April 15 is tax day. I’m happy to pay taxes. I’m happy to have an income so that I can pay taxes — and buy food and clothing and books and wi-fi. I’m happy to pay my share for schools and roads and social services. I am not complaining one bit about tax day.
Plenty of other people have complaints. Continue reading
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State economist Tom Stinson released the November 2009 budget forecast yesterday, and the numbers are grim: a looming $1.2 billion shortfall in the 2010-2011 biennium and a staggering $5.4 billion deficit in 2012-2013. This is by far the biggest news in Minnesota today – yes, much bigger than the headlined Petters conviction, the rally at the capitol for a new Vikings stadium, or the MOA apology to Sarah Palin. The shortfall is due to declining employment and income for Minnesotans, which results in lower tax collections. The governor’s initial response was to talk about delaying local government aid (LGA) due to be paid to local governments in December, and to slash LGA for next year. Of course, he won’t consider raising tax rates, even on the wealthiest Minnesotans, even though LGA cuts will mean less police and fire protection, less road and highway maintenance, and less money for medical care and schools.
Stinson said that the recession is over, but that recovery will be extremely slow.
Minnesota’s October unemployment rate was well below the national average, but that does not mean the state’s economy has avoided the worst of this recession. … Employment in Minnesota is now expected to fall by more than 150,000 jobs between the first quarter of 2008 and the first quarter of 2010, 30,000 more than projected last February. If this forecast holds true, more than a decade of job creation will be lost. The combination of substantial current and expected job losses and what is expected to be a slow recovery, leaves Minnesota employment below its pre-recession level through 2013.
Here are links to the report itself, and to insightful commentary:
• Summary of the report (pdf, 9 pages)
• Full text of the report (pdf, 77 pages)
• Press conference handouts (pdf, 9 pages, mostly tables and graphs)
• MPR report:
After seeing the forecast, Gov. Pawlenty repeated his long-standing opposition to tax increases of any kind. He said the budget should be balanced by spending cuts alone. Pawlenty also said he may be forced to unilaterally cut state aid payments to cities and counties known as LGA.
“For the most part, we are going to wait and invite the Legislature to join us in trying to find a collaborative solution to this challenge, but we may not be able to do that entirely as it relates to some payment schedules,” Pawlenty said. “One of them could be the LGA payment schedule at the end of December.”
• Minnesota Budget Bites calls for “long-term solutions to long-term problems,” and insists that tax increases are one part of the solution:
We need to raise revenues to help us resolve the current deficit – and future deficits. We can’t solve the whole problem by raising revenues, but it is unsustainable to continue to address budget deficits almost entirely by relying on one-time resources, spending cuts and budget gimmicks. Not only are those decisions hurting Minnesotans who need help the most during the current economic downturn, but they are also reducing the investments Minnesota needs to position our state to take advantage of an economic upswing. We wouldn’t be alone in raising taxes. Nationwide, 35 other states are currently facing budget deficits. And during the last year, at least 30 states have enacted tax increases to help close budget holes. It’s our turn.
• The Minnesota Association of Professional Employees (MAPE) noted in a press release that “Last May, MAPE outlined millions of dollars in waste that included out-of-state travel, uncollected revenue and the Pawlenty Administration’s bloated management. The result of MAPE shining the light on certain administration practices was $10 million trimmed from out-of-state travel and the Department of Revenue stepping up collection efforts on money owed to our state. These are positive steps, but more action is needed to cut waste to preserve vital services for Minnesotans.” The May MAPE press release identified $350 million in proposed savings.
• Politics in Minnesota offers Steve Parry’s analysis of the amount of money being spent, month by month, and the implications for unallotment and budget cuts.
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A bi-partisan summit with former Governors Arnie Carlson, Al Quie and Wendell Anderson and several former legislative majority and minority leaders talked about different proposals to tackle next year’s largest-ever budget deficit — but Governor Pawlenty boycotted the meeting. MPR reports:
“All of the governors here, and I think just about all of the leadership here, have gone through processes where you’ve had to deal with budget deficits,” Carlson said. “But nothing that we dealt with will be as large as the one that is coming. That’s the point.”
