Flaherty most discouraged by what he’s seeing, or not seeing, in Gov. Dayton’s budget plans
Leadership and compromise. Those are the two things that Tim Flaherty of the Coalition of Greater Minnesota Cities says are going to be necessary if common sense, fiscally feasible legislation that benefits not just the Twin Cities metro area but the entire state has any chance of being passed by the state legislature this spring and signed into law by Gov. Mark Dayton.
During a visit to city hall in Crookston Thursday, Flaherty said the CGMC is encouraged by some of what it's seeing transpire in St. Paul, and discouraged by other things, mostly in the form of legislative funding priorities being put forth by Dayton's office.
The huge elephant in the room is transportation. The governor has put forth his 10-year, $1.6 billion plan, the DFL-led Minnesota Senate's plan is $800 million over four years, and the Republican-led Minnesota House's plan is $800 million over 10 years. The CGMC's plan focuses a lot on street projects in cities with populations both below 5,000 – which don't reap the benefits of gas tax revenue – and above 5,000, with a goal of $200 million a year.
Flaherty said the CGMC would fund its transportation plan with some surplus money, some general fund money and some new revenue, which could come from a gas tax increase, but nowhere nearly as large as the 16 percent gas tax increase being put forth in the Senate's proposal. While the Senate's proposal doesn't touch the general fund, the House's proposal dips significantly into the general fund because it proposes no new revenue whatsoever in its transportation funding proposal. Flaherty said the GOP plan of establishing permanent transportation funding is risky, and could quickly turn the state's current $1.9 billion surplus into a deficit.
"I think we've all learned by now that what goes up will come back down eventually," Flaherty said.
He sees the CGMC's transportation plan as a nice middle-of-the-road approach that he thinks would make sense when explained to most average Minnesotans. The CGMC is trying to convince Senate DFLers to spend some general fund money on transportation, and House Republicans to include some new revenue in their plans. But that means Republicans would have to approve a tax increase, which, these days in the tea party-influenced Republican Party, means legislators who approve such a tax increase would be putting their political future at risk. In other words, the chances of a tax increase funding any of the House Republicans' transportation proposal are slim to none.
"The overall picture right now as far as where we're heading this session, I'd say things are going in a bad direction at the Capitol," Flaherty said. "Minnesotans are going to need some leadership and compromise from their elected officials, but if all anyone does is stick to their guns then we're going to have 10 years of gridlock. That's the most likely outcome right now, I believe, and it's the worst outcome for the public."
Other legislative items
During his Crookston visit, Flaherty detailed the status of several other legislative initiatives deemed by the CGMC to be a high priority. The Coalition is asking Greater Minnesota legislators from both parties to insist that the priorities be funded, he said. Dayton's proposals include "little or no funding" for what the CGMC says are "critical Greater Minnesota priorities," Flaherty said.
In all, the CGMC's proposals carry a $250 million price tag in the next budget biennium.
• Local Government Aid: The Coalition is proposing a $45.5 million increase over the next biennium, which would restore LGA levels to 2002 levels, when LGA was reduced significantly. Both the House and Senate are proposing similar increases, but Dayton is proposing no LGA increase.
• Workforce housing, $100 million: It's a huge priority for the CGMC, and would be funded by a combination of grants and tax credits. Both the House and Senate have introduced similar bills.
Metro-area legislators seem to like tax credits for metro-area projects, he said, but when tax credits are proposed for Greater Minnesota housing initiatives, they seem to sour on them, Flaherty said.
But Dayton, who has no money set aside for workforce housing in Greater Minnesota, might be the biggest hurdle, Flaherty said. "He loves funding low-incoming housing in Minneapolis and St. Paul, and we're not saying that's a bad thing, but there needs to be some balance," he said. "It's not that the governor is against us on these things, he's just for other things."
• Job training: The CGMC is proposing $15 million in tax credits or grants, as is both the House and Senate. District 1B State Rep. Deb Kiel of Crookston is carrying the bill in the House. But Dayton's budget proposal contains no money for job training.
Flaherty said the key is not relying on the presence or involvement of a technical college. Too often, if there's no technical college role, legislators simply give up. But DEED launched a pilot program that brought 20 good-paying welding jobs to a business in Deerwood without needing a technical college nearby was a huge success, Flaherty said, and could be replicated in many other cities.
"This would be just a huge opportunity for growth in Greater Minnesota, and it's being stifled," he said. "You'd see job growth, which grows cities, which grows the budget through more tax income."
• Business Development Public Infrastructure (BDPI) Grant program: It would help cities provide public infrastructure for private industry growth in Greater Minnesota. Flaherty said it has a proven track record of success in Minnesota. The CGMC proposes spending $20 million in the program, as does both the House and Senate. Dayton's proposal contains no funding.
"The BDPI must be funded," Flaherty said. "It's a bigger priority that a new St. Paul Saints stadium, I'll tell you that."
• Broadband improvements: The CGMC is seeking $100 million, at least. The Senate includes $100 million, and the House started at $50 million and has since upped broadband investments to $130 million. Dayton has $30 million in his budget proposal.
Flaherty said the numbers don't lie: 40 percent of homes in Greater Minnesota don't meet minimum standards for broadband service. In the metro area, that percentage shrinks to 6.
"We're not saying the state broadband programs don't work, we're just saying there are huge, huge gaps that must be filled if our cities are going to have any chance at growth," Flaherty said.
• Environmental/regulatory reform: The Minnesota Pollution Control Agency is proposing some tougher rules on wastewater and other water treatment practices, and the CGMC and legislators in both legislative houses are asking that the MPCA be subject to more analysis and legislative oversight, which the MPCA is against.
"(The MPCA) needs to be accountable because this is not based on good science, and scientists are saying so," Flaherty said. "These costs that would be put on cities' shoulders would be passed down to constituents and taxpayers, without a doubt.
"We're all for clean water," he continued. "We're just not for wasting money."