By Martin Kaste
February 8, 1999
The DFL-controlled Minnesota Senate has passed a $1 billion version of
Governor Ventura's sales tax rebate plan. Senate Republicans tried to defeat
the sales-tax rebate approach, which they call unfair to the state's wealthier
taxpayers. The Republican alternative, rebates based on income taxes, has
already passed in the House. Senate and House negotiators now have
to find a way to reconcile the two plans.
REPUBLICANS HAVE BEEN TRYING TO DAMPEN the political momentum behind Governor
Ventura's sales-tax-rebate plan. Given the Governor's high approval rating,
it's been a challenge, especially now that Senate DFLers have officially
joined forces with the Reform Party Governor on this issue. During floor
debate, DFL Senate Tax Chairman Doug Johnson was not shy about invoking the
The proposal that he brought to the Legislature, and that Senate
Democrats are shepherding through this floor today, speaks to mainstream Minnesota,
speaks to middle-income taxpayers in this state; this is the best approach
with this rebate.
Senate DFLers passed the basic Ventura plan with a few minor changes. It
returns about $1 billion to Minnesota residents, whose checks will
depend largely on statistical tables of how much sales tax they pay. Those
tables are based on taxpayers' income, and Republicans say the plan is just an
income-tax-rebate plan in disguise, except that it uses the sales-tax tables
to shift more money to lower-income people. Senate Republican leader Dick Day
calls it a "grand, socialistic plan, and it cheats wealthier people who pay
higher income tax rates".
What in the world is wrong with giving the billion dollars back to the
people who paid it in? Just one time? Give them a break!
Republicans in both houses have been calling the Ventura plan "Robin Hood
economics", a label embraced by Mankato DFLer John Hottinger.
I don't remember the Robin Hood story real well, but I do remember
who the good guy was. And I do remember who was on the side of the people, and
I remember who the people supported. and it wasn't the Sheriff of Nottingham. It was Robin Hood.
With the Senate now solidly behind the Ventura rebate bill, the Legislature has
to find a way to reconcile two very different plans: his sales-tax rebates
and the income-tax rebate bill passed by the Republican-controlled House last
week. Senate Tax Committee Chairman Johnson says the differences are so great,
he expects the situation requires a summit meeting between House Speaker
Sviggum, Senate Majority Leader Moe and Governor Ventura. Ventura's spokesman,
John Woodele, says that may happen. Some Republicans agree with this scenario, and they say the only way to resolve the stand-off is to come up with a third
way: a completely new tax-rebate plan. Ventura's spokesman, John Woodele,
downplays that possibility.
My guess is the governor would not prefer to start over and come at this
from a completely new way. If the governor and Senate agree on a plan to get
the most money out to the most people, the House ought to take a strong look at
this, and come our way.
In other words, it's two against one. Republicans are well aware of the
situation, but they think they still have a chance to point out some of the
legal weaknesses of Ventura's plan. For one thing, they say the Internal Revenue Service could
tax the rebate as income, possibly billing Minnesotans to the tune of $200 million. DFLers have been amending the sales-tax rebate almost on the
fly; looking for ways to fix technical holes that leave taxpayers out of the
money. Republicans say the whole plan seems jerry-rigged and fiscally
unpredictable. The longer the stalemate between the House and Senate drags out, the
more chance Republicans will have to look for - and exploit - the cracks
in the Ventura plan.
Martin Kaste covers the Capitol for Minnesota Public Radio. You can reach him at firstname.lastname@example.org .