Carlson is proposing the current governor, as well as the majority and minority caucuses of the Minnesota House and Senate, come up with individual plans for solving the pending deficit. He said those plans, which would certainly include spending cuts and possibly some tax increases, could then be presented to the public next year as part of the gubernatorial campaign.
<!–more–>Pawlenty isn’t running for governor next year, so he doesn’t have to worry about the deficit, right? Pawlenty and a few Republican lawmakers skipped the summit in favor of a meeting with business leaders in Eden Prairie, with T-Paw saying it makes more sense to talk about jobs than about the budget deficit. Not so, according to the St. Paul Legal Ledger analysis, which points to Minnesota’s first-ever revenue decline from one two-year budget period to the next and to a lagging economy that won’t see state revenues beginning to recover for at least 18 months. While the official state estimate is for a $4.4 billion deficit in the next biennium, the actual figure is likely to be more than $7 billion, cut costs for delivery of public services
:
In February 2009, as the Democratic-controlled Minnesota Legislature was wrangling with Republican Gov. Tim Pawlenty over the budget crisis, five of Minnesota’s largest foundations contracted with the St. Paul-based Public Strategies Group to develop ideas for transforming Minnesota’s “financing and delivery of public services.”
The result was a report issued in March that suggested nine ideas…. The suggestions include focusing state spending on health outcomes rather than services, developing a regional approach to county human service delivery, and providing choice and competition in local governments to improve quality and costs.
The two-page executive summary of the PSG report and the 70-page Collection of Ideas offer a lot of food for thought. The 2010 gubernatorial election campaign is already underway, with many legislative leaders actively engaged. Pawlenty seems set on maintaining his slogan-based non-leadership on budget and deficit issues. The 2010 legislative session seems doomed before it begins. But the political summit and the foundation brain trust offer some hope for 2011. If the bi-partisan political leadership group can force an actual debate on the issues, the 2010 election could produce a much more rational, solution-oriented legislative session in 2011.
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Omodt escapes from Gang Strike Force Hennepin County Sheriff Rich Stanek has called a news conference for this morning to explain why Hennepin County Captain Chris Omodt is leaving his post at the head of the Gang Strike Force. Omodt, who was brought in to clean up a bad situation, could just be giving it up as an impossible job. The latest revelations and accusations from the Strib:
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MN economy’s “gruesome bookends” Steve Perry writes in MinnPost that Minnesota’s dwindling unemployment insurance fund and tax revenues tied increasingly to the business cycle offer two troubling “bookends” of evidence that the state’s fiscal troubles will continue far into the future. On the UI front, Minnesota has less than two months of reserves, with a year considered healthy, and is expected to join the ranks of states borrowing from the feds to pay unemployment benefits, and running up a debt that will further complicate future budgets.
On the tax side, Perry cites a complex analysis offered by state economist Tom Stinson in a PIM interview with Perry, which explains in greater depth what Perry summarizes for MinnPost as:
To make a long story short, and somewhat over-simple: Through-the-roof revenues from capital gains and bonus income during the bubble years both distorted and inflated state revenues, and led states to cut taxes and expand spending in unsustainable ways.
The PIM interview includes some Stinson recommendations about needed changes in the tax structure, including raising some taxes, changes in capital gains tax treatment, and much more. From a journalistic point of view, it’s somewhat amusing to see Perry in MinnPost referencing and simplifying Perry in PIM. I’m glad he did, as the PIM article is both important and tough reading. Its conclusion: Minnesota tax revenues will not return to pre-recession levels until 2014.
IRV is in The MN Supreme Court ruled that Instant Run-off Voting, aka Ranked Choice Voting, is legal and constitutional and Minneapolis can go ahead and use the choice already approved by voters a couple of years ago. Opponents say they will keep on suing, in other cities that adopt IRV, and probably also in challenges to results of elections using IRV. They don’t really care what the voters say, or what the Supreme Court says. Their lawsuits just increase the costs of IRV for every city that adopts it. The St. Paul City Council is expected to consider IRV now, having delayed consideration to see what the Supreme Court would say.
