Thursday, July 14, 2011

Who won?

Thursday, the great Minnesota Shutdown went from intractable to settled with dizzying speed. Mark Dayton's morning presentation at the Humphrey Institute became an announcement of his acceptance of a June 30th offer from Republican leaders. The $1.4 billion dollar package of shifts and tobacco revenue bonds, coupled with demands for removal of policy changes contained in the GOP budget bill, agreement not to seek a 15% across the board cut of state employees, and a $500 million bonding bill became the framework for a compromise. By 5:15 PM, a deal was struck.

It was oddly anticlimactic to watch Speaker Zellers and Majority Leader Koch announcing that they had an agreement with Governor Dayton. Dayton's offer was effectively one the GOP couldn't refuse, even if they wanted to. It was a definitive end to an impasse that transformed Minnesota into a synecdoche for national budget woes. Twenty-two thousand laid off state employees, shuttered state parks, and a downgrade to the state's credit rating were all part of the mounting toll. In one stroke, Dayton ended that.

A lot of folks on the left have been and will be critical of this decision. Instant reaction from a number of DFL legislators was strongly negative, though minority leader Paul Thissen reportedly said that he'd support it. The smart money is that very few DFL votes will be cast for the budget compromise. Many left-leaning pundits took Dayton to task for caving to the GOP. Indeed, by the evening that was the GOP's talking point, with Michael Brodkorb posting a sheet of headlines that Dayton had conceded or lost.

While it chafes for Dayton supporters to watch, this bravado is mostly for the Republican base. Check out the sources for the headlines in Brodkorb's piece; National Review, Powerline, True North, Drudge, and the lead quote from Rush Limbaugh. This is not a piece for the general public, it's for the right wing base. Or consider this piece from House Republicans claiming that they've held state spending to $34 billion. That might come as a surprise to House Speaker Kurt Zellers, considering he "said the agreement will spend more than the $34 billion Republicans wanted to spend." Remember, Dayton won his budget. The revenue comes in the only form the GOP would permit, borrowing and shifting. As Dayton said - he'll own the budget, but not the revenue.

There are a lot of members of the GOP caucus that have made a lot of noise about cutting state spending. This compromise will be hard to swallow, especially as the pet policy provisions of GOP members are excised. Rep. Garofolo will howl about the removal of private school vouchers and curtailment of teacher's organizing rights. Sen. Hann will lecture disapprovingly as his plan to voucherize MinnesotaCare disappears. Rep. Banaian will cluck, as he did on MPR this morning, about the loss of his budgeting provisions. Rep. Runbeck's vendetta against Minneapolis, St. Paul and Duluth is shelved. And Rep. Downey's corporate consultant crusade against state employees will have to wait until later. Stopping a tax increase will seem like cold comfort for Republican true believers.

This assumes, of course, that "no policy provisions" means what it says. The details of an agreement will be painstaking on some of the larger bills, and it's worth watching what makes it into a final version. But it represents a big win for Mark Dayton on many fronts.

Dayton is taking the long game on the budget. The resolution insulates folks from the full brunt of cuts to health care and increased property taxes from local government aid cuts. The $500 million or so in bonding projects will stimulate the construction industry and the economy, and it seems that a $1 billion Vikings stadium will likely follow. This will put literally thousands of folks back to work. For a governor in the mold of Rudy Perpich, this is exactly what he wanted.

It's true that both sides shared in the blame for the shutdown, but Dayton's well-positioned to get credit for decisively ending it. Republicans will be saddled in 2012 with a broken promise to their base and an intransigent reputation with moderates. DFL legislators will get to campaign against the budget as irresponsible borrowing and shifting. In all, the political advantage is decidedly in favor of the DFL and Mark Dayton.

They'd better take advantage in 2012. It will take three or four budget cycles to dig Minnesota out the hole created over the last decade.

Follow me on Twitter @aaronklemz

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