tim Pawlenty is scheduled to recommend to legislators today.

In each of the two years after that, the portion of property taxes homeowners pay for schools would rise about 9 percent annually, the Education Department predicts.

Changes that Pawlenty is urging in the way school districts pay for their operations would accelerate a trend in place since the recession of 2001 toward property taxes paying an increasing share of school expenses. The property tax increases have come as lawmakers and Pawlenty struggled to cope with a series of state budget deficits, the most recent of which is a $700 million shortfall predicted for the next two years.

The result is that a huge property tax cut that homeowners and businesses received under former Gov. Jesse Ventura is gradually being eaten away by tax increases approved in school district referendums across the state.

So much for that Big Plan Gov. Ventura had. Sweeney's story goes on to quote an education department official who says local voters will have a choice to accept or reject the increases. DFLers are already steamed about the plan. They will no doubt use it to back their contention that the "no new taxes" is a shell game that replaces a higher income tax with a higher property tax.

Another big target in Gov. Pawlenty's budget plan will likely be state-funded health care programs. MPR's Tom Scheck takes a look at one called General Assistance Medical Care:

There are about 35,000 Minnesotans who are on General Assistance Medical Care or GAMC. In order to qualify, you have to be an adult without children who makes no more than $600 dollars a month. It's supposed to help those who have no other options for health insurance. Many on the program are homeless. Others work part time.

The problem with GAMC is it's expensive. The state paid $243 million to run the program last year. It's projected to increase to $379 million by 2007. Gov. Pawlenty says the growth of GAMC and other state-run health care programs need to be reigned in. Minnesota is only one of a handful of states that offers a program for low-income single adults.

In December, Pawlenty hinted that GAMC will see significant changes.

"If you're not a senior, you're not disabled, if you don't have children in other words you're an able bodied, single adult who can otherwise perhaps find an opportunity in the marketplace," Pawlenty said. "Those are the kinds of people we're going to look at and say are our benefits out of line?"

Pawlenty would not elaborate on how state run health care programs would fare in the upcoming budget. But some who advocate on behalf of the poor worry that Pawlenty will eliminate GAMC and roll the people currently on it into MinnesotaCare. That's the state's health insurance program that requires a enrollees to pay a monthly premium and offers fewer services. They say many people would opt out of the program because of the cost of the premiums and would go without care, at least until it's absolutely necessary.

The problem with that, Scheck points out, is that hospitals, clinics, and later down the line people with private health insurance, end up picking up the tab for that expensive, so-called uncompensated care. And that means in the absense of a big picture fix the cost of health care for everyone keeps going up. It was exactly that problem that led state officials to create the MinnesotaCare program a dozen years ago.

After talking about the possibilty of new casinos in Bloomington and Anoka County, you could almost bet that other cities would weigh in. Both the Pioneer Press and the Star Tribune report that St. Paul is looking at the allure of slot machines. This is from Jackie Crosby's story in the Strib:

Locations being bandied about range from the Radisson Riverfront Hotel (which Lantry said owes the city some $34 million) to land across from Xcel Energy Center, which is owned by the city and abuts the site where Kelly wants to build a Twins ballpark. The riverboat idea remains a consideration as well.

Some civic leaders speculated that Pawlenty might be interested in creating a gaming commission that would review proposals from cities interested in establishing casinos. The process could be similar to one set up last year to consider ideas for building stadiums for the Twins and the Vikings.

But the process would be complicated by the federal, state and local laws that control gambling. And it's unclear how much support Kelly could garner on the City Council or among St. Paul's legislative delegation.

St. Paul and Bloomington aren't the only cities under consideration. Others could include Alexandria, Stillwater and St. Cloud.

In Minneapolis, Mayor R.T. Rybak said only that "my focus during this legislative session is going to be public safety, local government and education funding and the city's bonding proposals."

Even if the tribes bought land in the cities, they would face scrutiny from the Bureau of Indian Affairs and the U.S. Department of the Interior. And some wonder how the expansion of gambling would play out in the conservative states that helped hand President Bush a second term.

Of course Bush lost Minnesota. But he'll remember that Democrat mayor of St. Paul who went out on a limb and endorsed him, won't he?

Posted by Mike Mulcahy at 6:51 AM

January 24, 2005
B minus one

It'll be the Eagles versus the Patriots in the Super Bowl, but the big game at the Capitol this week will be the beginning of the budget debate. Gov. Pawlenty releases his plan on Tuesday. The big question is how he fixes the $700 million (or $1.4 billion counting inflation) shortfall without raising taxes. Pawlenty has already proposed spending another $300 million over the next two years on k-12 education, so that makes a $1 billion problem the governor has to fix. Pawlenty has zeroed in on health care, and we'll have more on that tomorrow.

Patrick Condon of the Associated Press took a look at some possible long term budget fixes in this story over the weekend:

As another round of cuts loom, it's tantalizing to consider the more stable funding that tax reform could bring. The state's reliance on the personal income tax and the sales tax on discretionary purchases makes it more vulnerable to economic booms and busts, experts say.

Recently, Sen. Dean Johnson, DFL-Willmar, said he re-read a 1986 tax study
led by then-St. Paul Mayor George Latimer. It aimed to make the
state's cash sources more predictable. Among its recommendations
was to tax clothing purchases, but the idea was rapidly abandoned.

"I'm not necessarily speaking as a proponent, but it would stabilize your tax revenues moreso than a reliance on income taxes," Johnson said.

Latimer, now a professor at Macalester College, said he thinks the public view of the issue might be shifting as they see what recent budget deficits have wrought in spending on education, health care and other state services.

"Even back then and as a Democrat, I never thought taxing clothing was nearly as unthinkable as tradition had it," Latimer said. A corresponding income tax credit could offset the hit on lower wage earners, he said.

Majority Republicans in the House get skeptical when Democrats talk about tax reform.

"A lot of people have different definitions of tax reform," said Rep. Jim Knoblach, R-St. Cloud, the chairman of the House Ways and Means Committee. "For some people I think it means tax increases, and we're not going down that road."

Condon concludes that no long term fix is likely this year. Even with no word quite yet on the budget, the Senate is sprinting to pass a bonding bill. MPR's Laura McCallum has this item:

The Senate is expected to vote Monday on a capital investment bill totaling more than a $1 billion.

The so-called bonding bill would authorize the state to borrow money for about $975 million worth of higher education, transportation, environmental and other public works projects. The rest would come from higher education institutions.

The bill's sponsor, Sen. Keith Langseth, DFL- Glyndon, said the Senate should pass the bill quickly to create jobs.

"We've still got unemployment in the construction fields, and getting people to work, and keeping them working all the summer and through the winter is very important," he said.

Lawmakers failed to agree on a bonding bill last session. Senate Republican Leader Dick Day said he thinks the bill is too large, but says many of his caucus members will vote for it.

He said the public is telling lawmakers to compromise and get their work done. Republican House Speaker Steve Sviggum said the House bill will be ready by mid-February, and will be smaller than the Senate proposal.

The Star Tribune takes a look at campaign financing, specifically those 527 groups:

More than three dozen 527 groups spent at least $4.2 million in Minnesota before the 2004 election -- twice as much as they spent in the 2002 cycle -- according to a summary prepared for the Star Tribune by the Center for Public Integrity. And that total probably is an undercount. The biggest national 527 of all, America Coming Together, spent an estimated $4 million in Minnesota, but it did so indirectly through its national political action committee.

Controversy over the explosive growth of 527s was one of the major sideshows of the last election. It became especially sharp in Minnesota in December, when the national 21st Century Democrats was penalized more than $300,000 for failing to disclose its donors to the Minnesota Campaign Finance and Public Disclosure Board. It is believed to be one of the largest penalties assessed by any state so far against national 527s.

