It's the seventh day of the state government shutdown.
Gov. Dayton has revised his tax plan with the hopes of ending the stalemate. Dayton said he's willing to let Republicans choose between a temporary income tax hike on millionaires or a $1 a pack increase on cigarettes. Republicans quickly rejected the plan.
Read Dayton's latest offer and watch video of Dayton and GOP leaders here.
Tidbit: There's a political element to the latest offer. Dayton is proposing two tax hikes that are extremely popular with the public with the hopes of making Republicans look extreme. Republicans are suggesting Dayton wants to rely on any tax because he's dead set on increasing spending.
Tidbit2: Dayton also forces a few GOP senior members to explain why they could vote for a cigarette tax in 2005 but not in 2011. Here's who voted to remove the cigarette fee from the Health and Human Services budget bill in 2005.
Tidbit: Gov. Dayton said GOP leaders told him they didn't have the votes to get any gambling bills through their respective bodies.
Several GOP lawmakers tell MinnPost that borrowing against future tobacco payments is not additional revenue.
Laid off employees rally again at the State Capitol.
City Pages has a list of House members who aren't taking a salary during the shutdown.
Tidbit: Dayton's spokeswoman says Lt. Gov. Yvonne Prettner Solon has elected to not take a salary during the government shutdown.
The Construction Trades are pushing for a bonding bill. They also say the shutdown is causing economic hard times for their members.
AP says the shutdown will cost the state millions.
Parents await a ruling on the child care assistance subsidy.
The shutdown is delaying the environment review of PolyMet.
Worker's comp claims are in limbo
Laid off fraud investigators want to keep working.
The Star Tribune says transit woes loom.
MPR says counties are trying to cope with the effects of the state shutdown.
Care for the elderly and disabled is strained.
The shutdown cancels Minnesota Historical Society concerts.
The shutdown has also halted the angel investment tax credit.
St. Paul's City Council unanimously rejects a sales tax for the Vikings stadium. The resolution is symbolic and has no impact on the stadium deal.
Tidbit: Dayton says he has not had an conversations on a Vikings stadium for weeks.
Sharing is good
The new leaders at Minnesota's higher education institutions are aiming for collaboration.
In debt talks, President Obama suggested cuts to Social Security.
Senate Democrats, including DFL Sen. Al Franken, insist they'll protect Medicare in the deficit reduction talks.
President Obama took part in a Twitter town hall.
Congress is being pressured to act in a No Child Left Behind overhaul. GOP Rep. John Kline is mentioned.
DFL Rep. Betty McCollum presents NASCAR and Afghanistan amendments.
McCollum also took the floor of the U.S. House to criticize Republicans in the MN Legislature.
Race for Congress
Democrat Rick Nolan, who served in the U.S. House thirty years ago, will challenge GOP Rep. Chip Cravaack.
Race for President
Iowa Democrats say they're confident of President Obama's reelection.
Vin Weber, Pawlenty's co-char for president, says GOP Rep. Michele Bachmann is going to be very difficult to beat in Iowa. Weber was also forced to apologize for telling The Hill that Bachmann has "sex appeal."
Pawlenty chided Weber over his comments.
Pawlenty is holding a Facebook town hall in Iowa today.
Salon's Steve Kornacki compares Pawlenty to Phil Gramm (and that's not a compliment).
Pawlenty also worked to highlight his differences with GOP Rep. Michele Bachmann. He told voters in Iowa to pick substance over style. Pawlenty said his comments weren't directed to anyone in particular.
Bachmann is getting foreign policy advice from Sen. John McCain.
Bachmann will also reportedly go on the air with TV ads in Iowa.
South Carolina Sen. Jim DeMint is disappointed Bachmann won't sign the "cut, cap, balance" pledge to slash spending and balance the budget.
Public funds dwindle for the 2012 campaign.
Mike Huckabee says he's still neutral in the race.
