The numbers of the 2024 February Revenue Forecast provide a favorable outcome for the Governor Tim Walz (DFL-MN) Administration. As stated in the summary on the MMB website, “Minnesota’s budget and economic outlook has improved since November. The 2024-25 biennium is now projected to end with a surplus of $3.715 billion, an increase of $1.324 billion compared to November projections. The near-term economic outlook has improved, with growth expected to persist through 2027. Higher collections so far this fiscal year raise the current biennium forecast for all major tax types. Corporate tax revenue shows the largest change, driven by higher-than-expected corporate profits through the forecast horizon. Spending estimates are largely unchanged from November. The higher revenue forecast throughout the FY 2024-27 planning horizon results in improvement to the structural budgetary balance, but spending is still projected to exceed revenue through FY 2027.”
As the headline in Governing Magazine states, “Minnesota Officials Urge Fiscal Caution Despite $3.7B Surplus.”
This means there is no need for any dramatic course correction, and as Walz said himself, “We will continue to follow our focus.” The projections largely support a structural balance, with some apprehension for the out years. This note of caution, is warranted because the economic outlook is somewhat tenuous, because of Vladimir Putin’s War on Ukraine and the Israeli conflict in Gaza, as well as the questions over the our nations relationship with China. It is global affairs which provide the variables in the nation’s economy, but here in Minnesota, where we regularly outpace the bulk of other state’s economically, in fact, Walz called attention to Minnesota’s leap ahead of Texas, which waas first called attention in July of 2023, Minnesota ranked as a top state for businesses, surpasses Texas.
What seems to be the worthy conclusion is the $3.7 billion surplus is on the bottom line a result of stable spending. The feature that undermines the criticism of the Republican rhetoric is Corporate Taxes are at an all time high. Walz in noting the factors that led to this economic benefit acknowledged his “incredible partners” (the DFL controlled legislature) and the positive policy positions along with the funding mechanisms put in place.
He placed focus of this legislative session as “Rebuilding Infrastructure and the changing in the budget as proving, “more space for bonding.” He also conveyed his intent to provide a supplemental “spending budget in a couple of weeks,” and also said, “we will stay close to the numbers we have now.”
Traditionally, we would ask our standard question about the state’s debt capacity, an due to an issue with the Governor’s staff we decided to forgo this, but we secured the information later from the department and received the Debt Capacity Forecast.
Here we will highlight the state’s guidelines:
1. Total tax-supported principal outstanding is 3.25% or less of total state personal income.
2. Total amount of principal (both issued, and authorized but unissued) for state general obligations, state moral obligations, equipment capital leases, and real estate capital leases are not to exceed 6% of state personal income.
3. 40% of general obligation debt is due within five years and 70% within ten years, if consistent with the useful life of the financed assets and/or market conditions.
Specifically, regarding capital investment with the $980 million for bonding as the upper-bound, the actually bond sale, could be even more beneficial if the interest rates begin to fall and in effect become a recognized vehicle for job growth.
We gleaned to themes from this press conference, which were a continuation of the idea of Minnesota being “The Best Place to Raise a Child” which is dovetailed with the Explore Minnesota tourism campaign, “Star of the North“.
One other factor Walz called attention to was the Alabama Invertro Fertilization decision and how Minnesota was likely to use this a way to differential our state from others.
As the legislative leaders took their turn, House Speaker Melissa Hortman (DFL-34B, Brooklyn Park) and new Senate Majority Leader Erin Murphy (DFL-65, St Paul) enthusiastic supporters of the stability of our state’s financial future and Hortman emphasized the legislative work saying, “We will continue to work on cutting costs in child care, housing and in health care.” She further stated her caucus will prioritize workers because “workers are the key to a long-term stable economy,” further saying “Minnesota workers outpace the nation in terms of their productivity…and they are our priority at the legislature.”
She also let the room know that they had a nickname for the Governor’s Cabinet Room, called “Hotel California.”
In her comments, Murphy referred to the economic outlook as a “Durable Budget,” and lauded the senate work the upper body applied to the legislative work.
In the Question and Answer segment of the presser, Hortman was asked about the fact with 53 members of her caucus being new and thus having no experience being in the minority if they were likely to effectively overreach? She acknowledged, the relative institutional “youthfulness of her caucus” but gave no indication she lacked faith in their collective mindset.
Later, a question was asked about whether MN Care should have a opublic option, and Murphy, a nurse fielded that question, saying, “People have coverage, but can’t afford their care.”