The FairVote Minnesota press release explains the process:
RCV is a tested, accepted and implementable system by which voters rank candidates in order of preference, ensuring majority winners in single-winner races where there are more than two candidates on the ballot. Under RCV, voters cast their vote for their favorite candidate knowing that if he or she doesn’t gather enough votes to be one of the top two finishers, their votes will count toward their second choice. Votes cast for the least popular candidate are not “wasted”, but rather redistributed to more popular candidates, based on the voters’ second choices, until one candidate emerges with a majority of votes. In multi-winner elections, like the Minneapolis Park Board RCV ensures majority rule while empowering small groups of voters with greater opportunity to elect a candidate that represents them.
Politics in Minnesota explains the expected political impacts of IRV:
Since, of course, the DFL dominates Minneapolis politics, this could let marginalized urban conservatives and independents efficiently consolidate their votes around more conservative candidates. On the other hand, it also frees those to the left of the DFL mainstream to vote for Greens and other lefties, and then safely set a second choice for a liberal DFLer.
You can’t get there from here Stretches of I-94 and I-35W in the heart of the metro area will be closed this weekend. The Strib summary: “All northbound lanes on 35W will be closed from Crosstown Hwy. 62 to 94; all of 35W’s southbound lanes will be closed from S. 60th Street to the crosstown (which will remain open). Westbound lanes of 94 will be closed between 35W and Hwy. 280; access from the Cretin-Vandalia exit in St. Paul will be blocked.”
Minneapolis Police Department layoffs No police officers get the ax, but 17 community service officers will be laid off, a consequence of less-than-expected federal stimulus funding, reports the Strib. In February, Mayor RT Rybak thought the city would get $5 million for police — the actual figure is now down to $3.73 million.
World/National Headlines
Worth-less The personal wealth of Americans dropped by $1.3 trillion in the first quarter of 2009, pushing back to 2004 levels, reports AP. The 2.6 percent decline, mostly in the value of homes and stocks, came on top of earlier losses during 2007-08. On the other hand, “Americans’ personal savings rate zoomed to 5.7 percent in April, the highest since 1995.”
Peru protests move to Lima About 20,000 marched on Congress, amid clouds of tear gas, reports BBC, protesting last week’s violence against indigenous people blocking roads in the Amazon region and protesting against oil and gas drilling.
Confrontations between police and indigenous protesters last week led to the deaths of more than 50 people.
Congress in Lima voted on Wednesday to suspend two controversial land decrees.
Aung San Suu Kyi BBC reports that the trial of Nobel Peace Prize winner Aung San Suu Kyi has been continued to June 26. Suu Kyi has been under house arrest for most of the past 19 years, but her house arrest was scheduled to end in May. Instead, a bizaare incident involving an American who swam a lake to enter her home uninvited led to the government charging Suu Kyi with violating the terms of her house arrest. According to BBC, “Observers believe that Burma’s military leaders will seize on the incident to keep her behind bars during what they say will be multi-party elections in 2010.”
Iran elections today Huge turnouts are reported in today’s presidential elections in Iran, where President Mahmoud Ahmadinejad faces a strong challenge from the more moderate former prime minister Mir Hossein Mousavi, after an intense campaign in which the economy was a major issue. Two other candidates are also on the ballot. BBC notes that:
Iran is ruled under a system known as Velayat-e Faqih, or “Rule by the Supreme Jurist”, who is currently Ayatollah Ali Khamenei….
But the constitution also stipulates that the people are the source of power and the country holds phased presidential and parliamentary elections every four years.
War Reports
Pakistan A senior Islamic cleric was killed in Lahore, reports BBC. The suicide bomber attacked Sarfraz Naeemi at the Jaamia Naeemia madrassa around the time of Friday prayers. Naeemi had denounced the Taliban as “un-Islamic” and also denounced suicide bombing
Shredded documents at Gang Strike Force led to Strike Force commander Capt. Chris Omodt’s decision to padlock the doors ahead of schedule yesterday, reports the Strib.