GOP Rep. Michele Bachmann has released her first presidential ad this morning. The ad is upbeat with Bachmann looking into the camera discussing her Iowa roots, her family background and her votes against Troubled Asset Relief Program and the federal stimulus bill.
"I will not vote to increase the debt ceiling," Bachmann says emphatically at the end of the ad.
The ad comes as Bachmann is ramping up her efforts to win the Iowa Straw Poll in August. The event, which is also a fundraiser for the Iowa GOP, is the first time GOP presidential hopefuls can show their grassroots strength in the nation's first caucus state.
The Washington Post took a look at Bachmann's faith and politics. Brit Hume with Fox News also suggested Bachmann could be "toxic" to independent and moderate voters and would be "a much easier target for attack ads."
Here's the ad.
It's Day 7 of the state government shutdown and there are no major events scheduled at the State Capitol today.
There are no budget meetings scheduled between Gov. Dayton and GOP legislative leaders (as of now). The two sides broke off talks yesterday after Dayton presented two new options to resolve their budget differences (a cigarette tax increase or a temporary income tax increase). Both were rejected by GOP leaders. Dayton said Republicans would have to present a different offer if they didn't like his proposal.
Dayton will attend a private ceremony for Sgt. Chad Frokjer, who was killed in Afghanistan on June 30.
Meanwhile, the chairs of the House and Senate Transportation Committees will appear before Kathleen Blatz, the Special Master assigned to hear pleas on why certain government services should continue during the shutdown. GOP Rep. Mike Beard and GOP Sen. Joe Gimse plan to request that a judge declare that the state's road construction projects are essential services and need to continue operating.
Several social services agencies, including Lutheran Social Services and Tubman, are also scheduled to appear at the hearing.
PolyMet mining will also request that their environmental review continue during the shutdown.
You can read the full agenda here.
GOP Senate Majority Leader Amy Koch and GOP House Speaker Kurt Zellers met briefly with Gov. Dayton during a morning meeting that focused on the K-12 budget bill. Rep. Pat Garofalo, R-Farmington, characterized the talks as constructive.
"It's safe to say that there's agreement on what there's disagreement on," Garofalo said. "That's a positive step because when you know what you disagree on you also know what you agree on."
Garofalo said he believes that the K-12 bill could be wrapped up quickly, since he says the two sides are close on the budget figures. But there are significant policy differences. For example, he said he's still pushing for K-12 vouchers and changes to integration aid.
"The integration funding program has spent over $1 billion and academic results have gotten worse, not better," Garofalo said. "There will be changes to that program. I can promise you that.
Sen. Koch also said their proposal to put an additional $80 million into the budget is linked to their policy changes. Gov. Dayton and other Democrats have rejected some of the policy proposals.
"We're miles apart on policy," Rep. Mindy Greiling, R-Roseville said. "We have a long way to go."
Koch says Dayton met briefly with leaders as they discussed the K-12 bill but she said they did not try to negotiate an overall budget agreement that would end the state government shutdown that began seven days ago.
Republicans have also renewed their call for Dayton to call a special session so the Legisalture can pass a bill that would partially fund state government.
"Forty-nine of 50 governors have solved budget issues," Koch said. "The governor is the CEO of the state. We need him to step up and lead."
When pressed, Koch was forced to acknowledge that state legisatures of all types have also finished their work. Koch also refused to say whether GOP leaders would present a budget offer to Dayton. Instead, she insisted that Republicans won't support a tax increase to close the budget gap.
"If the governor still has his tax increase proposal on the table then that hasn't changed that," Koch said.
The meeting comes one day after Dayton presented a budget offer to GOP legislative leaders. One option in his offer is a temporary income tax surcharge on people with an annual salary of $1 million or more. The other option would be to increase taxes on cigarettes by $1 a pack. Both of those plans also rely on a surcharge on hospitals and HMOs and further delaying payments to schools.
Dayton said Republicans would have to present a budget offer if they don't like his ideas.
