- Associated Press - Monday, January 8, 2018

Post Bulletin, Jan. 3

Caution lights are flashing for Minnesota economy

A year ago in December, the state of Minnesota expected a budget surplus of $1.4 billion through 2018. By February, that number had grown to $1.65 billion.

Even before last year’s legislative session, however, lawmakers and Gov. Mark Dayton had plans to spend it down, and spend it down they did. Now we’re expected to be $188 million in the hole by the time the biennium ends, and when the Legislature convenes on Feb. 20, dealing with that shortfall will be a top priority.

If no action is taken, the deficit would nearly triple, to $586 million, by the 2020-21 biennium.

What happened to all the money? Well, to recap the 2016 session, Republican leaders pushed for a $650 billion tax cut, which Dayton called “excessive,” and spending went up on education, health insurance and myriad other programs. The individual health insurance market received about $880 million in “premium relief” and a “reinsurance program” that was intended to keep insurance companies in the market.

Add to that a slowing economy - yes, despite all the national boasts about the “Trump bump,” job and wage growth in Minnesota and other states has slowed slightly in recent months - and tax revenue lagging, and you get an unexpected and yet entirely predictable deficit.

When the deficit projection was announced in December, the reaction from St. Paul was strangely muted. The governor said he was disappointed and he pledged to work with Republican leaders to resolve the problem. House Speaker Kurt Daudt called the budget forecast “overly pessimistic,” while Senate Majority Leader Paul Gazelka pronounced himself “optimistic … I see in everything around this, signs of good things happening, and we’re going to see that in February.”

Maybe that’s one advantage of divided government in St. Paul: both parties were complicit in major decisions made last spring, and it’s tough to point fingers when both sides own the problem.

It has to be said, too, that the projected deficit is relatively tiny, on a $46 billion budget. In the private sector, the CEO of a $46 billion company that missed projections by that margin over a two-year period would get a bonus and stock options worth more than Minnesota’s deficit. Plus the state has $2 billion in reserves.

As Myron Frans, the head of the Minnesota Management and Budget office, said last month, “It’s not a ‘sky is falling’ kind of budget deficit, but it is concerning.”

Yes, it is, especially as we head into the brave new world created by the federal tax overhaul. No one on Earth knows exactly how the federal changes will affect state tax policy and revenue in all 50 states, though higher-tax states such as Minnesota will be hit harder than others. Look at what happened as the minutes ticked down on 2017, as millions of taxpayers rushed to pay their 2018 property taxes early, only to be told by the IRS at the last minute that it won’t help most of them.

2018 is likely to be a political year like no other. The U.S. economy is less predictable this year than most, and who knows how tax policy will shake out? As the governor and legislative leaders prepare for the session, now would be a good time to practice restraint, preach caution and keep expectations low for major spending and deep tax cuts.

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Minneapolis Star Tribune, Jan. 2

With Smith moving to U.S. Senate, Minnesota needs clarity

Minnesotans are witness this week to a highly unusual political shuffle, even for these precedent-shattering times. Tuesday brought the resignation of Democratic U.S. Sen. Al Franken in the face of a spate of allegations of inappropriate behavior with women. On Wednesday, Tina Smith, Minnesota’s DFL lieutenant governor for the past three years, was sworn in to take his place. Smith’s resignation as lieutenant governor was timed to go into effect at midnight Wednesday.

That means that as of 12:01 a.m., Minnesota’s lieutenant governor is Republican Michelle Fischbach - who may or may not also still be a state senator from District 13 northwest of St. Cloud, and may or may not still be the president of the Minnesota Senate. Fischbach says it’s constitutionally permissible for her to play all three roles. DFL Attorney General Lori Swanson’s office has issued an opinion saying that it is not.

That disagreement now seems likely to land at the Minnesota Supreme Court. That’s fitting. It’s the body that’s constitutionally tailor-made to resolve conflicts such as this one.