Rivers of money from 527 groups flowed virtually unchecked into all states, and the phenomenon is provoking a call for more inquiry and perhaps more legislation to regulate their activities. Everybody involved seems to agree that the laws pertaining to 527s are complex, even bewildering.

The bottom line of the story is that government reform types are worried and that the groups themselves think the 527s are getting more people involved in grass roots politics. Most seem to agree that the rules need to be clearer and better enforced.

Finally the AP is reporting that funeral services are pending for the wife
of Minnesota Senate Majority Leader Dean Johnson. Avonelle Johnson had battled cancer for five years and was 60 years old. She died early Monday at a Willmar nursing home with her husband at her side.

Posted by Mike Mulcahy at 7:21 AM

January 21, 2005
GOP competition

The GOP must really think DFL Sen. Mark Dayton is vulnerable. Dayton is up for re-election next year. Up until now 6th District Rep. Mark Kennedy was widely thought to be interested in running for Senate. Now 1st District Rep. Gil Gutknecht says he's interested too. The AP's Frederic J. Frommer had the story from Washington:

Gutknecht, a 10-year House veteran, has staked out an independent position on some issues, particularly on allowing Americans to import drugs from Canada.

"I recognize I have to make a decision, for sure one way or
another, fairly soon," Gutknecht said in an interview at an
inaugural reception sponsored by the Minnesota State Society.

"The problem is you're going to have to raise a mountain of
money. You've got to get started fairly early." Gutknecht said he
hopes to make a decision in the next couple of months.

Gutknecht, who represents Rochester, said he didn't envision a
primary battle with Kennedy. Instead, switching on a "Godfather"
voice, Gutknecht said he hoped it would be settled "by a meeting
of all the families" - state party leaders and Minnesota
Republicans in Congress.

"If you're going to beat an incumbent, I don't think you can
afford the luxury of a split party," Gutknecht said, shifting back
to his normal voice. "There's something to be said for having a
consensus candidate. I'm a believer that as soon as we can, we
should coalesce around one candidate."

Frommer notes that Dayton spent $12 million of his own money in the 2000 election, but has said he can't afford to finance his own campaign this year. And yet Dayton finished 2004 with just $177,000 in the bank, more in the molehill than mountain category of campaign fundraising. And of course, If either Gutknecht or Kennedy runs against Dayton it will open a race for the seats in their districts. This is going to be interesting.

At the Capitol, Gov. Tim Pawlenty is scheduled to release his budget plan on Tuesday. The Legislature is in a bit of a holding pattern until then, but things are definitely moving. The Senate could vote on its version of a bonding bill as early as next week.

Supporters of a bill to crack down on people who ride all terrain vehicles where they don't belong announced their plan Thursday. MPR's Lorna Benson did a story on this a couple weeks ago.

AARP Minnesota did a poll and found overwhelming support for a $1 per pack cigarette tax increase. The group's president is former state Attorney general Skip Humphrey, who successfully led the effort to sue tobacco companies a few years back. The poll had some other interesting findings. Scott Wente had this story in the Fargo Forum:

- 85 percent oppose cuts to health care programs for the elderly and disabled as the Legislature looks to erase a $700 million budget deficit.

- 81 percent support increased taxes on beer and wine. Alcohol is currently taxed at 9 percent.

- About 50 percent support an expansion of casino-style gambling as a source of state revenue.

More than 1,000 registered voters took part in the recent phone survey. Roughly 200 said they are AARP members.

The group's leaders said members will advocate hardest for a boosted tobacco tax.

"This is significant support and AARP believes that the Legislature and governor should strongly consider increasing the tax on cigarettes," Humphrey said.

So smoke 'em if you got 'em, I guess.

After making a big deal out of Gov. Pawlenty's interest in a casino at the Mall of America, the Star Tribune shifts attenion to the as yet unbuilt harness racing track approved this week in Anoka County. Darlene Prois and Patricia Lopez had this in the Star Tribune:

House Speaker Steve Sviggum, R-Kenyon, said the track will be well-positioned to add casino-style gambling, becoming a racino.

Canterbury Park in Shakopee has been pushing for years to turn its racetrack and card club into a racino by the highly lucrative addition of slot machines.

Operators have said that could bring the state $100 million upfront and up to $100 million a year.

Sviggum said that if Canterbury gets a racino, Anoka should as well. "I see no reason why that couldn't bring in $200 million to $300 million a year for the state," he said.

He urged the track owners to consider a partnership with the Red Lake, Leech Lake and White Earth Indian bands and said that would be a better option than having the Indians pursue a casino at the Mall of America.

Does that qualify as putting the casino before the cart before the horse?

Posted by Mike Mulcahy at 7:02 AM

January 20, 2005
Poverty tour

It's inauguration day in Washington and that's where most of the political news is focused. But there's still enough going on at the Capitol for a quick rundown. Having said that, let's start outside the Capitol. Two of the state's top religious leaders did some long distance lobbying to try to convince lawmakers to be careful when cutting programs for poor people. MPR's Toni Randolph had the story:

Much of the recent talk about human services has been about cost. But Wednesday, Catholic Archbishop Harry Flynn and Lutheran Bishop Peter Rogness said the talk is starting in the wrong place. They want lawmakers to see the human side of human services, rather than just the money. Rogness says it's simple.

"You don't start with the question of money, you start with the moral judgment about what kind of people we're going to be together."

In order to make their point, Rogness and Flynn tried to put a human face on poverty in Minnesota by touring several human services programs based in the Church of St. Matthew on St. Paul's west side. They visited a non-profit developer of affordable housing, a health clinic and food kitchen, as well as the only licensed day care center of the West Side of St. Paul.

If the message isn't clear enough, how about this quote from Harry Flynn reported by the Associated Press's Elizabeth Dunbar:

"The state's budget is more than just a document. It is a moral statement," Flynn said. "If we must pay higher taxes in order to meet needs of our communities, then so be it."

No lawmakers or representatives from Gov. Pawlenty's office went along on the tour. The two bishops want people to write to lawmakers to tell them to bring compassion to the state's budget process. It will be interesting to see what kind of impact that could have on the process.

Meanwhile at the Capitol, the bonding bill is off to a fast start in the Senate. MPR's Laura McCallum had this item:

The bill would authorize the state to borrow money for about $975 million worth of building projects across the state. The rest would come from higher education institutions, where about a third of the projects would be built.

The bill would also pay for environmental and transportation projects, including the proposed Northstar Commuter Rail line between Minneapolis and Big Lake.

DFL Senate Majority Leader Dean Johnson of Willmar says Senate Democrats want to pass the bill as early as Monday.

"It's about putting 10 to 12,000 men and women back to work, and many of the plans and designs are in place, and we're ready to go. And I can see no reason why we ought to wait."

Last session, a slightly smaller bonding bill failed to pass the Senate, with most Republicans voting against it. Republican Senate Minority Leader Dick Day says he thinks two-thirds of his caucus will vote for the bill this time.

He says he still thinks the bill is too big, but says the public wants lawmakers to compromise and get their work done.

It's amazing the impact an election can have. Tarred with the "do nothing" label last year, legislators are racing to get things done this year.

And Gov. Pawlenty, who will attend the inauguration is teaming up with other governors to try to keep the flow of Canadian prescription drugs coming. MPR's Michael Khoo has this item:

Gov. Tim Pawlenty is asking Canadian Prime Minister Paul Martin to meet and discuss the importation of prescription medicines into the U.S.

