Minneapolis Star Tribune, March 1
Economic forecast signals caution in Minnesota
Walz, Legislature face a less rosy outlook and should react accordingly.
A new economic forecast shows Minnesota’s revenue is declining, and the economic outlook for both the state and nation is weakening. A projected state surplus of $1.5 billion has shrunk by a third in less than three months.
Trade disputes, retaliatory tariffs and a major overhaul in federal tax policy are all contributing factors. So is an aging population, both here and across the country. Minnesota’s increasingly tight labor market is beginning to constrain business growth. Despite the lowest unemployment rate in 18 years, there is little evidence of more than nominal wage growth. The robust growth Washington promised would result from federal tax cuts appears to have been short-lived and is already waning.
The question now before Minnesotans and their political leaders is how best to prepare in the face of such disquieting trends.
Gov. Tim Walz left no doubt this week as to the course he will pursue: full steam ahead on a proposed $49.5 billion, two-year budget that includes spending he said would improve schools and roads, foster economic prosperity and make Minnesota a magnet for the workers it so badly needs. His reasoning: If Minnesota is to continue attracting more residents than it loses - reversing an earlier 15-year trend - it will need to invest in “the very things that grow our economy, getting ahead of it.” He includes in that strategy a bonding proposal of $1.3 billion. Infrastructure improvements, he said, “are one of the best firewalls against a downturn.”
Republicans oppose additional spending, saying now is the time for the state to pull the belt tighter and limit spending in the face of potential economic turbulence. There is little evidence that government can cut its way to prosperity, but they’ve made valuable points about the limits of Minnesotans’ pocket books and the need to remain competitive.
The Star Tribune Editorial Board believes the Walz budget proposal is overly ambitious and that the forecast should be a big, blinking “Caution” sign for both sides. The Great Recession of 2008 showed that economic stimulus can help restart growth. But that strategy has its limits, and it’s arguable whether all the spending served that cause. Additionally, unlike the feds, states are not allowed to deficit-spend. The Walz menu of revenue-raisers includes a 20-cent-per-gallon gasoline tax hike. That’s a regressive tax that will pinch hardest among those who are car-dependent and must travel long distances. The trade-off, of course, is better, safer roads and bridges.
Nevertheless, weakening economic growth and slow-rising wages should signal to Walz that some restraint may be necessary in coming months, both in spending and bonding. To his credit, Walz has said that in light of the new forecast, his agencies will be looking for new ways to economize.
Republicans, too, must show caution. They are right to watch the bottom line, but it’s not enough to rail against all new spending. Their refusal to reconsider the sunsetting of a provider tax that underpins the state’s subsidized health care seems less than fiscally responsible because not extending it would blow a $1 billion hole in the budget in coming years. And while it’s easy to go overboard on bonding, their opposition to any bill this year seems ill-considered given indications that the window for low-interest rates may be closing. Minnesotans are unlikely to thank them for delaying repairs that, like the $600 million of prison repairs, will grow only worse over time.
There’s also little hard evidence so far to back up House Minority Leader Kurt Daudt’s claim that wealthy taxpayers are fleeing the state in large numbers. What’s known is that lost federal deductions are costing some Minnesotans plenty. That should get reconsideration in Washington.
Finally, let’s stop talking about even a $1 billion projected surplus. It’s a chimera, the result of a foolish accounting gimmick put into law years ago that has distorted this state’s budgeting ever since. Inflation is real and must be counted when projecting future expenses. The forecast shows that continuing the current level of services, with inflation factored in, would cost . wait for it . about $1 billion. Walz has said he wants to factor in inflation and restore transparent budgeting practices. We say the sooner the better.
This state remains in an enviable position, with a AAA credit rating, ample budget reserves and a still-growing - albeit more slowly - economy. Democrats and Republicans should prepare for any economic turbulence ahead by striking a balance of prudent new spending that keeps this state an attractive place to live and work, along with a keen eye for cutting wasteful spending.