Officers in the Metro Gang Strike Force shredded documents at its headquarters late Wednesday night, hours after the state Commissioner of Public Safety announced plans for an internal investigation after a government audit found that the Strike Force couldn’t account for $18,000 in seized cash and at least 13 vehicles.
After the shredded documents were found in dumpsters and garbage cans at the Strike Force’s Brooklyn Center headquarters, Omodt ordered an immediate closing. In an email obtained by the Strib, Omodt also reported that “someone apparently shut off a computer that records when someone enters the building with a security card,” and that Strike Force members had removed documents and personal property from the building.
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Midnight madness Just moments before midnight, the legislature passed a new tax bill, but it faces certain veto by the governor, MinnPost reports. Governor Tim Pawlenty claimed that he offered a “choice” to DFLers in the legislature, which came down to: you can keep me from making unilateral cuts by agreeing to those cuts, which would make them … not unilateral. Or, as Sen. Tarryl Clark put it: “He left us with two choices. We could do it his way or he would do it his way.’’
In other action during the closing days of the session:
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Governor No: More cuts to health care, education, local government aid In a grueling and emotional session on Sunday, May 17, the House failed to overturn Governor Tim Pawlenty’s veto of its tax and finance omnibus bill, by an 85-49 party-line vote that saw two DFLers defecting to the Republican side. By an 87-47 vote, the House also failed to overturn the Pawlenty line-item veto that ends medical assistance for General Assistance recipients in mid-2010. The prospect: deep cuts in health and human services, education, and local government aid, dictated by the governor to the legislature or unilaterally imposed as unallotments in the year ahead. Full article here
Comic banana relief C’mon folks – you know we all need something to laugh at after the dismal news from Capitol Hill in St. Paul. So here it is — from North Carolina, via BBC:
A US teenager who was thwarted in an attempt to rob an internet cafe armed with a hidden banana ate the “weapon” before he was arrested, police say.
The shop owner and customers overcame the teen, who held the banana under his t-shirt and said it was a gun.
Ash borer week Emerald Ash Borer Awareness Week started yesterday in 16 states, including Minnesota and Wisconsin. Joe Soucheray says Minneosta has 937 million ash trees, or about 179 per person. For more info, photos, advice, and questions, go to the official emerald ash borer site.
Foreclosures up again in April The Calculated Risk blog reports on Realty Trac figures for April, which show an upswing in foreclosures after the end of an informal , voluntary moratorium.
[F]oreclosure filings – default notices, auction sale notices and bank repossessions – were reported on 342,038 U.S. properties during the month, an increase of less than 1 percent from the previous month and an increase of 32 percent from April 2008. The report also shows that one in every 374 U.S. housing units received a foreclosure filing in April, the highest monthly foreclosure rate ever posted since RealtyTrac began issuing its report in January 2005.
In more bad news, good news, bad news, MinnPost reports that home prices fell 14% nationally and 12.9% locally in April, while the Strib reports that home sales were up by 23% — but that the growth came in “lender-mediated” (read foreclosure-related) sales, and that traditional sales fell.
The worst news is reserved for minority and immigrant homeowners, as reported by the Pew Research Center: “The boom-and-bust cycle in the U.S. housing market over the past decade and a half has generated greater gains and larger losses for minority groups than it has for whites.”
Fong Lee trial The PiPress reports that the civil suit against police officers and the city of Minneapolis over the police shooting of 19-year-old Fong Lee in 2006 is set to begin this morning.
World/National Headlines
Robbing pension funds TPM’s Josh Marshall notes that Bush appointee Charles Millard, who headed the Pension Benefits Guaranty Corporation, is under investigation for “a suspicion pattern of communications with big investment houses just before Millard piled tons of [Pension Benefits Guaranty] money into their funds.”