The question delved into tax rates and Hortman spoke of how the entirety of the state benefited from the dispensation of LGA (Local Government Aid) and CPA (County Public Aid). She also commented about the in migration to Minnesota in result of the Dobbs decision, IVF decision and the state of abortion politics in general.
The Republican Response
In general, when we heard the opening remarks from House Minority Leader Lisa Demuth (R-13A, Cold Spring) it was a d`eja’vu moment as a blast to the past, with the rhetoric of tax and spend Democrats leading into a Boom and Bust Economy. To which we will say, no that was the tax cuts of the Jesse Ventura Administration and the following Tim Pawlenty Administration that saw perpetual deficits. What is more applicable to a Boom and Bust Economy than that?
Her conjecture of the pending structural deficit due to an expenditure of $1.5 Billion than the statew would be taking in also expects a poorer performing economy, of which Minnesota has proven just the opposite.
Senate Minority Leader Mark Johnson (R-01, East Grand Forks) echoed Demuth’s thoughts but offered up nothing more in the way of anything novel or unique. It felt like a Back to the Future experience.
Thursday at 8:30 am, the media will learn the final amount projected for the remainder of the 2024-25 Budget. Back on December 6th, the amount projected was $2.4 billion, which was up $808 million from the end-of-session estimate, hence a surplus. The Governor and the legislative leaders will learn the figures earlier in the morning.
This will set the table for how much additional spending room is available, while certain voices are applying an amount of caution. MMB Commissioner Budget Erin Campbell warned of a “significant structural imbalance” but would not go as far as labeling the economic picture post 2025 as a deficit. Right now, our state is flush and setting a spending pace few other states can match.
Last session, they expended nearly all of the $17.5 billion surplus, of which $12 billion was from monies left unspent by the legislature, a sizable amount of onetime money $6 million, emanating from the federal government for COVID costs, due to a lack of a global agreement between the Senate Majority held by Republicans and the House Majority controlled by the DFL. It was clear to all capitol observers, the GOP was banking on their “trifecta” a running of the table will the governorship and the two legislative branches being in their column. Problem was it didn’t happen and in fact it went the other way giving the DFL universal authority with its own trifecta.
We will not be surprised to see a larger rise in the projected surplus, and even a softening of the money seen in the out years, but if our state is navigating the political landscape well, and Donald J Trump (R) fails in his return bid to the White House our national economy will continue to improve and the entirety of President Joe Biden’s (D) agenda will be fully implemented. The lynch-pin being whether or not the US House remains in Republican control.
Yesterday, the State Capitol saw a descent of Emergency Medical Services (EMS) providers and Future Farmers of America (FFA) students. The issues in the EMS community are quite significant and the pressures on the system especially in Greater Minnesota are rather acute. The questions largely emanate from the differential in compensation rates.
The realities are, the transportation and medical treatment services are more costly in Greater Minnesota than in the 7-county metropolitan area. While the population is declining, and the juxtaposition of the FFA being in St Paul on the same day is interesting, because there are always questions about whether you can keep the kids on the farm, or when they go off to college will they ever return? Because of the population reductions, all services in Greater Minnesota become higher cost with fewer people with which to spread the burden.
This is becoming a common sung from hymnal. Last legislative session, when testimony before the Senate Capital Investment Committee occurred and rural leaders called for state support for clean potable water and municipal water treatment facilities the question was repeatedly asked by Chair Sandy Pappas (DFL-65-St Paul) whether the petitioners communities had the ability to meet the 50/50 local match, and each and everyone of the answers were “No”. We will reiterate, the ongoing water problem in greater Minnesota is cause not by non-site based pollution, that is BS it is caused by the use of petrochemical fertilizers, pesticides, and herbicides. But he problem is it isn’t isolated in Greater Minnesota, because it effects the creeks, streams and rivers and ends up effecting all of our water.
As services continue to become more costly, are consolidated or eliminated, it begs the question of what the state response should be.
This might be time to consider a Minnesota Miracle approach and set a minimum of services that are available within a set distance from a county seat, city or town of a certain defined size and consolidate the monies collected for taxes and fees and ensure a specific portion remains in those jurisdictions.
The stronger our rural communities are the more robust our state’s economy is. The ability to embody the Jeffersonian Democracy, where the bucolic lifestyle is fully-embraced is an attribute to the diversity of our state. This is one of the reasons, success in Minnesota is defined by whether or not your family owns a cabin “Up North”.
In 2020, when US Senators Amy Klobuchar (D-MN) and Tina Smith (D-MN) announced the securing of money for rural broadband, the future of life in greater Minnesota looked more promising, and relates to the story above regard the various service needs and challenges in meeting them. The issue over rural broadband continues to be an issue because of the lack of competitive service providers.