Canadian officials say they're studying plans to restrict the cross-border flow of prescription medications. But Pawlenty says any barriers to Canadian medicines could cut off an important source of low-priced drugs to Americans struggling with health care costs.

Pawlenty has set up a state-managed website that connects Minnesotans with approved Canadian pharmacies. Canadian officials, however, say there's unease about allowing Canadian physicians to authorize prescriptions for patients they've never even met.

Pawlenty and five other governors are asking to meet Prime Minister Martin in Ottawa to discuss their concerns. Pawlenty and another group of governors is also asking Congressional leaders to legalize drug importation.

Finally, it's been a tough year for Senate Majority Leader Dean Johnson. The Star Tribune had this brief item:

The wife of Senate Majority Leader Dean Johnson, who has suffered from cancer for five years, is near death at a Willmar nursing home, Johnson announced Wednesday.

Avonelle Johnson, 60, is resting comfortably surrounded by relatives and friends, her husband said at a State Capitol news conference. "My wife is coming to the end of her life," he said. "The doctors say that everything that can be done for her has been done."

Dean Johnson, DFL-Willmar, has been absent recently from several Senate events, including Gov. Tim Pawlenty's State of the State address on Tuesday, while tending to his wife. His father, Erlyn, died Dec. 31 at the age of 92.

"As my father said, life can be unkind, but we must move forward," said Johnson, a 26-year veteran of the Legislature and a Lutheran pastor.

Posted by Mike Mulcahy at 7:05 AM

January 19, 2005
State of the State

Facing a voter revolt in a typically strong GOP area, Gov. Tim Pawlenty came to Rochester Tuesday and did what governors do. He proposed new spending (but not much). Despite the state's $700 million projected budget shortfall (now up to $1 billion counting the governor's proposed new spending on K-12 education), Pawlenty proposed spending $3 million to begin planning for a four year university in Rochester. That's something the city has wanted for decades.

In the Pioneer Press, Bill Salisbury pointed out what's new:

Pawlenty made pitches for a series of initiatives that he had unveiled in recent weeks, including creating a performance-based pay for teachers and using a public-private purchasing alliance to obtain health care at better prices. He also announced these four new priorities:

Establish a "turbocharged truth-in-taxation" plan that would enable citizens to repeal property tax increases by cities, counties, townships and school districts.

Send more state higher education dollars directly to students, instead of colleges and universities.

Create a four-year university in Rochester a 40-year-old idea that he dusted off and breathed new life into.

Invest $15 million in state funds, matched by millions more in private donations, for bioscience research at a new Mayo Clinic-University of Minnesota genomics lab here.

Pawlenty's truth-in-taxation idea isn't new. It's been bouncing around the Legislature for at least eight years. But this is the first time Pawlenty has given it this much emphasis.

The Republican governor embraced another idea that's been around for years when he called for shifting more state funding directly to college students, instead of institutions. But it was the first time he endorsed it, his staff said.

By directing more money to financial aid instead of appropriations to the schools, Pawlenty said schools would be more responsive and accountable to the needs of students.

And the Democrats? Well, as you might expect, they were not impressed. MPR's Laura McCallum had some reaction:

DFL leaders worry that his budget will slash state health-care programs. Assistant Senate Majority Leader Ann Rest, a DFLer from New Hope, says Pawlenty's budget priorities leave many unanswered questions.

"He talks about new money for education, but he doesn't say where it's coming from. He talks about no new taxes but he didn't say no new property taxes, which is what we had to deal with in the previous budget," Rest said.

Rest also questions the cost of another proposal the governor outlined -- a so-called "Turbocharged Truth in Taxation". Pawlenty says when taxpayers receive their annual Truth in Taxation forms, they should also receive postcards they could mail to local governments to oppose the level of taxation.

Republicans lost two Rochester House seats to the DFL in November, and came close to losing a third. Pawlenty made clear in his speech that he will push again for a $27 million genomics center in his bonding bill this year. MPR's Michael Khoo had a look at the political element of the governor's address:

The Legislature failed to pass a so-called bonding bill for funding public works projects last year when partisan gridlock brought the session to a standstill. Many observers blame the lack of progress for a string of Republican defeats in the fall House elections -- and a corresponding rise in the strength of the DFL minority. Those election results included two upsets in the Rochester area. DFLer Andy Welti of Plainview is one of the beneficiaries of that trend. He says the governor's attention to southeastern Minnesota shows he heard a clear message in the 2004 election.

"I think definitely he did want to highlight those key points, those key elements that are crucial to greater Minnesota and southeast Minnesota. But also there could possibly be some political implications, maybe trying to build his base of support here for the next election."

Welti called the governor's visit and his initiatives "positive." He says the Rochester projects do more than just burnish the governor's reputation. Welti says the university plan and the genomics facility are important economic development tools for the entire region, if not the entire state.

And Welti's Republican predecessor, Bill Kuisle, says the governor's emphasis on greater Minnesota is not a post-election conversion. He notes that Mayo Clinic site that hosted Pawlenty's speech was born, in part, due to tax incentives included in Pawlenty's Job Opportunity Building Zones, which were enacted in the governor's first year in office. Kuisle says despite voter disapproval at last year's gridlock, he rejects criticism that Republican leadership has been ineffective.

"You know, the do-nothing Legislature. There was a lot of great things that came out of it in the last two years, and this is one of them. Seven hundred new jobs. You know, how can you beat that?"

The governor didn't make an announcement about tribal gambling in the State of the State, but he says one is coming soon. In the Star Tribune, Pat Doyle and Mark Brunswick say it could involve Bloomington:

In a sign of intensified interest in a metro casino, Gov. Tim Pawlenty and representatives of the Mall of America have held separate meetings recently with Bloomington officials to talk about a possible casino at the giant shopping center.

On the same day that Pawlenty hinted in his State of the State address about new gambling initiatives, it was disclosed that he met in December with the Bloomington mayor and city manager to talk about a casino and other issues. The meeting, confirmed Tuesday by Pawlenty press secretary Brian McClung, was described in minutes of a Jan. 3 City Council meeting. Mayor Gene Winstead reported that Pawlenty "indicated his desire to introduce a generic bill regarding gaming and a casino in the metro area."

The venture could involve a deal with northern Minnesota Indian tribes that have been looking for a better location for a casino, as well as with wealthier southern Minnesota tribes, and "a site of interest for such a casino is the Mall of America Phase II," according to the minutes.

The story goes on to note that Bloomington legislators oppose a casino in the city and it quotes a Pawlenty spokesman saying no decision has been made.

Pawlenty will lay out his plan to balance the budget next week. As for any gambling deal, he says it would pay for "extras," not the ongoing work of state government.

Posted by Mike Mulcahy at 7:00 AM

January 14, 2005
Stopping the bleeding

After hinting for several weeks Gov. Tim Pawlenty is proposing more money for Minnesota schools. One thing he's not saying yet though is where the money will come from. Pawlenty wants to spend an additional $292 million on schools over the next two years plus another $60 million in incentives to districts that agree to pay teachers based on performance rather than years of service.

MPR's Tim Pugmire has the governor's plan and some reaction:

Using the media center at Vadnais Heights Elementary as a backdrop, Gov. Pawlenty stressed that education funding is a top priority in his budget proposal. His spending plan would increase the state's basic funding formula by 2 percent each of the next two years. That translates to an additional $202 per student over the biennium. State budget problems kept the formula amount frozen for three years.

Pawlenty says schools need the funding increase.

"As school costs go up and pressures on costs go up, more funding being available to schools is an important part of maintaining, supporting and hopefully enhancing our schools," said Pawlenty.