A commission formed by former Vice President Walter Mondale and former Gov. Arne Carlson issued its recommendations today.
The plan calls for $2.2 billion in permanent spending cuts and $1.4 billion in tax increases. That includes a tobacco tax increase of $1.29 per pack of cigarettes, a Medicaid surcharge on hospitals, an alcohol tax increase and a temporary income tax increase on every Minnesotan.
The six-member commission says in the long term, the state sales tax should be broadened and the rate lowered. The plan calls for an overall two-year budget of $35.6 billion. Republican legislative leaders say the budget should be no more than 34 billion.
Mondale and Carlson created the commission with the hopes of finding a third way to break the budget impasse between Democratic Gov. Mark Dayton and GOP legislative leaders.
Here's the report:
Framework for a State Budget Solution
Here's the powerpoint:
Update: Here's a statement from Dayton:
"I thank Vice President Mondale and Governor Carlson for their important initiative to help resolve the state's current budget impasse. I also thank former legislative leaders Steve Dille and Wayne Simoneau and the other very distinguished members of their committee who worked so hard, so swiftly, and so well to develop their recommendations.
"I note that most of the Committee's recommendations parallel my own proposals. They recommend $2.2 billion in permanent spending cuts; I have detailed almost $2.1 billion in spending reductions. They recommend $700 million in increased revenues from increased alcohol and tobacco taxes and a human service surcharge; yesterday I proposed raising $700 million from a tobacco tax increase, other tax reforms, and health care surcharges.
"I respectfully differ with the Committee on their recommendation of a 4% temporary income tax surcharge on all Minnesota taxpayers. My goal has consistently been to protect most Minnesotans from either an income tax increase or a property tax increase, by raising state income taxes on only the wealthiest 2% of Minnesotans. Most other Minnesotans are already over-taxed, due primarily to the 75% increase in property taxes statewide during the previous eight years.
"Unfortunately, Republican Legislators remain adamantly opposed to making our state tax system fairer. That is why I reluctantly proposed an additional $700 million in delayed school aid payments, which further reduces state spending by that amount in the biennium.
"The Republicans in the State Legislature have received three compromise proposals in the past 24 hours: two from me and one from this very distinguished Committee. Now it is their responsibility either to accept one of them, or else to present their own alternative proposal. It will take both them and me to resolve this budget impasse. I have offered yet another compromise; now it is their turn to offer their compromise."
Update: Here's a statement from GOP House Speaker Kurt Zellers:
"The 3rd Way Budget Commission recommendation raises income taxes on every Minnesotan. It also taxes Joe Six Pack's six pack and makes those who smoke pay more. Like Governor Dayton's offer yesterday, this again shows that it's no longer about wanting a tax increase on the rich, it's about raising whatever taxes he can in order to spend more. Families across Minnesota are already struggling to make ends meet. This is not a solution. It is a retread of failed tax and spend policies. Republicans will not raise taxes to pay for unsustainable government growth."
Here's a statement from DFL House Minority Leader Paul Thissen:
I appreciate the work of the Mondale-Carlson Budget Commission, though like the Governor, I disagree with taxing all Minnesotans. Vice President Mondale, Governor Carlson, and the commission members have given tremendous service to our state both in this time of shutdown and throughout their careers.
Today's recommendations have merit, as have the seven budget compromises that Governor Dayton has proposed to the Republican legislative leaders. However, the fact remains that Republicans are utterly unwilling to listen to those who have served our great state, to reason, or even to the people of Minnesota in order to solve this budget impasse.
The Mondale-Carlson Commission outlined a framework of a $1.4 billion shift, $2.2 billion in budget cuts, and $1.4 billion in revenue. The fact is that the Republicans last week prior to shutdown agreed we need more than $1 billion in additional revenue to prevent the most damaging budget cuts from harming our state. They also agreed to take their divisive policy proposals off the bargaining table and focus on the task at hand - solving the budget deficit. All that remains is to agree on how we fix that billion dollar hole in the budget.