We have viewed this issue for years and seen very little movement in resolving it. Although, there always has been a viable answer which emanates from the Emergency Medical Services system (EMS). If municipalities were to be allowed to build their own broadband network off of their EMS the infrastructure, which is already present and has the reach across the entirety of Greater Minnesota, the connections can be made faster. This approach, will also ensure the money stays in the community rather than dispensed to and reliant on the profitability of the local cable contract or cell phone system, which is just another out-of-state corporation.
We are not surprised to hear about the continuing problems in compensation with drivers for Uber/Lyft, especially when that legislation was the only piece vetoed by Governor Tim Walz in 2023.
In 2019, our publisher Shawn Towle was involved with a local start-up company Corbata, which was intent on competing with Uber and Lyft in the ride share market. Corbata had a unique approach, they were offering a Transactional Interactive Exchange (TIE) as their platform, rather than a Uber/Lyft as Transportation Network Company (TNC). This meant the rider and the driver negotiated the pricing independently and not the company providing the access point.
In advance of the pandemic, California was considering legislation to require all ride sharing services that set the rates to provide a minimum wage, a benefit package including health care, insurance and additional safety concerns. This was later overturned by a statewide referendum, in which users were manipulated into believing the services would go away.
This do as we say or were leaving approach, is merely a bluff and one the state should call. Why because as soon as Uber/Lyft announce their departure, then other entrepreneurial companies like Corbata will spring into action. There are other service providers too, yes, taxicabs still exist and those in the iHail network are far more responsive than before the existence of ride sharing services. In Washington DC there are Via, Gett and Juno.
One thing worth noting is Uber is a four-letter word and so is Lyft.
It is interesting to learn about Minneapolis City Council Member Aisha Chughtai (Socialist, Mpls-W10) and Saint Paul City Council Member Mitra Jalali (Socialist, Ward-04) are calling for attendees to the DFL Caucuses to vote Uncommitted, rather than vote for Dean Phillips (D) or Robert Kennedy Jr. This might seem like a worthy strategy in Michigan, but it will have as much success as a flatus in a wind tunnel here.
The impact of this move might have value in Michigan where it is being offered by Rep Rashida Tlaib (D-MI12), and where there is a sizable Palestinian community over 145,000 strong, but not even Rep Ilhan Omar (D-MN05) another of the Squad sisters is doing so in our state. This move falls under our favorite term as a feckless maneuver.
For the record, we do not recognize the term Democratic-Socialist as nothing more than an opportunistic term. In fact during the last election cycle we corresponded with Attorney General Keith Ellison (D-MN) about he and his son, Minneapolis City Council Member Jeremiah Ellison’s (DFL, Mpls-05) relationship with the Democratic Socialists Party, which had endorsed Ellison the Younger. When we asked Ellison the Elder he said, “I am only a member of one political party and that is the Democratic Farmer-Labor Party.”
One issue Checks & Balances played a pivotal role in was the legislation entitled “A Safe Place for Newborns”. As the legislation, met with fits and starts in the final instance what we said we thought was logical and worthwhile was what the compromise became.
Back in the 2000 legislative session, Jesse Ventura (RP) was governor, the House controlled by Republicans, and the Senate by the DFL. In this divided government, it generally became a reality if two sides could coalesce then they generally carried the day.
When we were reading through some of the new bills this session we saw HF3873/SF4131 described as A Safe Place for Newborns provisions modifications authored by Rep Paul Novotny (R-30B, Elk River) and Sen John Hoffman.(DFL-34, Champlin).
We thought since the authorship was from those of opposite parties the items we wrote when the legislation was forming might help to inform the lawmakers as they consider whatever provisions that now require modifications.
03/02/2000 What the 2000 Session All Comes Down To
03/03/2000 Stealing a Good Idea
04/04/2000 Politics is the Art of Compromise
We would like to note as the legislative session opens, Minnesota’s first digital political magazine, Checks & Balances enters its 34 legislative session and is experiencing its 35th year of existence. Our site is the location of the first paid political advertisement and it was written about in Wired Magazine September 26, 1997 in the following article.This Mondale Comes in First.
We have led in many ways, will scoops of the traditional press, before Twitter, and providing angles on legislation others rarely consider. As a publication with vision, Checks & Balances is only as old as it’s recorded but is always recording the history of political event and occurrences.