The centerpiece of Pawlenty's education plan is an incentive program to reform teacher salary structures. The Republican governor wants to end the traditional practice of paying teachers based on years of service and college credits. Instead, he wants teacher salaries linked to their performance in the classroom. Pawlenty's budget will include $60 million in incentives to help interested school districts make the switch.

"I think we can do a better job -- as a state and as a nation -- treating teachers as professionals rather than assembly line workers from the 1940s," said Pawlenty. "There are a number of enhancements that I think we can make to the way that we treat, and consider, and evaluate and pay teachers, that will be more modern and be more productive, particularly as it relates to student achievement and student learning."

Another part of the governor's plan would give school districts more authority to raise property taxes without first getting voter approval. Some school officials have been asking for that authority for some time, but not everyone is happy with the governor's plan. This is from Norman Draper's story in the Star Tribune:

At least one DFLer, Rep. Mindy Greiling of Roseville, saw the plan as being partly paid for by increased taxes -- in the form of local property taxes that school boards might raise without letting the voters decide.

"My main impression here is that he's not keeping his no-new-taxes pledge," said Greiling, a member of both the House education finance and policy committees.

Plus, Greiling said, Pawlenty's general fund increases don't cover DFLers' calculations of the annual inflation rate at 2.5 percent. Other DFLers said they appreciate the governor's recognition that schools need more money, but that it isn't enough.

"The dollars the governor proposes in his budget are insufficient," Sen. LeRoy Stumpf, DFL-Plummer, chairman of the Senate Education Finance Division, said in a statement. "While we appreciate the governor's recognition that schools are not adequately funded, his proposal doesn't even come close to covering the funding freeze the governor imposed on schools the past two years."

Some school district officials agree the spending increase is a little light. Tammy J. Oseid had this quick survey of opinion in the Pioneer Press:

At Vadnais Heights Elementary, where the governor outlined his plan, parents questioned how much another $292 million or about $122 per student in the first year would accomplish statewide.

"Two percent isn't really going to bring anything back," said Diane Edson, one of a group of Vadnais Heights parents who raised $34,000 in 2004 to hire another teacher so each fourth-grade class would have 23 students, rather than 31.

School district leaders reacted similarly.

"We're happy that the governor is attempting to provide additional resources," said Pat Harvey, superintendent of the St. Paul public schools. "Unfortunately for us, the increased funding is only a dent in the $24 million deficit that we have."

"It's not going to replace what was lost over the last three years, but it's enough to stop the bleeding," said White Bear Lake superintendent Ted Blaesing, who this summer assumes presidency of the Minnesota Association of School Administrators.

As I noted above, one big question the governor hasn't answered is where he finds the money to increase funding for schools. If you add the $352 million in new spending in this proposal to the projected $700 million shortfall you come up with a $1 billion plus problem. Clearly state funded health care programs are in Pawlenty's sights. But we'll probably have to wait until next week to get the final word on what he's planning.

Speaking of health care, we cited MPR's Laura McCallum's story yesterday about Senate DFLers pushing for money in the state healthcare access fund to be used for MinnesotaCare rather than general budget balancing. Here's the latest from Laura:

A Minnesota Senate committee has approved a bill that would repeal a $5,000 cap on outpatient benefits for some Minnesotans enrolled in MinnesotaCare.

During the budget cuts of two years ago, lawmakers enacted the cap for adults without dependent children in the state's subsidized health insurance program. The bill's sponsor, Sen. Linda Berglin, DFL-Minneapolis, says since the cap went into effect, about 300 childless adults on MinnesotaCare have died. It's unclear whether their deaths were related to lack of medical care because of the cap.

Sheila Hart of Hibbing is a cancer survivor enrolled in MinnesotaCare. She said she and about 6,000 other Minnesotans could reach the cap this year.

"We do not deserve this death sentence. We have not committed any crime, unless being poor is a crime itself," she said.

Hart said it's immoral to use money in the fund that pays for MinnesotaCare for purposes other than MinnesotaCare. That health care access fund is projected to have a surplus in the next two-year budget cycle. The Senate Health and Family Security Committee approved a bill repealing the cap by a vote of 9-0.

It'll be pretty quiet at the Capitol Friday. I have a day off Monday and will be in Rochester for the governor's State of the State speech Tuesday. Listen for our live coverage on Midday, and I'll write again on Wednesday.

Posted by Mike Mulcahy at 7:09 AM

January 13, 2005
Health care debate begins

If you haven't read the Capitol Letter before--welcome. It's designed to be a quick overview of some of the big news out of the Capitol. When possible I'll also provide links to longer stories so you can check them out at your leisure. So let's get to it...

Gov. Pawlenty isn't scheduled to release his budget until next week, but already a prominent DFLer in the Senate is pushing back. Sen. Linda Berglin, DFL-Minneapolis, is staking a claim for a $226 million surplus in the fund that pays for MinnesotaCare--the state subsidized health insurance program for the working poor. MPR's Laura McCallum had the story:

Minnesota faces a projected $700 million deficit in the next two-year budget cycle. At the same time, the fund that pays for MinnesotaCare is projected to have a $226 million surplus. Money in that health care access fund comes from a tax on doctors, hospitals and clinics. Berglin wants to use some of that surplus to pay for her bill, which will cost an estimated $69 million.

"That is what the money is meant for; it's meant to serve the people in the program. We don't need to be rationing services like this, we have the money and we should make sure that we provide the services," Berglin says.

Republican leaders want to use the surplus in the health care access fund to help balance the overall state budget. The fastest growing area of the state budget is health care. State Human Services Commissioner Kevin Goodno says if the surplus goes back into the state's general fund, it would pay for other health care programs.

"The money isn't being taken out of the health care access fund to solve road problems; it's being taken out of the health care access fund to solve health care cost problems. And so it is being spent on health care," he says.

That's not even the biggest debate coming in the health care budget. That's likely to be over the general assistance medical care, a program that provides health care to single adults with no dependents. Stay tuned for that.

As temperatures head into the double digits below zero, Attorney General Mike Hatch is continuing his feud with Centerpoint Energy. MPR's Michael Khoo had this item:

Hatch says Minneapolis-based CenterPoint Energy/Minnegasco has refused to reconnect delinquent customers despite state laws that protect families during during winter.

Hatch said customers who have offered to work out a payment schedule with the company have been inappropriately refused -- and that CenterPoint has not alerted customers to their rights under state law.

"The actions of Minnegasco in refusing to tell these people about their right of appeal, about their right to negotiate and instead try to extract a set amont of money or extract all of the money at the first call is inhumane," he said.

A CenterPoint/Minnegasco spokesman said the company includes flyers in its bills that detail customers' rights. CenterPoint spokesman Tracy Bridge said the company has done all it can to alert customers to their rights.

"Each September we send a bill insert to all of our customers providing them clearly with what their cold-weather-rule rights are. That includes customers who have been disconnected. So, the assertion that we are not providing customers with what their rights are under the cold weather rule is incorrect."

The Public Utilities Commission is scheduled to talk about the issue Thursday. In the newspapers, the Texas Hold'em bill is getting some attention. Mark Brunswick had this in the Star Tribune:

Sen. Dave Kleis, a Republican, said state law needs to be clarified to make sure that tournaments of Texas Hold'em are regarded the same as games such as cribbage, bridge, euchre and 500.

Kleis' proposal comes in the wake of a raid last summer at a St. Cloud bowling alley that had been sponsoring Texas Hold'em tournaments for about six months. The owner of Granite Bowl had been assured by several lawyers that the tournaments were legal as long as there were no financial benefits to the sponsor and the prizes did not exceed $200.

Nevertheless, the state's Department of Public Safety and local police conducted a raid on the bowling alley during a tournament, shutting it down, confiscating cards and chips and detaining the players for more than two hours.