Gay marriage: Bad for business? The latest GOP attack on gay marriage says it’s bad for business, AP reports. GOP chair Michael Steele says gay marriage will hurt business because — horrors! — more people will be eligible for health care coverage. Well, here’s an alternative — maybe we could just have single-payer, national health care coverage? OR —as the Daily Kos suggested later:
And if we want to really polish our fiscally conservative creds, we can outlaw marriage for everyone! Especially heterosexuals! Because they reproduce and add even more more dependents for the rolls of small-business health care programs!
Not the dog again! The Republican National Committee has a new TV ad out criticizing — the presidential puppy. The Daily Kos recalls that this puts Bo in good company, along with FDR’s Fala, also the subject of Republican attacks.
Record time for broken promises The health care industry promise to slow the annual health care spending growth rate? Forget that, reports the Daily Kos. Now the Hospital Association’s executive vice president, Richard J. Pollack denies that any promise was ever made. Daily Kos reprints the signed promise letter.
Congress Party in India The Washington Post reports a big win for India’s ruling Congress Party, and a second term for Prime Minister Manmohan Singh, “a former economist who has championed programs for the poor and pushed for rural development and economic reforms.”
War Report
Sri Lanka BBC reports that the Sri Lanka president declared victory over the Tamil Tiger rebels, although some fighting continues. On Sunday, the NYT reported that the Tigers also acknowledged the war was over, coming to “a bitter end.” By Monday morning, BBC joined other media in reporting that the Tamil Tiger leader, Velupillai Prabhakaran, was dead.
Pakistan BBC reported May 16 that a car bomb in Peshawar killed at least 11 people, and a U.S. drone killed 10 people in the North Waziristan tribal region.
Somalia BBC reports that President Barack Obama’s top official on Africa, Jonnie Carson, expressed concern over possible arms sales by Eritrea to al Shabaab militants in Somalia, and also over reports of Chechen and South Asian fighters in the al Shabaab forces. Eritrean government officials denied the charges. Meanwhile, President Sheikh Sharif Sheikh Ahmed told BBC that he has asked his former ally and Islamist spiritual leader Sheikh Hassan Dahir Aweysto negotiate an end to fighting in Mogadishu, but that the al Shabaab leader refused.
Chad/Sudan BBC: Chad’s government admitted air raids inside Sudan, saying they had destroyed seven groups of mercenaries.
In a grueling and sometimes-tearful session on Sunday, May 17, the House failed to overturn Governor Tim Pawlenty’s veto of its tax and finance omnibus bill, by an 85-49 party-line vote that saw two DFLers defecting to the Republican side. By an 87-47 vote, the House also failed to overturn the Pawlenty line-item veto that ends medical assistance for 30,000 General Assistance recipients in mid-2010. In the Strib, Lori Sturdevant summarized:
DFLers warned that depriving the poor of routine medical care would only cost society more, as those now covered by the vetoed program seek medical care at costly emergency rooms. But money was not the focus of the House debate; morality was. This somber, emotion-laden debate seemed to be about Minnesota’s soul. DFLers invoked Scripture and, in some instances, shed tears as they pleaded with Pawlenty’s fellow Republicans to put politics aside and vote to preserve health care for “the least of these.” They pointed out that the bulk of the program’s beneficiaries suffer from mental illness, chemical dependency, and chronic disorders including diabetes, arthritis and heart disease.
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Governor No No new taxes. No special session. No compromise. That’s essentially the message that Governor Pawlenty delivered with $400 million in line item vetoes and a threat that he will balance the budget by unallotment if the legislature does not agree to his terms. Rachel Stassen Berger’s PiPress blog describes who gets hit by the biggest line item veto:
In signing the Health and Human Services bill the Legislature sent him, he slashed $381 million in funding for General Assistance Medical Care, a health insurance program for adult Minnesotans who don’t have health insurance but may not be eligible or may not yet be approved for other subsidized health care programs.
Health insurance through GAMC is only available to folks who make $650 a month, about $7,800 a year, or less. Many covered under GAMC are homeless. .. (Worth noting: Pawlenty cut the program’s funding only in 2011, which gives the Legislature next year to work with him on finding funding.)
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Mary Turck
News Day 