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Taxpayers League puts 'fear of God' into lawmakers
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Taxpayers League chief lobbyist David Strom says the group's power lies in its ability to persuade people. (MPR Photo/ Mark Zdechlik)
In just five and a half years, the Taxpayers League of Minnesota has become a major political force in Minnesota. Republican Gov. Tim Pawlenty is one the main supporters of the league and its no-new-taxes theme. Critics, many of them DFLers, accuse the league of misrepresenting the tax debate.

St. Paul, Minn. — Tucked away in a Plymouth office park, David Strom, the Taxpayers League of Minnesota's chief lobbyist, produces, via speaker phone, the organization's latest radio commercial.

It's a 60-second argument for freezing state workers' pay. The announcer reads the script.

"It's just not right to raise taxes to increase salaries for state employees, especially in these hard times. That would mean most of us would take a real pay cut just to give government workers a pay increase. How fair is that?" the ad says.

The wage freeze ad is the latest in a series of commercials the league began running late last summer. In just a half an hour, the spot is produced and ready for the radio.

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Image Comparing income and taxes

Major media polls show a solid majority of Minnesotans believe state lawmakers should avoid increasing taxes. Strom says the Taxpayers League can take credit, in part, for shaping the no-new-taxes sentiment.

"The fact that we've been able to, with the help of the governor, convince the majority of Minnesotans that government is too big, it's time to cut back -- that's the real power that we have -- our ability to persuade people," Strom said.

The Taxpayers League has been trying to influence public opinion since late 1997, when a group of wealthy, conservative and relatively low-profile Republicans formed the non-profit organization.

"It was really long ago and far away," Strom said. "Minnesota was just at the beginning of several years of tax surpluses, and there was a pervasive sense among fiscal conservatives that money was just being squandered. We saw massive increases in the size of government."

The league's mission is simple. It wants smaller, less expensive government and lower taxes. And it aggressively promotes its agenda with commercials, billboards and mass mailings, often singling out political opponents with the ferocity of a pit bull.

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Image Republican Gov. Tim Pawlenty

Technically, the league is nonpartisan. But its affiliated political action committees have spent more than $250,000, almost exclusively on behalf of Republicans. The organization focuses on fiscal matters. But it does not shy away from social issues when there's a financial connection. For example, the league opposed extending health care benefits to state employees' domestic partners.

The league has also been one of the most outspoken opponents of light rail transit. It has also worked against public funding for sports stadiums, and called for the defeat of numerous metro area school referendums.

But the organization is best known for its "no new taxes" contract it asks lawmakers and candidates to sign. During the 2002 elections, 56 elected officials took the league's "taxpayer protection pledge," including the Republican candidate for governor, Tim Pawlenty. The league's pledge played a central role in the election, and Gov. Pawlenty has not wavered from his no new tax commitment.

In addition to Pawlenty, the Taxpayers League claims 12,000 Minnesota supporters. The group is enjoying its highest profile ever. That irks DFL lawmakers, including Senate Tax Committee Chairman Larry Pogemiller.

"I think that the governor is parading around like he's going to be accountable, at the same time that he's joined at the hip with the Taxpayers League," Pogemiller said.

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Image DFL Sen. Dean Johnson

But Gov. Pawlenty defends his relationship with the Taxpayers League.

"I could say the labor union and the DFL are joined at the hip. That's not necessarily a negative comment. It's just that people tend to align with folks who espouse their views," Pawlenty said.

Pawlenty dismisses the notion the Taxpayers League is driving the tax debate. He says the group has a legitimate role in helping shape policy.

"There is a silent or quiet majority in Minnesota that needs a voice. Most Minnesotans don't want their taxes raised, so a group like the Taxpayers League gives a voice to some of those Minnesotans. It helps counter-balance the ... pro-government forces," Pawlenty said.

Accountability and credibility are words that come up often in criticisms of the Taxpayers League.

"I would call them despicable, the way their actions are. It's simply not right," said Sen. Dean Johnson, DFL-Willmar, who chairs the Transportation Committee.

Johnson accuses the Taxpayers League of using information that is misleading and out of context.

"Any group, any person, has the right to organize in the State of Minnesota or in the United States by way of the Constitution. I have no problem with that," Johnson said. "But when you organize and when you participate politically, you have the mandate to tell the truth. And here's where the Taxpayers League has fallen off the table here at the Legislature."

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Image A Taxpayers League supporter

Johnson said the league's advertising falsely implies the roughly $700 million for LRT comes primarily from state taxpayers, and that without light rail, the funds could have been used for more conventional road projects.