"It's a waste of our state's resources when we actually go after an establishment for having a tournament where no betting was going on," Kleis said at a Capitol news conference. "It's not government's role to outlaw everything."

Yeehaw! How dare they call it a do-nothing Legislature. Stay warm, good luck, and I'll talk to you tomorrow.

Posted by Mike Mulcahy at 7:07 AM

January 12, 2005
Place Your Bets

Who will come out a winner in a high stakes reshuffling of Minnesota's gambling industry? The northern tribes are a safe bet. The northern tribes--White Earth, Red Lake and Leech Lake, could use some luck. Far away from the Twin Cities, they represent some of the lowest income people in the state. They have not benefited from the lucrative casino operations closer to the metro area. Gov. Tim Pawlenty's visit to White Earth last week to talk with leader there about gambling seems to have set off a chain reaction, starting with the Mille Lacs Band of Ojibwe. MPR's Annie Baxter has that part of the story:

The Mille Lacs Band of Ojibwe is holding firm on its stand not to share casino revenues with the state. Mille Lacs' tribal chair Melanie Benjamin gave her State of the Band address on Tuesday, praising the band for protecting its "economic livelihood" from Gov. Pawlenty and the Legislature. But Benjamin made another announcement that still keeps the band involved in the casino profit-sharing debate.

In August, she wrote the governor a letter, offering a few proposals for how the band could make economic contributions to the state. Since then, her relations with the governor have soured. But Benjamin still wants to pursue some of the ideas she had floated with him, including the idea of a charitable foundation. In her 'State of the Band' address, Benjamin elaborated the concept.

"I have sent a proposal to the Band Assembly that outlines a plan to partner with other metro-area tribes to create a foundation. The purpose of the foundation would be to provide grants to those Lakota and Ojibwe tribes in rural Minnesota whose people are not doing as well as some of us," she said.

Benjamin's plan is counter to a proposal that's been kicking around the Capitol for a few years Pawlenty may be getting ready to sign on to. It would allow for the construction of a new casino in the north metro suburbs. The state lottery would operate the casino and the state and the northern tribes would split the profits. The political advantage to the plan is that some urban DFLers in the Senate support it.

That may be one reason why the northern tribes don't like the last minute suggestion by Melanie Benjamin. Here's another quote from Baxter's story:

So the Mille Lacs Band's announcement raises a question: Is the band offering financial assistance to the northern tribes in order to thwart their deal with the state?

"Absolutely. It isn't even a suspicion. I'd say it is the reason," says Erma Vizenor, chief of the White Earth Band of Ojibwe, one of the tribes that met with Gov. Pawlenty. Vizenor says she's not enthused about the Mille Lacs Band's plan to lend a hand.

"We want to earn our own revenue. We don't to take what we regard as charity from other tribes," she said.

And while the tribes are having political issues, how about things back at the Capitol? The gambling issue there is creating allies...against gambling. This is from MPR's Michael Khoo:

A coalition of anti-gambling groups has re-emerged in response to Gov. Pawlenty's recent overtures to the tribes.

Citizens Against Gambling Expansion -- CAGE -- includes religious leaders and conservative think-tanks who oppose increasing the availability of casino gambling.

It's not often that the Joint Religious Legislative Coalition joins forces with the Taxpayers League. But they've revived the CAGE alliance first created during earlier gambling debates. They're calling for a halt to any new casino proposals. Brian Rusche, the executive director of the religious coalition, says gambling creates more problems than it solves.

"It necessitates more losers than winners. It produces nothing of value. It creates no new wealth. So from a faith perspective, it's corrupt. It's empty. We should not go down this road," he said.

Rusche cited studies that show gambling increases the incidence of divorce, bankruptcy, child abuse, and violent crime.

Both Khoo and Patrick Sweeney in the Pioneer Press point out that the new group and its president Jack Meeks get some funding from tribes that own big casinos. Sweeney bears down on it:

Top House and Senate Republican leaders, who support putting a state-sponsored casino at the Canterbury Park racetrack, questioned the propriety of Meeks taking money from the tribes while trying to keep the state from getting a share of the profits from Minnesota's huge gambling industry.

"If he was a politician, I would say it's hypocritical," House Speaker Steve Sviggum, R-Kenyon, said of Meeks. "I would say it's just a little disingenuous."

Referring to Meeks and others associated with the anti-gambling group, Sviggum said, "They're being paid and supported to take a position. It would have a lot more credibility if Indian gaming money wasn't there to provide the result Indian gaming wants."

Senate Minority Leader Dick Day, R-Owatonna, a longtime supporter of putting a state-sponsored casino at the Canterbury Park racetrack, accused Meeks and the group of being "front men" for Indian casinos.

For a while it looked like the gambling issue was moving to the back burner. Now once again it looks like the hottest game in town. But there's one big question left to be answered. If the Legislature approves some new form of casino gambling (and that's still a big if) how would the state spend the revenue? Gov. Pawlenty has said he doesn't want to use the money to balance the budget. He says it should fund "extras" for the state. But he hasn't defined that, and the prospect of more money for things like schools, health care, and all the other good things the state does could be very tempting.

Posted by Mike Mulcahy at 6:56 AM

January 11, 2005
Moon over St. Paul

I'm really tempted to write about Randy Moss today. After all, that's what everyone's talking about, and it's always easiest to write about what people are talking about. But this is the Capitol Letter so I'll try to confine my remarks to what's going on at the Capitol. Of course, that could be my cue to write about the impact of Moss's antics on the chances for a stadium bill...but the Vikings were unlikely to get any public funding for a stadium this year anyway, so I can't even fall back on that crutch.

So what is happening at the Capitol? More budget news, both good and bad. First the positive note. Tax collections are up MPR's Laura McCallum had this item:

State finance officials say Minnesota collected $66 million more than forecast in the last two months of 2004.

State officials say corporate income tax collections accounted for more than two-thirds of the gain. Income and sales taxes - which comprise the bulk of state revenues - were up only slightly more than projected in November and December.

At the same time, motor vehicle taxes and mortgage tax receipts were less than projected. State officials caution that fourth quarter revenues don't always reflect changes in the underlying economy.

Gov. Pawlenty said in a statement that the news doesn't diminish the fact that state officials will have to make tough budget decisions in the coming months.

In the Star Tribune, Patricia Lopez puts in this note off Gov. Pawlenty's press release:

Pawlenty said he continues to be concerned about the "explosive growth of welfare health programs," which he puts at 27 percent in the coming two-year budget period.

Has anyone else noted that the governor has stared calling state health care programs "welfare?" Does anyone have an idea why he's doing it? It couldn't be because it's easier to propose cutting "welfare" (which nobody likes) than "health care" (which everybody likes), could it?

Now the budget bad news. Rachel E. Stassen-Berger had this story in the Pioneer Press:

State agencies ranging from the Board of Judicial Standards to the Department of Human Services need money and they need it quickly so they can get through the next few months.

The budget sprang about $25 million worth of holes, most of them after the Legislature failed to act on requests last year. Lawmakers plan to fill those holes with a speedy "deficiency bill."

"In some instances, agencies will face serious problems without quick action on this bill," Finance Commissioner Peggy Ingison wrote to lawmakers last week.

House and Senate leaders are already beginning to act.

A Senate panel Monday heard some of the major pieces of the bill, and the full bill will probably be before the Senate within a few weeks, said Sen. Dick Cohen, the Senate finance panel chairman.

The House Ways and Means Committee is to hear the bill today, and House Speaker Steve Sviggum, R-Kenyon, said he expects the House to pass the entire bill Thursday.

