Almanac: At the Capitol

I'm pretty impressed with what the Democrats are doing at the statehouse these days. But now the rubber hits the road. How will it all play out with the governor?

A couple things should not go unnoticed: DFLers are way ahead of past years in passing omnibus budget bills into conference committee … all, at least in the Senate, will pass before spring break. I can't remember the last time that happened.

And DFLers are taking a strong stand for what they believe and what they promised in their campaigns. Their constituents want more money for education, property tax relief and transportation, and the DFL is putting money on the table. They are proposing tax increases. That takes guts and I'm pleasantly surprised.

Now the spotlight turns to the governor. With every passing day he continues to say "no new taxes." He didn't sign a pledge, but he sounds like a broken record. Let's hope the governor is posturing. Does he really want to go back to the disaster of 2003 when he won 100%? Governor, the legislative process is not "all or nothing." To veto any and all tax increases is wanting it all.

Now is the time for the legislature to revisit the old days. We were forced to compromise ... with the governor, house and senate giving and taking their share. It all came to a head in 2000 with three-party government, when the process became transparent. Majority Leader Roger Moe (with the help of chief of staff Vic Moore who came up with the idea) announced the big compromise: a Third, a Third, a Third. He gave a name to what really happened for years in the legislative process.

It was simplistic, I'll grant you. The Independent Governor got his license tab fee reductions. The Republican House got their income tax rebates. And the DFL Senate got to invest their dollars in education and environment. It was a Third, a Third, a Third.

Gov. Pawlenty, you are now only one-third of the equation. You can't have it "all or nothing" a second time regarding new revenues. Take your third and use it to protect the taxpayers most important to you. Politically, you have everything to gain and you can claim victory by tempering the "excesses" of the DFL.

To their credit, Democrats have shown willingness to compromise. DFLers can take their two-thirds and focus it where investments really count. Not every interest group will be happy. But politically they also gain by moderating their tax proposals.

And in the end, Minnesotans win.

Here's a prediction: By the time the Crosstown Commons project is completed three, four, maybe five years down the road, today's $285 million price tag for construction will have swelled to something more like half-a-billion, the result of inevitable delays, hang-ups, and rising labor, equipment, and material costs.

Here's another prediction: On the very day the Commons, a massive expansion and reconstruction of the Highway 62/35W interchange on the border of Richfield and Minneapolis, is finally opened it will instantly be operating at full capacity. Furthermore, in a very short period of time — ­ a matters of years, not decades ­ — it will be obsolete, and a new "solution" needed for the ever-growing flood of traffic passing through this area. True, the Crosstown Commons expansion does make room for a rapid mass transit corridor but —­ and this will come as a huge surprise — no money has been allocated to finance construction or equipment for such a corridor. Where will the money come from to turn that particular dream into reality? Your guess is as good as mine.

There are many reasons why the Twin Cities metro region has some of the worst traffic congestion in the country, none of them addressed by projects like the Crosstown Commons. Over the past 30 years, urban sprawl in the metro region has grown virtually unchecked; outer ring suburbs keep popping up like toadstools after a rainstorm ­ — toadstools subsidized in large part with tax monies transferred from the core urban area and inner-ring suburbs. The result? Twin Cities commuters drive more miles to-and-from work, shopping, and school.

Meanwhile, structural changes in the American economy have made the single-breadwinner household an endangered species; today, most families have at least two wage-earners, sometimes more, all traveling to work at different times, in different directions, and with little chance that they can reach their destination on the metro area's under-built and under-funded mass transit system. At the same time, changes in consumer expectations have aggravated the very real structural changes causing this uptick in multi-wage households. During the 1950s, the average home in the United States was about 1,200 square feet. Today, despite the fact that the average size of American families is much smaller than 50 years ago, the average new home in this country boasts more than 2,500 square feet of living space. And that living space —­ ­ and surrounding property ­ — is crammed not only with more cars but also the expensive consumer toys we have become convinced are prerequisites for membership in the Good Life.

Small wonder that in the past 30 years, the total of miles driven and number of vehicles on the road in the Twin Cities have far-outstripped actual population growth.