"One hundred million dollars came from state bonds. There are some funds that have originated from Hennepin County and from the City of Minneapolis. But predominantly, the majority of the funds have come from the federal government," said Johnson. "There's a competitive basis for cities that are looking at mass transit. Minneapolis went in and they competed and they got a substantial amount of funds."

League officials defend their anti-LRT campaign, insisting there's no reason to make a distinction between state and federal taxpayers.

Johnson and other critics also accuse the league of misrepresenting the projected growth in state spending and the Minnesotans' relative tax burden, particularly in its ad campaigns.

"Almost every ad they have is either false, misleading or greatly exaggerated," said Rep. Barbara Goodwin, DFL-Columbia Heights.

Taxpayers League commercials which ran last fall stated, "Next year, state spending is projected to increase 12 to 16 percent."

But that claim is false. In truth, the state finance department had projected a 14 percent increase in spending over the next two years. Earlier this year, the league changed it ads to reflect the accurate figure.

Still, Goodwin and others says the league is wrong to sound alarm bells about state spending increases without putting the increased costs into context. About half of the projected increased spending is a result of the change in how Minnesota pays for education, now primarily with state tax dollars and not local property tax revenue.

Economist Louis Johnston of St. John's University/College of St. Benedict says like many advocacy groups, the Taxpayers League falls far short of telling the whole story. Johnston says the Taxpayers League misleads the public.

"It's marketing. It's taking statistics and making them look the way you want them to look, and not actually providing context and any kind of dispassionate or nonpartisan, if you will, research about what's really going on. It's just advocacy in the clothing of research," Johnson said.

For example, the league frequently references census data which show Minnesotans pay 38 percent more in state taxes than do average Americans. However, the league fails to note though that Minnesotans also make a lot more money than average Americans -- 25 percent more, according to the same census data.

While Minnesota still ranks in the top 10 among states for total tax collections, the state cut taxes and sent back rebates totaling billions of dollars over the last five years. State tax collections as a percentage of personal income dropped more than five percent from 1997 to 2001, the latest year from which the numbers are available.

DFL Rep. Barbara Goodwin says Minnesotans may get a skewed impression of the tax debate because the Taxpayers League does not discuss those trends.

"I do believe that people have started to believe some of the rhetoric, and that the rhetoric is being passed back to us from people like it's true. I just hope that people will really look into who this group is and really know who they are, before they believe everything they say," Goodwin said.

Former Republican gubernatorial candidate Brian Sullivan got involved with the league shortly after its formation. He says there is nothing clandestine about the league.

"The reason why this league is successful is because of the issue, not something that has been constructed out of a brilliant marketing campaign, or that awfully clever people with a lot of money were able to pull the wool over someone's eyes," Sullivan said.

Sullivan is not required, and is not willing, to make public how much money he's given to the league and its affiliated organizations. But IRS documents provided by the league show in the years 2000 and 2001 alone, Sullivan gave the league's foundation more than $180,000. Sullivan and other league backers say the source of the league's funding is irrelevant.

"People who are critical of the league find they don't get much traction when they take the opposite view, so they seek to change the subject and focus on the fact that some people contribute to it," Sullivan said. "It's a free country. What's good for the goose is good for the gander. Free speech reigns."

The league started small, but it has grown rapidly. In 1997, it began with less than $20,000. Coupled with its foundation, the league hit a fundraising high of nearly $1 million in the year 2000. Last year the league, its foundation and five full-time employees collected almost $850,000 from 2,600 donors.

League critics predict, perhaps even hope, the group's no-new-taxes message will backfire when Minnesotans begin feeling the consequences of budget cutting.

Sen. Dean Johnson and other Democrats say the league's tactics have cost it credibility at the Capitol. Still, for as much as Johnson and other DFL lawmakers dismiss the league, they acknowledge its power.

"They have literally put the fear of God into some legislators," Johnson said.

Taxpayers League lobbyist David Strom is proud of the league's success.

"It's hard to not to be happy with success," Strom said.

Strom is confident that regardless of what some lawmakers might contend, most Minnesotans want a smaller, less costly government.

"What we've been able to do is to get people talking about things in what we think to be the right terms, which is -- how much government can Minnesotans afford?" Strom said.

Some lawmakers from both parties say if the Taxpayers League side prevails in the budget debate, state spending cuts will force local governments to raise taxes. League officials say they may focus next on local government spending.

The league hopes to increase fundraising, so eventually it will have as much as $1.5 million a year to help get out its message.

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