The most urgent request is $7.7 million for the state's public defenders, who need the money to continue operations. Without the money, the state would be unable to defend those who cannot afford representation.

Rachel's story goes on to say that money for the public defenders and a number of other areas will come at the expense of schools, thanks to an accounting shift lawmakers and the governor used to balance the budget two years ago.

Finally, given the aftermath of the tsunami, the war and upcoming election in Iraq and the weather disasters in California it's only natural that NBC would bring its nightly news program to...St. Paul? That's right, St. Paul. At least that's what Deborah Caulfield Rybak writes in the Star Tribune. And who will NBC's new anchorman Brian Williams profile while he's here? Well, read the story:

During his stop here, Williams will interview Garrison Keillor as part of a larger story on "A Prairie Home Companion."

Keillor is one of the people who put Minnesota "on the map," ["NBC Nightly News" Executive Director Steve] Capus said. "He is incredibly articulate and smart, and he mixes politics with a healthy sense of humor."

NBC. Always ready to go out on the edge. Sometime I'll tell you about the time I met John Chancellor in the MPR elevator. He was always my favorite newscaster. And that's the news from MY hometown.

Posted by Mike Mulcahy at 6:52 AM

January 10, 2005
More bipartisanship?

Is it bipartisanship or just the calm before the storm? The Minnesota Senate will confirm some of Gov. Pawlenty's appointments Monday. Senate leadership says it's a sign of cooperation and the willingness to get something done this year. But it's really just business as usual.

MPR's Laura McCallum has the details:

Senate Democrats extended an olive branch to Republicans by immediately taking up the confirmations of two Pawlenty commissioners and a Met Council member appointed since the last session.

On the first day of the session last week, Senate committees voted to recommend the confirmation of Public Safety Commissioner Michael Campion, Administration Commissioner Dana Badgerow, and Met Council appointee Mary Krinkie. The three are expected to be easily confirmed by the full Senate.

The tone is far different than last session, when Senate DFLers fired Pawlenty's education commissioner Cheri Pierson Yecke in the final hours of the session. Pawlenty then appointed former legislator Alice Seagren to head the education
department. Seagren's confirmation hearing is scheduled for this week.

As news this probably doesn't have 1/100th the value of the Vikings beating the Packers in the playoffs (maybe 1/1000th). But the question is how long the bipartisanship (such as it is) will last. Probably not very long, especially given the kind of rhetoric some of the DFL committee chairs in the Senate are using. For example, here's an item Laura had on Friday:

The chairman of the Senate Finance Committee says state officials and judges shouldn't receive better health care than low-income people in public health care programs.

Sen. Dick Cohen, DFL-St. Paul, says Gov. Pawlenty, state legislators and judges have good health benefits paid for by taxpayers. He told a group of nonprofit leaders that as the state faces a $700 million deficit, it could save some money by scaling back those benefits.

"Before we start cutting the health care of the single mother who's making beds and cleaning bathrooms at every hotel in the Twin Cities, maybe we should take a look at the governor's health care and my health care and the judges' health care and the commissioners' health care."

To get a sample of more of Cohen's ideas on this subject check out last Monday's Midday program from the Capitol.

MPR's Lorna Benson has an interesting look at a proposal for tougher penalties for people who break the law while riding ATVs:

Sean Wherley with Friends of the Boundary Waters Wilderness says the coalition decided to bring the ATV issue back to the Legislature after reviewing state statistics that showed a big increase in off-highway violations. During a recent 12-month period, conservation officers handed out more than 3,100 tickets.

"What's revealing about those figures is that 86 percent of them were committed by adults," says Wherley. "It counters the age-old argument that these are only irresponsible youth who are tearing up our hunting grounds and our fishing streams -- and it's time we rein in those lawbreakers."

Wherley thinks stiffer fines would help. His group proposes raising the fee on a first-offense from $100 to $200. Second and third violations would increase substantially, too. The group also wants to add ATV tickets to a driver's motor vehicle record, a move that would likely affect the driver's insurance rates.

But repeat offenders would feel the most pain in their pocketbooks. Under the proposal, flagrant violators would have their ATVs seized and sold.

Finally, the House will pay tribute to retired chief clerk Edward Burdick Monday.
Burdick served as clerk for 38 years, and it was his voice that you heard calling out bill titles and other information if you ever listened to the House. Congratulations to Mr. Burdick and good luck in his well deserved retirement.

Posted by Mike Mulcahy at 7:07 AM

January 7, 2005
Tough sentences, tough choices

Lawmakers have finally agreed on something. Both Democrats and Republicans say we need tougher penalties for criminals. Too bad the prisons are full. The problems are real, especially with methamphetamine.

Laura McCallum lays it out on MPR:

Law enforcement officers who see the growing impact of methamphetamine firsthand say meth is far more dangerous than any other drug they've encountered. Ramsey County Sheriff Bob Fletcher says meth is easier to make and more addictive than marijuana, cocaine and crack.

"The drug keeps changing. It evolves. The chemistry to produce these things keeps getting better on the criminal side, and it becomes more powerful and more addictive," he said.

Fletcher supports legislation proposed by Democrats that would restrict access to the products used in making meth. A main ingredient is ephedrine or pseudoephedrine, found in common over-the-counter cold medicine like Sudafed.

Republicans say they agree with many elements of the DFL plan. They introduced a similar bill last year, and Gov. Tim Pawlenty has already proposed a plan this year. All the plans would enhance penalties for people who manufacture meth, and for those who dispose of meth waste, which is particularly nasty. (For more background on the meth problem, check out MPR's excellent series)

Lawmakers are also likely to revisit the issue of sex offender sentencing. It was a big issue after the kidnapping and murder of Dru Sjodin, but nothing happened as the session imploded last year. MPR's Tom Scheck notes the tougher sentences come with a big pricetag:

While lawmakers negotiate over which penalty fits best for Minnesota, state corrections officials are trying to fit the current inmate population in its existing prisons.

Joan Fabian is commissioner of the Minnesota Department of Corrections.

"We need to figure out where to put these offenders," Fabian said.

Fabian says the state's prison population has increased 45 percent in the past five years. Fabian says her agency is using several strategies to address the trend: double bunking inmates in cells designed to hold one; keeping low level offenders in local jails; and housing inmates in a privately run prison in Appleton, Minnesota. Fabian and her boss, Gov. Pawlenty, say it's important now to add prison space. Fabian wants lawmakers to borrow $106 million to expand the Faribault and Stillwater prisons.

"With this Faribault expansion, we'll get about 1,060 beds and that will take care of the problem for a while," she said.

Sen. Jane Ranum, DFL-Minneapolis, says her caucus supports Pawlenty's expansion plans but she's concerned the state could still run out of space. Ranum says because a quarter of the state's inmates are in prison because of non-violent drug crimes it may be time to rethink sentences for those offenses. It costs about $77 a day to house an inmate in Minnesota. Ranum says an increased inmate population could add to the state's budget problems. Minnesota has a projected $700 million deficit. Ranum says drug treatment may be a better option for some inmates.

Scheck notes that House Republicans favor expanding rented space at a private prison in Appleton, at least in the short run. It could be that the state needs to do both rent more state and build new prison space. Ranum says the drug treatment option may be the hardest to pass, but the most cost efficient in the long run.

As lawmakers begin looking for solutions to the state's budget woes, they've found a way to help themselves. Patrick Condon of the Associated Press had this story:

A House committee voted Thursday to bump up the per diem, or daily expense check, for the chamber's 134 members. It was increased by $10, to a total of $66 a day.

It was approved on a voice vote in the House Rules Committee,
though several members voted against it. Some said it sent the
wrong message as the Legislature begins grappling with a projected
budget deficit of at least $700 million.