It is shameful that Republicans are continuing this devastating shutdown by continually refusing proposal after proposal. They have failed to lead at every step and shut down our state. Leaders listen, and it is time for Republicans to learn to listen and lead.
DFL Senate Minority Leader Tom Bakk issued this statement:
"I want to thank Vice President Mondale and former Governor Carlson, along with the rest of the Democratic and Republican members of the "third way" budget group, for their hard work in crafting their own framework for ending the state government shutdown and solving the biggest budget deficit in state history.(24 Comments)
The report from this bipartisan, independent commission makes one thing perfectly clear: we should not fix the biggest budget deficit in state history simply by slashing funding for schools, colleges, hospitals, nursing homes, and public safety. The Republican's all-cuts budget plan would slash funding for special education, take away health care coverage to 140,000 Minnesotans, make the biggest funding cuts to colleges and universities in state history, and devastate services for seniors and the disabled. This is an unacceptable outcome.
The bipartisan commission agrees that we need a balanced budget approach that combines responsible spending cuts and smart reforms with new, permanent revenue that allows us to protect our key priorities. This is also the position of Gov. Dayton, Democrats, many moderate Republicans, the vast majority of Minnesotans, and even the state's economist.
The Governor has made it perfectly clear that he's willing to compromise, but will not capitulate to the extreme, all-cuts Republican budget proposal. It's time for Sen. Koch and Speaker Zellers to get serious about ending this impasse, and come forward with a real compromise offer."
Posted at 2:24 PM on July 7, 2011
by Brett Neely
Filed under: U.S. Senate
WASHINGTON - Ethanol's 45 cent per gallon tax credit could end by July 31 rather than the previously scheduled Dec. 31 expiration date, according to the terms of a deal announced today by DFL Sen. Amy Klobuchar, Sen. John Thune (R-SD) and Sen. Diane Feinstein (D-CA).
The credit, worth over $5 billion a year, has been in the cross-hairs of a bipartisan group of Senators from beyond the Midwest with varying reasons for opposing the industry subsidy. Last month, the Senate voted 73-27 on an amendment to end the tax credit although the underlying bill the amendment was attached to ultimately failed to receive a vote.
After that vote, Klobuchar and Thune began talks with Feinstein, who had co-sponsored the amendment, to find a compromise that would put the ethanol industry on a "glide path" away from the strong government support it has received in the past.
The Minnesota Department of Agriculture estimates that ethanol production contributes $3 billion a year to the state's economy.
Of the $2 billion worth of remaining funds for the blender credit, $1.3 billion will be dedicated to deficit reduction and $668 million will go towards tax credits for installing ethanol infrastructure at gas stations, encouraging the production of cellulosic ethanol that doesn't use corn as a feedstock and extending a tax credit for small producers.
"What this does is it allows us to use existing funds, existing money, not use any new money going forward," Klobuchar told MPR News in a brief interview this morning.
In addition to the tax credits, American-made ethanol also benefits from a federal mandate to mix the fuel with gasoline and a tariff on imported ethanol that's targeted at Brazil.
The deal comes at a time when Congress and the White House are engaged in high-stakes talks to raise the government debt ceiling and craft a long-term deficit reduction plan. Klobuchar hoped the agreement could serve as a template for phasing out other industry subsidies in the tax code.
"I think it's a great example of how an industry in the middle of the year came forward and said, OK, we know our subsidy is going away, let's do it in a smarter way and put some immediate money on the debt," Klobuchar said.
The agreement still needs the approval of the full House and Senate, and President Obama's signature, before it becomes law. Klobuchar said it could be attached to the deficit reduction agreement currently under negotiation.
Industry groups, faced with the complete elimination of the subsidy by the end of the year and an increasingly hostile Congress, welcomed the agreement.
"The final compromise reflects both the importance of the ethanol industry to achieve energy independence and the need for fiscal responsibility," said Bart Schott, President of the National Corn Growers Association.