By now, we should have learned that if we build it, they will come. Or, more accurately, drive. By now, we should also have learned that we cannot solve our transit problems by building more highways. More highways mean more cars on the road and the need to build more highways, with all the economic and environmental burdens ­ — from air- and water-pollution to the expansion of impermeable surfaces and its impact on runoff and erosion ­ — that more cars and highways entail. The answer now, as yesterday, is mass transit. Not pricey futuristic Buck Rogers versions of mass transit, rooted in the faith that we can find a technological fix for the fix technology has put us in, or even LRT ­ — at least not LRT alone ­ — but true inter-modal rapid mass transit that combines new technologies with the creative use of current technologies to produce a system that has both the capacity to drain a significant percentage of cars off our roads and the kind of fare structure to lure middle-class and affluent commuters out of their autos and on to mass transit. Until then, we can expect to pour more public money down ratholes like the Crosstown Commons, the new multi-lane traffic jam coming our way some time in 2009 or 2010.

There's a great debate in our Brain Trust about Pawlenty's popularity. It started with Minnesota Campaign Report 's Joe Bodell (where he provides a "healthy dose of snarky wonkishness") weighing in on why he thinks the governor should sign a bill granting domestic partner benefits:

In neither of the Governor's two statewide victories did he get especially close to 50% of the vote. Whether he's on the GOP presidential ticket as John McCain's VP candidate or simply seeking to deliver Minnesota to the Arizona Senator's Win column, the Governor simply does not and will not have the pull with Minnesotan voters to deliver the state to any candidate as long as he espouses a hard-right stance on social issues.

Now, the U of M's impressive poli sci guy Eric Ostermeier (check out his witty bio and photo) provided another interesting rejoinder on a fellow Brain Truster's post reminding us of TPaw's strong approval ratings and other polls:

The truth is Minnesotans are nearly split in their attitudes toward this legislation — with support for such partnerships only just edging out opposition to it. A poll conducted by SurveyUSA last month found a bare majority (52%) supported allowing public agencies to grant health benefits to the "domestic partners of their employees." (Note: the polling question did not use the term "same-sex partners" to describe the bill's beneficiaries; had it done so it is likely the level of support would have dipped below the 50 percent mark).

With at least 40 odd percent of Minnesotans in opposition to the state providing these same-sex benefits, it is difficult to sustain the characterization of a bill veto as a "hard right" tactic or that it panders to the "radical conservative fringe" as Bodell writes.

And on the often-talked about topic of a Pawlenty-McCain ticket, Ostermeier reminds us of some solid facts that contradict political wisdom:

Furthermore, Bodell overestimates the likelihood that presidential candidates select running mates based on their ability to pick up the VP nominee's home state. This is rarely the case and VP nominees are notorious for their inability to sway elections. In fact, since 1976:

Three VP nominees failed to 'pick up' home states that the opposing party normally carries in presidential elections:

• John Edwards, Democrat (North Carolina, 2004)
• Jack Kemp, Republican (New York, 1996)
• Lloyd Bensten, Democrat (Texas, 1988)

One additional VP nominee failed to carry her home state that was normally a safe 'hold':

• Geraldine Ferraro, Democrat (New York, 1988)

The members of press corps think the governor's lack of real outrage over the Senate's big income tax hikes and gutting of his business tax-free zones speaks to the fact he's more engaged and interested in national politics. In yesterday's press conference he really played nice and respectful of "Democrat's governing philosophy." But if Democrats think sending Pawlenty big tax hikes to veto will hurt him, they could be wrong, it may just elevate his national ambitions and solidify his conservative credentials while saying he's protecting the taxpayers. Not that the press has any great new insights into the gov right now because no one can even remember the last time the he had a press conference in his Capitol office. He's been out of the building doing lots of speeches and traveling in Greater Minnesota between McCain campaign stops. We've been trying to book him on Almanac for months and generally get no response to our requests.

Larry Sabato talks about the VP race and says about Pawlenty:

Conservative with a Midwest twist, executive experience, swing state, McCain favorite. Questionable whether he could carry MN after weak 2006 performance.

In a recent Brain Trust commentary (Legislature, Governor at Impasse on Several Issues), Joe Bodell suggested Governor Tim Palwenty's likely veto on a domestic partnership bill for state employees in same-sex relationships might not be a rational strategy in light of his rumored "national aspirations."

Bodell states Pawlenty should sign the domestic partnership bill because to veto it would further project his image of taking "hard-right stance(s) on social issues." However, such a veto would only be a hard-right political move if you buy into the premise that signing this bill is an act of centrism, and not 'hard-left.'

