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By Laura McCallum
January 23, 2001
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Gov. Jesse Ventura is proposing a two-year, $27 billion budget that focuses on tax cuts and limited spending. Initial reaction at the Capitol ranged from Republican glee over the size of the tax cuts to DFL concern that there's not enough money for education, transportation and the environment.
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"The ultimate end result is very clearly all Minnesotans will pay less taxes," Ventura said in his budget address.
Ventura wants to return nearly $1 billion to taxpayers in a sales-tax rebate this summer, cut income taxes by a half-percent over the next two years, lower property taxes by having the state pick up a greater share of education funding, and trim the sales-tax rate from 6.5 to 6 percent. At the same time, Ventura would expand the sales tax to cover some services. He told a packed room of legislators, reporters, lobbyists and his cabinet at the Science Museum of Minnesota that the current list of what's taxed and what's not doesn't make sense.
"Care and lodging for horses is exempt from tax, but care and lodging of dogs is taxable. Haircuts for people are exempt from tax, but haircuts for dogs are taxable. Apparently the dogs don't have a very good lobbyist at the Capitol," Ventura said.
But a lot of industries do have good lobbyists at the Capitol, and Ventura noted that many of them are already throwing grenades at the idea of expanding the sales tax. He says legislators who immediately dismiss his proposal are listening more to special interests than taxpayers.
On the spending side, Ventura's budget increases state spending 5.4 percent over the two-year budget period that begins in July. Ventura had said his budget would hold spending to the rate of inflation, and Finance Commissioner Pam Wheelock says 5.4 percent is close to that.
Ventura says it would be easy to add new programs during a time of economic prosperity, but he directed his commissioners to hold the line on spending.
"I gave them specific marching orders. Here's the mindset I want. I want government to do what it does right now, and to do it better, without expanding it any larger. Let's concentrate for two years - a novel concept - two years of simply doing what we deliver now, only deliver it better and more efficiently," Ventura said.
Ventura's budget includes targeted increases in K-12 education funding, higher ed, transportation, health care, criminal justice and economic development. But it goes nowhere near fully funding many of the spending requests in those areas. For example, the Minnesota State Colleges and Universities System is asking for a 22-percent increase, and Ventura is recommending 4.5 percent.
Democrats reacted to the budget by calling for "balance" - shorthand for smaller tax cuts and more spending. DFL Senate Majority Leader Roger Moe of Erskine says the governor's lean budget doesn't appear to address some of the state's unmet needs.
"It shows basically a reduction in general fund in the transportation budget, in the economic development budget, in the environment and natural resource budget. Those are things we are concerned about," Moe said. (Listen to interview)
Republicans, on the other hand, were mostly pleased with Ventura's message. Senate Minority Leader Dick Day of Owatonna says the governor's budget has a Republican look to it, with its emphasis on tax cuts and limited spending growth.
"I think he's got some great ideas in it, and I think our Senate caucus is going to try and do everything we can to get along with him and see if we can implement some of his programs," Day said.
But Gov. Ventura is calling on lawmakers to do more than implement some of his programs. Ventura's plan is a complicated series of interdependent tax changes, and he says the Legislature should pass it in its entirety.
"If I can put it into the perspective of a sweater - if you pull a piece of yarn out of the shoulder of the sweater, there's a chance the arm can fall off. So you have to look at the entire package as a whole, not just pick out individual little spots to pull out yarn at, because if you do that, certainly any sweater will fall apart," he said.
Lawmakers continued the governor's sweater theme in their post-budget comments. DFL House Minority Leader Tom Pugh of South St. Paul says there's little legislative support for a major element of Ventura's plan: extending the sales tax to services.
"Members of my caucus have great concerns about expanding taxes or creating new tax opportunities at a time of surplus. That is the linchpin, that's the sleeve of the sweater that may fall off, to use the governor's words," said Pugh.
House Republicans wouldn't mind pulling another thread out of the sweater - the governor's proposal to cut car tab fees to $75 by 2004.
"The Speaker and I want to tell him, 'Yeah, but if you chop off the other arm, you have a nice vest.' So it doesn't necessarily have to be a one-armed sweater," said Majority Leader Tim Pawlenty of Eagan.
But the chair of the Senate tax committee, Minneapolis DFLer Larry Pogemiller, says his committee will consider Ventura's tax plan as a whole. While he admits it's rare for a governor to get an ambitious tax overhaul passed in its entirety, Pogemiller says it's not unprecedented.
"In 1971, legislators passed the Minnesota Miracle with the leadership of a governor, and that was done across party lines, and I presume it could happen again. If legislators become convinced that this type of overall reform is what's in the best interests of the state for the next century, I think we'll pass this," Pogemiller said.
But Pogemiller says it's too early to tell whether legislators do agree with the governor's vision. Many give Ventura credit for stepping up his selling job in the past few weeks. He's been meeting with lawmakers one-on-one, and will take his plan on the road. Along with his budget, the governor took the unusual step of proposing a $500 million bonding bill. The Legislature traditionally passes a capital projects bill in the non-budget years, but Ventura asked lawmakers to pass a bonding bill this year and adjourn for two years, or he said he'd veto the bonding bill.
The governor has been pushing his idea of a single legislative session every two years, but when asked about it later, Ventura didn't seem as insistent about getting the bonding bill passed this year.
"If they don't do it all and sine die, then forget the capital budget, they can come back the following year and do it. When they're supposed to anyway, according to the rules and they way it's set up right now," Ventura said.
Legislative leaders say they'll consider the governor's bonding bill in the spirit in which he made his comments. They made no promises.
Laura McCallum covers the Capitol for Minnesota Public Radio. Reach her via e-mail at lmccallum@mpr.org.
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