House Majority Leader Erik Paulsen, R-Eden Prairie and chairman
of the committee, defended the move.

"It's been a long time since it was raised," he said. "It
reflects the current times and the amount members incur on
expenses. It's a modest increase."

Hey, isn't that what Citizens for Tax Justice has been saying about the income tax?

Posted by Mike Mulcahy at 7:20 AM

January 6, 2005
Hatching a plan?

It's starting to look fairly certain that Attorney General Mike Hatch will challenge Gov. Tim Pawlenty next year. Hatch isn't confirming his plan to run for governor, but he's sent a letter to DFL activists looking for support and money for a campaign.

Brian Bakst of the Associated Press broke the story:

The letter, obtained Wednesday by The Associated Press, began arriving in mailboxes of the DFL faithful in late December. Hatch said in an interview he hasn't made up his mind about whether to challenge Pawlenty, who is widely expected to seek a second four-year term.

But Hatch's letter does more than his public comments to stoke
the possibility.

"This will be the most important letter I will write in the
2006 campaign," Hatch begins. "Your response to it will tell me
what course I should take."

In it, Hatch builds the case that schools are suffering, health
insurance is eluding more people and job losses are continuing.
Without naming Pawlenty, Hatch attacks the administration's actions
as contributing to economic hardship.

"We have leaders in Minnesota today who govern by slogan and
ignore the duty to make our children's lives better than ours, just
as our parents did for us," Hatch wrote. "Our state deserves
more, and we can do better."

Hatch tells Bakst he's just "taking the temperature" of the party rank and file, and that it's too early to make any announcements. But he also says the people he sent the letter are "pretty animated about" the prospect of him running.

While some other Dems will no doubt be interested in running, as the only DFL constitutional officer he clearly has the inside track. On Thursday Hatch is releasing a plan to combat methamphetamine. Pawlenty released one of his own a few weeks ago.

As for the governor, he told the Minnesota Chamber of Commerce Wednesday night he's ready to take some heat for cutting state health care programs. Laura McCallum of MPR had that story:

Gov. Tim Pawlenty says the budget he releases later this month will slow down the projected growth in health care spending to 20 percent. He said he'll be criticized for changing eligibility and trimming programs, but he says the state has to cut costs.

"In a few weeks I will be ripped apart for cutting spending, health and human service spending, as we propose to slow this down. It is true that some programs will be squeezed, some eligibilities will be proposed to be changed, but what we're going to do is slow down the increase from 27 percent to something closer to 20 percent. And I'm going to be called a Neanderthal," he said.

Oh, Mike Hatch will probably call him worse than that. Just give it a couple of months.

In the Star Tribune, Dane Smith raises the notion of a split in business support for Pawlenty:

Republican governors are accustomed to fighting off spending demands from teachers unions and social-service providers.

But Pawlenty finds his hands full this year dealing with an assortment of business pressure for more spending, which can lead to more taxing.

For almost two years, his unyielding resolve to not raise taxes has put him at odds with one of the chamber's top priorities: a commitment to "long-term funding" for transportation, and specifically, a 5-cents-per-gallon increase in the gas tax.

On other fronts, established associations such as the chamber have been joined by ad hoc business groups in calling for dramatic increases in investment -- a term used often by DFLers in lieu of "government spending" -- in transportation, early childhood care, and even environmental protection.

Having raised the notion of a split, Dane goes on to knock it down:

David Olson, the chamber's president, agrees that there is no widening rift. On a host of issues, ranging from the need for reduced regulation to opposition to general tax increases, they are united.

Here's an easy prediction. Business will back Pawlenty over Hatch no matter how much Hatch proposes raising the gas tax. When it comes to Pawlenty's pledge to protect businesses from tax increases versus Hatch's willingness to sue them, it's pretty clear where the interest groups will line up.

Finally, Cass Gilbert must have been the early 20th century version of Prince. The guy was everywhere, as demonstrated Wednesday when officials opened a time capsule originally placed in the University of Minnesota's anatomy building. This is from MPR's Toni Randolph:

The time capsule contained a letter that helped explain other items found in the box. Frank Cerra, the senior vice president for health sciences at the U, read it out loud.

"To the person who shall open this box deposited in the cornerstone of the institute of anatomy, Tuesday, September 5, 1911. Certain articles have been placed in this box for the purpose of preserving some local bits of university history for the use of future generations."

The letter goes on to talk about the cost of building the old facility -- about a half million dollars...and how the University secured money from the Legislature for construction -- over the course of 16 years, starting in 1895.

Some of the most precious items in the time capsule were drawings by St. Paul architect Cass Gilbert. One hundred years ago, he was well-known for designing the brand new state capital building. The drawings in the box were plans for the university campus. Much of the work never became reality, but Cerra says the drawings are very impressive.

"Those are absolutely priceless, and I think will be a wonderful part of the university and the Academic Health Center's archives."

A half million dollars for a whole building? Hard to believe it took 16 years to get THAT in the bonding bill!

Posted by Mike Mulcahy at 7:04 AM

January 5, 2005
First Day Breakdown

Well, so much for the bipartisanship. Just minutes after pledging a more productive, cooperative session members of the Minnesota House Tuesday got into a nasty partisan scrap.

MPR's Laura McCallum has the story:

Republican Steve Sviggum got just the votes he needed to be reelected Speaker over DFL leader Matt Entenza. The vote was 67-64, with one Republican and two Democrats abstaining from voting. Following the vote, Sviggum promised to involve DFLers in legislation.

"Understand that that outreach, understand that that ownership also brings a responsibility from your standpoint. It's no longer just throwing bombs. You're part of the process, you're part of the ownership," Sviggum said.

Minority Leader Entenza also pledged to compromise with Republicans. He then asked the Republican majority to give House Democrats more committee assignments and more staff to reflect their near-majority status. Both proposals failed. Entenza said the largely party-line votes signaled old-school politics.

"It's unfortunate that the tone the first day is that Republicans said we're going to create supermajorities for ourselves on committees, we're going to hog the staff," said Entenza.

In the Pioneer Press Pat Sweeney had some more quotes:

"The Republican majority is using its winner-take-all power to rule the House with an iron fist," charged Rep. Alice Hausman of St. Paul, a member of the Democratic-Farmer-Labor minority.

Steve Sviggum, a Republican from Kenyon, who was narrowly re-elected to his fourth two-year term as speaker of the House on Tuesday, angrily accused the Democrats of playing politics.

"I was really disappointed in the Democrats, extremely disappointed. They turned it into a partisan, political show," Sviggum said.

Partisanship and politics at the Capitol? Egad! What did they expect with a 68-66 split?

Despite the theatrics in the House, there are some signs of progress. In the Senate, committees were already working to confirm some of Gov. Pawlenty's agency heads, as noted by MPR's Michael Khoo:

Senate Democrats say the quick committee action is an indication that they want to move beyond the partisan gridlock that blocked most initiatives last year.

The Senate Crime Prevention and Public Safety Committee moved swiftly to recommend Michael Campion be confirmed as public safety commissioner. DFL Committee chair Leo Foley of Coon Rapids said he's known Campion for years.

"This gentleman has been a leader in providing the kind of service that the state of Minnesota needs. And I'm pleased to support his candidacy."

A separate Senate committee gave its approval to Dana Badgerow to lead the Administration Department and to Mary Krinkie to serve on the Metropolitan Council. The full Senate could give final approval early next week.