The truth is Minnesotans are nearly split in their attitudes toward this legislation — with support for such partnerships only just edging out opposition to it. A poll conducted by SurveyUSA last month found a bare majority (52%) supported allowing public agencies to grant health benefits to the "domestic partners of their employees." (Note: the polling question did not use the term "same-sex partners" to describe the bill's beneficiaries; had it done so it is likely the level of support would have dipped below the 50 percent mark).

With at least 40 odd percent of Minnesotans in opposition to the state providing these same-sex benefits, it is difficult to sustain the characterization of a bill veto as a "hard right" tactic or that it panders to the "radical conservative fringe" as Bodell writes.

Secondly, even if — hypothetically — a Pawlenty veto of this bill were tantamount to a rejection of the centrist views held by the average Minnesotan, it is not at all clear such an act would jeopardize Pawlenty's potential national ambitions. Bodell makes the mistake of suggesting a) the Governor's narrow electoral victories are indicative of his having low political currency statewide and b) that the Governor might be added to a John McCain presidential ticket in part to deliver the state in the General Election.

Bodell confuses Pawlenty's two plurality victories in 2002 and 2006 (44 and 47 percent respectively) with the popularity of the Governor among the electorate. The fact is a majority of Minnesotans have consistently approved of Pawlenty's job performance. In 17 of the last 19 monthly public opinion polls conducted by SurveyUSA dating back to September 2005, Pawlenty's approval rating has been at 50 percent or higher — frequently flirting with 60 percent (these ratings have been replicated in 2006 surveys by the Humphrey Institute and Minnesota Poll). Pawlenty's favorability ratings also outnumbered his unfavorable numbers in two MPR / Pioneer Press polls during Election 2006. The fact that third parties thrive in the Gopher state in gubernatorial elections — making it difficult for a winner to reach 50 percent of the vote — should not lead us to believe that Pawlenty himself is actually unpopular or his views out of touch with his constituency.

Furthermore, Bodell overestimates the likelihood that presidential candidates select running mates based on their ability to pick up the VP nominee's home state. This is rarely the case and VP nominees are notorious for their inability to sway elections. In fact, since 1976:

Three VP nominees failed to 'pick up' home states that the opposing party normally carries in presidential elections:

• John Edwards, Democrat (North Carolina, 2004)
• Jack Kemp, Republican (New York, 1996)
• Lloyd Bensten, Democrat (Texas, 1988)

One additional VP nominee failed to carry her home state that was normally a safe 'hold':

• Geraldine Ferraro, Democrat (New York, 1988)

Another six VP nominees hailed from states that are reliable 'safe states' in little danger of being lost by their running mate (in short, they were not added to the ticket to win their home state):

• Dick Cheney, Republican (Wyoming, 2000 and 2004)
• Joe Lieberman, Democrat (Connecticut, 2000)
• Dan Quayle, Republican (Indiana, 1988 and 1992)
• George H. W. Bush, Republican (Texas, 1980 and 1984)
• Bob Dole, Republican (Kansas, 1976)
• Walter Mondale, Democrat (Minnesota, 1976 and 1980)

Only one VP nominee hailed from a state that could actually be considered a true 'pick-up' for the ticket:

• Al Gore (Tennessee, 1992 and 1996)

However, even these Democratic victories in Tennessee were more likely due to forces other than Gore's home-field advantage (as witnessed in 2000 when Gore lost the state as the Democratic presidential nominee). For one, Clinton hailed from the south as the former governor of Arkansas, and Tennessee was only one of several southern states the Democratic ticket won in 1992 (Kentucky, Arkansas, Louisiana, Georgia) and 1996 (Kentucky, Arkansas, Louisiana, and Florida). Additionally, Ross Perot's strong performance (picking up a disproportionate amount of independent and republican votes) likely tilted the state to Clinton. In 1992 Perot earned 10.1 percent in a race decided by 4.7 points. In 1996 Perot won 5.6 percent in a state Clinton won by just 2.4 points.

In sum, despite Pawlenty's popularity within Minnesota, it is unlikely he will be selected to be McCain's running mate for the primary purpose of increasing that ticket's advantage in winning the Gopher State's 10 Electoral College votes in 2008. Moreover, it is unlikely the governor will bend his principles on an issue like same-sex benefits, when a near majority of the state's residents actually agree with him on this issue. His political currency is strong enough to survive a veto on this issue.