In 2013, the DFL held Majority in both bodies of the legislature and in 2014, the voters punished them and set the House to the Minority. House members like to say it was caused by the building of the state Senate Office Building, but no you’re wrong. It was the backlash against Gay Marriage and the blocking of the Constitutional Amendment was not the green light to go further. If the legislature had waited the State Supreme Court would have done the same, but no the impulsiveness of legislators to be trend setters cost them the majority.
Last week, Sen Omar Fateh (DFL-62-Minneapolis) and Rep Sandra Feist (DFL-39B, New Brighton) called for Minnesota to be a sanctuary state for undocumented immigrants. Great idea, except what do average people see, oh look there goes the DFL helping people that aren’t even from here and not Me, where is My tax cut, where is my free government check or even worse, look they’re willing to help people who have done nothing here in this country instead of the Veterans who fought and gave us our rights and privileges. Also, you may be politically correct and call them undocumented when out side of your Ivory towner people say Illegal Immigrants.
Of course, the legislature has not done a great deal to privilege veterans ahead of others. There is a housing program called the Community Homeownership Investment Fund which is administered by the Housing Finance Agency and veterans with lower incomes are eligible for support as are anyone including veteran targeted builders, but not one veteran owned housing unit has been built from the fund. However, there is a bill to fund a similar program that is veterans specific called the Veterans Homeownership Investment Fund HF2593/SF2601, which can do the same job.
The DFL should do something dramatic and help veterans who are normally Republican voters. It is a worthwhile effort and gives back to those who provided for you. It sends a far better message. Because if veterans support were the highlight of the Bonding Bill then Republicans will be hard pressed to vote against it, because they will have to defend against this with voters in the election. Also, if it is made a cash bill first then in 2025, after the election they can reallocate and fund the same effort with a Bonding Bill if the projects still remain unfunded or even underfunded.
So fund HF2592/SF2602 and make it a feature of where the DFL places its emphasis and prove that veterans matter. Because this legislation is in support of the only organization focused on veteran’s homeownership, and also a revenue source for rental housing for other veterans in need. The housing community needs to understand there is more support in the general public for veterans than any other group, and if you help a veteran first and finance new construction, it removes the pressures existing veterans put on the housing system.
Now, everyone likes to get out of the cold in the winter, but is this really even winter? The idea of getting on a warm train or bus is always sought, but not to smoke your shit. To us its clear, the Fentanyl problem in the urban setting case be addressed best through–now you wouldn’t think so, it is through Metro Transit can best address its urban Fentanyl problem directly.
Every day, you can see them, it’s the Fentanyl Zombies, who are congregating at the Blue Line stop on 46th Street in Minneapolis, and of course they are weaning themselves out at the Lake Street stop, one because there is security, but security has no law enforcement authority so its feckless like nipples on a boar. In St Paul, it’s even worse. the Fentanyl Zombies are more adapted. Its like the slow versus the fast zombies in horror film. They congregate smoke up and to share information on the best stores to steal from and how to do it.
Some seem functional and lucid, but others are leaning over like their sitting upright in a fetal position and rocking back and forth. They can easily be found and since they are there law enforcement should do their jobs and arrest them. The substance is illicit and the consumer is an addict who needs to have the shock of incarceration and then treatment forced upon them. They are unproductive in our society and a threat to the entire ecosystem.
We have asked this question and clearly told Metro Transit Commissioner Charlie Zelle the following before by asking, “Why hasn’t Metro Transit put all their people in plain clothes and wipeout this problem?” They have law enforcement abilities and honestly, in the last week, we haven’t seen a single, make that zero Metro Transit cops in St Paul over the course of six days. Where are they? We did hear one directed by a Metro Transit train operator pointing the cops to the middle car because he told them the guy holding the door was in a black jacket.
The lack of St Paul support is not surprising because we understand in a recent meeting Met Transit Police Chief Ernest Morales III effectively said so. Since we weren’t there, we were told Morales said, because of the shortage in force the Blue line in Minneapolis was the priority not the Green line in Saint Paul.
Now, since we know hunting techniques, these are like shooting fish in a barrel, why because they gather together to share a smoke of poison. They are the underbelly of our society and if not address aggressively they are the next lost generation. It is a tapestry of people, Somalis, Whites, other Blacks, Asians, and mixed races. This need direct attention and we have given you the direction. So, Chief Morales get off your ass and do as you are TOWLED.
National and Minnesota Report Yesterday, articles in the New York Times and the Washington Post spelled good news for the former Vice-President Joe Biden’s campaign (D). https://www.nytimes.com/2020/06/25/upshot/poll-2020-biden-battlegrounds.html...
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