Yet we wish DFL Gov. Mark Dayton and state legislative leaders would have opted for a different resolution. Dayton would have done well to accept a proposal from Republican legislative leaders to call a special session of the Legislature and elect a new Senate president - a DFLer from a reasonably safe DFL seat - before the midnight transition in the lieutenant governor’s office occurred. That new Senate president would then have succeeded Smith as lieutenant governor, allowing the Senate to then re-elect Fischbach as Senate president if it wanted to keep her in the presiding officer’s chair.

That special-session maneuver would have kept Fischbach in the Senate, where she says she prefers to remain. It would have put a DFLer in line of succession for a DFL governor, in keeping with the outcome of the 2014 gubernatorial election. But it also would have led to a vacancy in a Senate seat occupied currently by a DFLer, not a Republican. That did not suit Senate Minority Leader Tom Bakk, who heads a DFL caucus that’s just one seat short of majority status in the 34-33 Senate. He’s keen for an opportunity to flip those numbers in his favor.

Dayton stuck with his usual formula for special sessions, requiring prior agreement on the session’s work plan from all four legislative caucus leaders. Bakk thus appears to have been able to scuttle a reasonable plan for avoiding weeks of uncertainty and expense as an expected lawsuit over Fischbach’s status winds through the courts. Without a special session, the Senate has no opportunity to elect a new president until it reconvenes in regular session on Feb. 20.

Today is a day for thanking Franken, both for eight-plus years of U.S. Senate service and for recognizing that his effectiveness had recently been sorely damaged. He did well by opting to resign for Minnesota’s sake. It’s also a day for good wishes for Smith as she brings her extensive experience in public service to bear in a new role.

And it’s a day to urge an early and decisive determination about the Minnesota Senate status of the new lieutenant governor. With the state Senate’s narrow divide, much more than Fischbach’s political career could hinge on that call.

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St. Cloud Times, Jan. 5

Fischbach sets right tone in state’s ‘Lt. Gov.’ debate

It’s only for about nine months - just deal with it.

No, that’s not advice to a newly expectant mom or people tired of, well, the length of every pro sports season.

Rather, that’s this board’s advice to Minnesota legislators, Gov. Mark Dayton and - as of Wednesday - “acting” Lt. Gov. (and still state Sen.) Michelle Fischbach regarding the much publicized effort to replace Tina Smith as Minnesota’s lieutenant governor after she became a U.S. senator to replace Al Franken, who quit.

The good news? Fischbach herself seems to be taking that tack. More on that in a bit.

The details

Legally, the state Constitution requires the Senate president to become lieutenant governor if needed. Republican Fischbach has held that post since 2011. Politically, her advancement to No. 2 in command of the state is a problem for both parties.

Democrats run the governor’s shop and Republicans, by a narrow margin, control the Senate. Forcing Fischbach into the job creates the possibility Republicans could lose Senate control via an election.

Realistically, though, Republicans losing Fischbach’s seat at the polls seems like a long shot. She’s rolled to re-election victories for 20 years in a district (and larger geographic area) that have blinked bright red for just as long.

Plus, Fischbach has said if she is forced to leave her Senate post, she will resign the No. 2 job and run in the special election.

On the flip side, if Fischbach is forced to take the title and give up her Senate post, Democrats could lose the governor’s chair in the unlikely event Dayton becomes unable to serve out his term.

Faced with this politically ambidextrous conundrum, various leaders of both parties have at differing times threatened everything from special session to special election - and, of course, a massive court fight.

Just deal with it

Enough with the politics. Just deal with it.

Come Nov. 6, voters will pick a new governor and every legislative seat will be on the ballot. These elected officials need to avoid extreme actions until then.

Thankfully, Fischbach seems to be trying to set that tone.

According to a St. Paul Pioneer Press report, she is calling herself “acting lieutenant governor,” is refusing to take the position’s paycheck and has not taken the oath of office.

Considering not just the politics mentioned above, but the reality that, as long as the governor is healthy, the lieutenant governor has no duties considered mission-critical to the operation of state government, Fischbach’s strategy deserves praise.

After all, It’s only for about nine months - just deal with it.

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