I have to admit that I get impressed when a government agency can do something — anything — efficiently enough that an ordinary person would take notice of it. For instance, I marvel at just how good a job the Ventura and Pawlenty Administrations have done improving the experience of renewing car tabs; what used to be an onerous and unpleasant task is now often done with hardly a dent made into my day. Yippie!

Obviously the current batch of State Legislators are a bit more ambitious; so far this legislative session they have taken on reshaping the Earth's Climate, Energy Policy, changing the Urban landscape, getting Minnesotans out of their cars and into government-run transportation (using money taken from those using said cars), and of course are currently looking at policies to redistribute Minnesotan's incomes so that the economic landscape more precisely reflects the desires of the Limousine Liberals from Minneapolis.

That's quite an agenda!

I won't belabor the obvious: The tax increases required to accomplish all this will be remarkable in scope.

Rather, I would like to focus on a related question: From where did these otherwise sane people ever get the idea that any human institution, no less government, can or does have the kind of power and wisdom to accomplish all these fine tasks without there being enormous and generally negative unintended consequences?

Let's take just one — just one out of all these many tweaks that these Masters of the Universe have made to the natural state of things — and see what consequences they have wrought.

Consider doubling the mandated amount of Ethanol in our gasoline from 10% to 20%, as happened recently here in Minnesota. A number of new Ethanol production plants have sprung up. These, in turn, have been buying corn at a tremendous rate, popping up the price of corn. The price of corn shooting up means that animal feed products have shot up in price, as well as other corn-based products. The price of tortillas in Mexico, for instance, has about tripled. Tortillas are a primary source of protein for most Mexicans, and are becoming unaffordable to many (who will now consider emigrating North, of course). Further, high corn prices stimulate farmers to shift production of soy and other products to corn. Oh, but wait, all those ethanol plants are starting to suck up much of the water in the water table, making the lives of the farmers and ranchers much more difficult....

All this, and for what exactly? Little more than to pretend to do something, as Ethanol itself is a rather poor fuel and is not economically competitive with oil without subsidies and trade barriers.

In the long run our Ethanol policy will result in income transfers from poor Mexicans to wealthy Americans, excessive harm to our farmland as we encourage farmers to plant more corn than is healthy or necessary for the market, we will drive up the cost of natural gas (which is one of the main inputs in Ethanol production) that Minnesotans use to cook and heat their homes, and do real damage to our watersheds.

Liberals never seem to learn the lesson that the world is not so easily shaped to our desires. The unintended consequences of our actions can far outweigh the intended consequences.

AS bad an idea as that one rather modest tweak to our energy policy was, now multiply the possible consequences of some of the other proposed changes the liberals are pushing. Climate change policies. Renewable energy on a grand scale. Reshaping the urban landscape. Increasing transit ridership. Redistributing income.

Think there might be an unintended consequence or two?

Well, if Larry Pogemiller and the Masters of the Universe over in St. Paul get their way, we may have the opportunity to find out. Unfortunately, it may be that a good number of our entrepreneurs will be watching the carnage from a comfortable vantage point in another state.

Update: Senate Tax Chair Tom Bakk just told us he wants to raise taxes on every Minnesotan by rolling back the 2001 tax cut on all income tax tiers. The caucus is deciding right now just how to raise taxes for a new education spending bill that will provide new money for early childhood, K-12 and higher education. This tax increase will not be part of the omnibus tax bill, but will live in this new education bill that's coming from the finance committee.

We'll maybe it's not a secret, but it's not in any official public document. The Senate just rolled out its tax bill and the only tax increase in print is gaining money from cracking down on foreign operating corporations. Everyone around the Capitol believes a big income tax increase is coming from the Senate at any minute, maybe Thursday in Tax Committee or as late as Friday when the tax bill hits the Senate floor for a vote. Today on the floor several Republicans called out their colleagues saying the tax increase is coming Friday. I hear there's still a bit of strive within the Senate DFL caucus about just when to unveil their tax increase. Some members want to deal with it before leaving for Easter break, others are concerned about getting an earful on tax increases from voters when lawmakers head home to their districts. The number we're hearing is a billion dollars. Now part of that billion could come from the $629 million the Senate just socked away into budget reserves because the other number we're hearing is $300-400 million which if combined with the number in reserves also equals a billion. Anyway, everyone in the Capitol was skeptical that the Senate would really stick to its stingy budget targets which were even lower than the governor's numbers. But leaders kept saying "these are real numbers" I think we'll soon see how real those original numbers really are.