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Post Bulletin, Feb. 28
Klobuchar reflects positive traits of Minnesotans
It’s too early to endorse a candidate for president or to even play the odds. The 2020 election is nearly two years away, and the primaries and caucuses are still a year in the future.
But with Minnesota Sen. Amy Klobuchar having declared that she is a candidate for the Democratic nomination, it seems like a good time to reflect on what is being said about our senior senator and the state she represents.
Read or listen to national profiles and commentary about Klobuchar and these words come up again and again: pragmatic, reasonable, civil, common sense, adult-in-the-room. In other words, she’s a Minnesotan.
We don’t have any idea at this point if Klobuchar will have more success as a presidential candidate than previous Minnesotans who made the run. Everyone from Stassen to Humphrey to Mondale to Bachmann has run, some getting closer to the Oval Office than others.
When someone from your state runs for president, it tends to focus attention not only on the candidate, but on the culture from which they have emerged. So what the national media is saying about Klobuchar they are also saying about Minnesota.
For several years, reports have mentioned Klobuchar’s sense of humor, which usually involves making fun of herself. Local reporters who have covered Klobuchar know that, like many Minnesotans, Klobuchar loves to share a funny story - never mean-spirited - about a stuffy colleague or her own foibles.
“Melania (Trump) is Slovenian, just like me,” the height-challenged Klobuchar recently told a Vogue magazine reporter. “I say every time I see her it’s like looking in a mirror.”
By the way, that Vogue reporter came away exhausted from trying to keep up with Klobuchar who, like many Washington officials, works a lot harder and longer than we would imagine. The same could be said of Minnesotans, who generally work long and hard because that’s what’s expected of them.
Klobuchar comes from a middle-class background and has talked proudly of her upbringing, one that differed little from that of most Minnesotans. It was not without its tribulations - her father is an alcoholic, with all the stress that places on a family.
Yes, we’ve also heard the reports about Klobuchar being a tough boss, one who can be rough on her staff. She answers by saying she also demands a lot of herself and her fellow citizens. And Klobuchar has yet to be severely tested in the national spotlight. Will she be sure-footed, or will she choke, like so many of Minnesota’s sports teams?
To repeat, we’re not here this early in the process to endorse Klobuchar’s run for the presidency. The coming months will determine how well-suited she is for that high office.
For now, however, we are enjoying how the positive things being said about Klobuchar reflect well on where she comes from: Minnesota.
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The Free Press of Mankato, Feb. 28
Legislature: Keep gun violence debate front and center
Why it matters: Requiring votes on gun violence prevention bills will allow voters to see where their representatives stand on this election issue.
Last year, Republicans in control of the Minnesota House and Senate shut down gun violence votes on background checks and red flag threats on procedural moves and kangaroo hearings.
Now that the DFL is in control of the House, Minnesotans will be better represented on this critical issue that many say flipped the House to Democrat control.
Democrats have so far adhered to a much more inclusive hearing process and debate. The House public safety committee debated and heard testimony on the background check bill for hours Wednesday evening and had to adjourn the meeting at midnight. The committee heard and debated another bill regarding taking guns from those who pose a threat Thursday.
The committee passed the background check bill 9-7 along party lines.
Last year, the same committee controlled by Republicans devoted a fraction of the time to hearing very similar bills and tabled both, after a GOP member of the committee said there would be plenty of debate in the coming weeks. There was virtually none after that.
When it came time for the Republican-controlled Senate to hear the bills last year, there was also little or no debate. A proposal to discuss background checks and red flag bills on the Senate floor also fell silent (Two Democrats did vote against hearing those bills as well).
With polls showing Minnesotans and the country favor expanded background checks by margins of 70 percent to 90 percent, it’s hard to justify not even giving bills fair vetting and hearings.
As the House passes these gun violence prevention bills, the GOP-controlled Senate will be under intense pressure to act. Many of the Republicans senators represent districts where DFL House candidates beat GOP incumbents.
There will likely be an attempt to thwart hearings and votes in the Senate again, as leadership protects those who the voters might hold accountable. Above all, both parties should allow the bills to be heard and voted on. Then, the voters can decide who’s on their side in the next election.
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