The problems at the Capitol last year inspired the Legislature's only Independence Party member, Sen. Sheila Kiscaden of Rochester to sponsor a workshop at the U of M's Humphrey Institute later this week. Called "Beyond Bickering and Gridlock" it's designed to teach lawmakers how to negotiate and how to disagree without being disagreeable. Kiscaden said on MPR's Midday program Tuesday that after the "do-nothing" 2004 session she realized the Legislature needed outside help. So far 70 legislators have signed up for the two-day event.

Posted by Mike Mulcahy at 6:45 AM

January 4, 2005
Hardest Job at the Capitol

The Speaker of the House is often called the second most powerful person in state government. Maybe not this year. When the DFL picked up 13 seats in November's election it left the margin in the House at 68 Republicans and 66 Democrats. Because there are 134 members of the House 68 votes are needed to pass a bill. That means if Speaker Steve Sviggum loses the support of just one Republican, he stands to lose the vote. Sviggum's new-found tentative position may play out in the first vote of the session--the vote to elect a speaker.

Patrick Sweeney has the story in the St. Paul Pioneer Press:

House Republican leaders were scrambling late Monday to try to ensure that the election today of House Speaker Steve Sviggum would not be derailed by threats from two members of the tiny Republican majority that they might abstain on the vote.

Rep. Bruce Anderson, R-Buffalo Township, said he probably would abstain rather than support Sviggum, R-Kenyon.

And Mark Olson, R-Big Lake, said he expected to vote for Sviggum, but that his backing was contingent on Sviggum and other Republicans agreeing to changes in House procedures.

"There are only 68 of us. Anyone can sink the boat we're in," said Republican Majority Leader Erik Paulsen, who was trying to persuade Anderson to support Sviggum.

Assuming Sviggum gets the votes to keep his job, things don't get much easier. If just one Republican chooses to peel away for any reason, it could bring down major parts of the budget.

This could be a recipe for yet another year of legislative gridlock. Or not. MPR's Laura McCallum reports this could be an opening to find new bipartisan cooperation:

In theory at least, that creates an opportunity for more involvement by Democrats in crafting legislation, especially on proposals that might alienate the most conservative Republicans. House Minority Leader Matt Entenza, DFL-St. Paul, says his 66 members don't want to be relegated to the sidelines.

"I think people are excited because the do-nothing Legislature has really been a problem for more than two years ... and now we finally have an ability to put some bipartisan coalitions together of moderate Republicans working together with Democrats."

House Speaker Steve Sviggum, R-Kenyon, agrees with Entenza that legislators in the middle of the political spectrum could pass major legislation.

"You may end up cutting off the very left and the very right, and those legislators, Democrat and Republican, that are more in the balance, may be supporting the bill as opposed to just Democrats or just Republicans. It make take different coalitions."

Sviggum may be one remembered as one of the most effective speakers in years in terms of taking control of the House and passing the Republican agenda. But this year he can't overwhelm the DFL with numbers, and that's a big challenge.

Speaking of bipartisan coalitions, it'll take one to pass a bonding bill. Unlike other legislation capital improvement bills require a supermajority--90 votes in the House, 41 in the Senate.

On the eve of the new session Gov. Tim Pawlenty proposed an $816 million dollar plan similar to the one he proposed last year. Among other things it includes money for higher education projects, for the Minnesota Zoo, for more prison beds, for reducing homelessness and for environmental conservation. It also supports the Northstar commuter rail line, connecting Minneapolis and its northwestern suburbs.

MPR's Michael Khoo notes the DFL response:

Lawmakers failed to agree on a bonding bill last year, which has cost many projects a year of construction time and created uncertainty around others. But Sen. Keith Langseth says DFL gains in last fall's elections have given them new leverage for passing a substantial bill and passing it early.

Matt Entenza of St. Paul leads the DFL House minority, which came within two seats of snatching the majority. He says the governor's plan is too slight and, in particular, underfunds higher education projects.

"Our goal is always going to be to move things forward. But Republicans have to learn there's got to be negotiations. And if there's a disappointment, it's not that the governor's proposing a bonding bill -- we're pleased that he is -- it's that it's essentially the same bill brought back with increases in construction costs, which is the price of delay," Entenza said.

You see, there is a new mood at the Capitol. They're not angry--just disappointed.

I'll be at the Capitol with Gary Eichten and Midday on Tuesday. Hope you can tune in on the radio or the Web. As always we'll be talking to the key players; the governor, committee chairs and legislative leaders.

Finally, sympathies to Sen. Dean Johnson, DFL-Willmar, on the loss of his father. Erlyn T. Johnson died Friday at a nursing home in Houston, Minn. He was 92.

Posted by Mike Mulcahy at 6:58 AM

January 3, 2005
Welcome to Session 2005

First things first. I'm not at the Capitol. Yes, this is the Capitol Letter, but I'm based in downtown St. Paul. I worked out of the Capitol for about 10 years and now direct MPR's political coverage. The purpose of this letter is to give you a quick update and fast take on the news out of the Capitol every day. Think of it as your daily political newscast on the Web. I'll link to the items I cite whenever possible so you can get more details on whatever I highlight. I hope you'll give me some feedback via e-mail so this soon becomes more than a one way street.

The session begins Tuesday. The big items on the agenda? The budget, health care, education, transportation. Other issues include stadiums, gambling, prison space and capitol improvements. In other words, the same things that have been on the agenda for the past four or five years.

MPR's Michael Khoo has this take on the budget, and why some of these issues seem so familiar.

As deficits go, it could be much worse. Projected to reach $700 million, the current problem is only a fraction of the multi-billion dollar deficit of two years ago. But it's also the fourth straight projected shortfall. In each of the past three years, lawmakers or the governor or both patched the budget and appeared to right the financial ship, only to see it list again by the next forecast.

Former Finance Commissioner John Gunyou says there's a simple explanation for the recurring headache. "Minnesota should not be facing yet another budget deficit. This has nothing to do with the economy. It has everything to do with the irresponsible financial decisions that have been made over the last three years," according to Gunyou.

Gunyou goes on to say it's time for a permanent fix. That means either raising taxes or cutting spending. Gov. Tim Pawlenty says he will stick by his pledge not to raise taxes. But he's also promised schools more money. Assuming the Legislature passes a bonding bill that will add some debt service to the budget, and House GOP leaders are promising an increase for nursing homes. As Khoo points out the new spending (not to mention inflation) would mean the size of the shortfall is actually significantly higher than $700 million.

But the governor is also hinting at big spending cuts in health care, particularly for a program that covers single adults. Pawlenty notes that health care spending is increasing much faster than the inflation rate.

In the Star Tribune, Patricia Lopez has some details:

That Minnesota offers care to childless adults may be a measure of its commitment to a basic quality of life for all. At its peak enrollment, in the middle 1990s, the program served 43,000 Minnesotans a year at a cost of $135 million. It now serves 37,340 Minnesotans at a cost of $241 million a year, which is borne by the state alone. Eliminating that program would net the state nearly $500 million for the 2006-07 budget cycle, but at the price, critics say, of having tens of thousands of Minnesotans either turn up in emergency rooms or simply do without care.

Pawlenty has not said he will eliminate the program. But he does point out that most other states do not insure low-income childless adults. Wisconsin, for instance, has no equivalent.

Lopez notes that Pawlenty is also likely to propose more cuts in the MinnesotaCare program.

The governor clearly thinks the state is too generous in health care benefits. Whether Democrats can find ways to cut costs without cutting benefits for large numbers of people remains to be seen. Like the governor they are not proposing tax increases, at least for now. But expect them to point out that just because the state doesn't pay the bills doesn't mean they don't get paid. People who don't have health insurance tend to show up at emergency rooms with serious problems, and one way or another we all end up paying for their care.

Posted by Mike Mulcahy at 6:34 AM