MPR: Ventura Proposes Budget

Ventura Proposes Budget
By Martin Kaste
January 29, 1999

Part of MPR's budget series

Governor Ventura says he's struck a good balance between tax relief and spending in his budget for 2000 and 2001. On January 28, the Governor laid out his spending plan for legislators and the media.

STARTING ALMOST THE DAY after he was elected, Jesse Ventura has been overseeing the writing of a two-year, $23 billion spending plan; never before has he had to tackle this kind of monumental policy job, but he says he's proud of his first attempt.

Ventura: I know that I can go home and look in the mirror and I know that I did a darn good job putting it together.

The Governor says his guiding philosophy in writing this budget was to provide tax relief, while at the same time increasing spending on education and a few social programs, but always with an eye for efficiencies in the way government does its work.

In satisfying his first goal - tax relief - Ventura is focusing the benefits on the lower and middle classes. He cut the income tax rate on only the lowest tax bracket. He also widened the bracket, meaning a middle-class family will get the low rate on a bigger portion of their income, and he makes it easier for people to stay in the lower bracket when they file jointly, which lessens the effect some people call the "marriage penalty." Ventura estimates a typical family earning $70,000 save $413 a year.

There's more money, almost $1.1 billion, in Ventura's sales tax rebate proposal. That's a one-time money refunding part of the budget surplus, but Ventura says he'd like the state to make the rebates a biennial tradition, sending checks back to taxpayers every time the state ends up taking in more money that it spends.

Perhaps the most crowd-pleasing portion of Ventura's tax-relief package is the cap on auto registration fees; at least, it'll please people who drive expensive cars.

Ventura: I find it grossly unfair that one car pays more than another car when they all drive the same.

Under current law, people pay roughly 1.25 percent of their car's value every year when they renew their tabs, and if you drive something like the Governor's Porsche, that bill can run into the hundreds of dollars. Ventura wants to keep that sliding scale on brand-new cars, but license tab renewals would be capped at $75.

Ventura's budget does give short shrift to at least one kind of tax break: In the last months, political support as been growing for property tax relief for farmers who've endured crop failures and low commodity prices. Ventura sets aside $10 million for ag tax relief, but that's a pittance compared to the $80 million proposed by the fiscally conservative House Republicans. Ventura says he knows some farmers need help, but he doesn't believe they all do.

Ventura: Under some of the proposals now, I would benefit. On my farm. And I can tell you honestly that I don't need it. Don't laugh, it's my wife's business, and she's barely breaking even, but we do not need the help.

Depending how you count things, the single biggest item in Ventura's budget is neither a tax break nor a spending item: He takes $1.3 billion of the state's tobacco settlement and takes it out of play. He wants to set that money aside in special endowments, in much the same way former Attorney General and DFL gubernatorial candidate Skip Humphrey was hoping the money would be used.

Ventura: We need to invest in health for the future - Yes, we could give it back in a rebate, everybody would get 150-160 bucks, and where would it be from there? I think we could be smarter spenders than that, where we can invest in the state of Minnesota as a whole.

Ventura wants the money divvied up into four endowment funds, dedicated to medical research, public health, and social programs. One of the funds, something called the "Minnesota Families Foundation," would be completely new, and would draw almost half the money. Ventura is vague about how that foundation would operate, but he says its purpose would be to create programs to wean people from reliance on government - for example, to help welfare recipients retrain for new jobs. That fund may be the most controversial, given its size and the fact that it's not related to smoking or public health. The Governor points out that these funds are endowments, and that the state will spend only the interest they generate. And he says the state can always change its mind.

Ventura: The principal will always be there, so decisions can always be made five, ten years down the road, whether it's working or not.

The sheer size of the tobacco endowments bother House Republicans, who want to maximize the tax rebates they'll get to send back to Minnesotans this year. House Ways and Means chairman Dave Bishop says he thinks the state has no business putting this much money into what he calls a "health bank."

Bishop: The problem I have with this proposal is that it doesn't square with the facts of how much money we actually have, and it doesn't square with Governor Ventura's statements that he doesn't want the state to keep accumulating extra surplus money from the citizens. He's doing it!

Bishop suspects the tobacco endowments are just a back-door way of putting more of the surplus into rainy-day funds, even though the state already has a $1 billion tucked away. Ventura's financial prudence, his fear of shortfalls in the event of bad economic times, reminds House Republicans a little bit of Arne Carlson, a Governor who always put the state's financial security ahead of tax cuts.

But the Republicans seem most disturbed about how Ventura's budget seems to bring smiles to the faces of Democrats. House DFL leader Tom Pugh approves of Ventura's proposal to increase spending on K-12 and higher education by $800 million, and he even sees his income tax cut as a positive.

Pugh: We'd prefer to focus on property taxes and sales taxes, but if we were to devise an income tax cut, we'd devise one very much like the one he's put out!

David Strom of the conservative Taxpayers League of Minnesota agrees that the Ventura budget leans toward the DFL, a situation he calls outrageous.

Strom: I mean, this is a man who campaigned on giving 100 percent of the last surplus. He didn't do that, saying "I'm sorry, it's not there anymore, but I'll give you the next one back." Now the next surplus comes along at $1.8 billion and he says, "I'll give you two-thirds of how I define that, after I take certain things off budget. I'm going to give you lower taxes and less government," and then he turns around and increases spending at double the rate of inflation. I mean, Skip Humphrey would have come up with a budget more conservative than this!

Ventura's allies dismiss the idea that he's leaning one way or the other, politically. Dean Barkley, the Governor's Director of Planning and a leader of the Reform Party, gets upset at the very notion that this is a Democratic budget.

Barkley: The size of government is shrinking in relationship with the rest of the world! It's the first time we've had just an inflationary increase in 40 years. So how can you say Democrat?! If it's because we're spending money on kids, then we're guilty! Are we living within our means and shrinking the size of government in relation to the rest of the world? Yes we are!

And Barkley says Ventura's next budget is likely to be leaner, once he has more time to explore the dark nooks and crannies of state government in search of waste and inefficiency.

Still, Republicans are beginning to play the role of Governor Ventura's political rivals at the state capitol. As Democrats embrace most of his budget, Speaker Sviggum and Republicans are beginning to abandon the niceties of tri-partite cooperation that everyone was looking forward to just a few weeks ago. Very tentatively, they're beginning to return to good old-fashioned politics: at a Republican news conference about the Ventura budget, Sviggum passed out photocopies of an old Ventura campaign pledge to give all the budget surplus money back. Politely but firmly, Sviggum pointed out that's not what the Governor is doing in this budget.

Martin Kaste covers the Capitol for Minnesota Public Radio. You can reach him at mkaste@mpr.org.

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