Governor Mark Dayton applauding the audience for their participation. (Photo by J. Lee)
By J. LEE
AAP staff writer
ST. PAUL — The first Democratic-Farm-Labor Governor since 1991, Governor Mark Dayton must also come to agreements with Minnesota’s first all Republican House and all Republican Senate.
Like the wise King Solomon heading the “Knights of the Roundtable”, Governor Dayton took on the challenge of balancing an estimated $3 billion dollar budget deficit left for him and his administration to fix. Five months into his first year, the legislative session ended with a $5 billion deficit, catapulting the government into a shutdown which set the record as the longest in the nation.
Agreement is needed by the House, the Senate, and the Governor for any solution to “balance the budget.” The House and Senate previously rejected about 7 proposals made by Governor Dayton. The agreement to end the shutdown included taking the tobacco settlement funds from programs and delaying payment to the schools.
Deferring payment to schools was previously used by Governor Tim Pawlenty, but it forces cities and counties to raise property taxes. In the current economic crisis, counties were also lowering property values.
Some homeowners and property owners had a 20 to 50 percent drop in property value while the net effect was increased taxes by over 60 percent for some owners. Tenants absorb the increase in paying the rising rental costs.
A few months after the shutdown ended and with a “touch of magic” – Governor Dayton and his administration created a $800m surplus, mostly from cuts in Human Services. Many entities are standing in line for a piece of the surplus funds. But if the surplus was used to offset what was taken from the tobacco funds and schools, the State would still be in a deficit position.
With the economy in turmoil from ripple effects of the various big corporate fraud cases, stock market crashes, the auto and banking industries needing “bail-outs”, and resulting and ongoing job losses and foreclosure crisis – real changes and reforms were needed at the State and Federal levels.
Where Governor Mark Dayton deviated from prior Governors was his review of the issues, getting to the root causes, and coming up with some uncommon solutions including interacting with and involving the people. This was demonstrated when he diffused the opposition to the healthcare bill which was the first bill he signed by giving opponents equal opportunity to speak and welcoming them into the Governor’s reception room stating the room “belonged to the People.”
Governor Dayton’s amazing and new type of leadership was also exhibited in his outreach to the community to help them, address their issues, and encourage participation in the process towards solutions. With the economy and jobs a major concern of the people, Governor Dayton held a series of regional economic forums where he and his Commissioners listened to the people.
He’s also been the first Governor who always applauds other people. The Governor’s first forum was packed with many people standing. Governor Dayton gave up his seat so the average person could sit. Dept. of Employment & Economic Development (DEED) Commissioner Mark Phillips, Dept. of Transportation (MNDOT) Commissioner Tom Sorel, Dept. of Education (MDE) Commissioner Brenda Cassellius, Dept. of Higher Education (DHE) Commissioner Sheila Wright, and Dept. of Administration Commissioner Spencer Cronk followed his lead in giving their seats to others.
Although people left before the end, Governor Dayton and his Commissioners stayed until everyone who wanted to say something – did.
The Governor’s Cabinet of Commissioners and Lt. Governor were deeply involved in the summary gathering called the Governor’s Job Summit. Joining the other Commissioners were Dept. of Commerce Commissioner Michael Rothman, Dept. of Human Services Commissioner Lucinda Jesson, Dept. of Health Commissioner Ed Ehlinger, Dept. of Revenue Commissioner Myron Frans, Dept. of Human Rights Commissioner Kevin Lindsey.
Focus was on methods to support businesses and jobs as they related to their different agencies. Topics and information included: businesses needing access to capital, energy efficiency, worker skills and training, technology and innovation, lowering government and health-care costs, marketing Minnesota companies, employment disparities, job creation, reduced business taxes, exports, global competition, economic development, and infrastructure projects.
Each agency has information on the issues, recommendations, and work in process towards the solutions. Pre-selected panelists got their priorities covered, but the departments are open to input of others.
Directory of agency numbers and personnel are listed at http://www.state.mn.us . Asian Pacific American Housing Consortium representative Jean Lee asked for DEED’s support of API organizations, companies, and people in proposed solutions that were needed including better use of funds in job creation, but the process still has a lot of “red tape.”
More organizations, companies and people need to participate where multi-million dollar and major corporations have more clout in getting pass the barriers. For example, DEED’s recent “free” education and training session on exports was one small step towards the solutions.
At a meeting of the Opportunity Finance Network and Minnesota Association of Professional County Economic Developers, Commission Mark Phillips boiled the Governor Dayton and his Cabinet’s efforts down to a “7 Point Action Plan” which he said will be on DEED’s website: Access to Capital; aligning education to jobs now and in the future; streamlining government regulations; investing in infrastructure; government reform; increasing export and foreign investment in Minnesota; closing the education achievement gap.
Towards solutions to “access to capital” by businesses, Governor Dayton recently authorized $100 million in new loan funds for small businesses. With borrowed funds, companies are expected to generate revenue, add jobs and increase taxes received by the State.
In “tax reform”, businesses are becoming more like “nonprofits” with the tax reductions proposed. The deregulation businesses seek, raises complex problems including consumer safety issues.
On the other hand, loans are a risk to nonprofits because nonprofits generate less income or no income for a service than “for-profits.” But as grants to nonprofits are being reduced or cut, grantors are expecting nonprofits to act like “for-profits” in generating revenue and adding jobs.
The problems become more complex if nonprofits pay taxes as some people proposed. Grantors and donors would not be able to take tax deductions and without that revenue – nonprofits would have to charge as “for-profits”, become “for-profits”, people have to pay more thereby needing higher salaries, prices have to increase to cover these costs, and the cycle continues.
On the opposite end, people who can’t pay the higher prices or don’t have jobs to cover costs – go through an increasingly worst cycle with broad and complex impact than is happening in the ongoing economic crisis.
Dept. of Education Assistant Commissioner Rose Chu, Concordia University College of Business Dean Bruce Corrie, and Rani Engineering owner Susan Rani gave formal input in the Summit sessions. Susan Rani spoke of her participation in the Governor’s Trade Mission to South Korea to expand Minnesota exports to Korea.
A Korean immigrant who started her business with credit cards at their higher rate of interest, Susan said it’s been paid off, she has access to other capital, and she’s recruiting more engineers now. Her company worked on the I-35 Bridge, the Hiawatha Light Rail, and Central Corridor Light Rail, and the Weisman Art Museum expansion.
Governor Dayton has opened more opportunity for dialogue with Minnesotans through The Office of the Governor Blog is http://mn.gov/governor/blog, his “Idea Center”, Facebook, Twitter and other social networks in his efforts to build “A Better Minnesota” with others. Sign-up for the Governor’s newsletter is http://tinyurl.com/3nuya4z, or on the Governor’s website www.MN.Gov/governor.