The shutdown is over
It's over. This morning, shortly before 3 A.M., a budget deal was reached, and a "lights on" bill sending furloughed workers back to work was finally passed. The legislature has until Wednesday to pass the real bills, given staff enough time to put them together. They should pass then, barring any extremely extraordinary events.
The deal includes a 75 cent cigarette tax (still called a "fee" so Pawlenty can save face, although it's debatable how well that will work). Nobody on MnCare right now will be thrown off, and the benefits caps are repealed, a major win. Education spending goes up four percent a year, and Pawlenty got his performance pay, which is not a big deal in my opinion.
Even though the Senate Democrats were opposed by both Pawlenty and the Republican House, they got almost all of what they wanted, from a practical point of view. The income tax increase was nothing more than a means to an end, I think. The important thing was the health care, and they got what they wanted. I don't see anything that the House Republican leadership will like in this bill, aside from education increases and performance pay, but for once their influence didn't matter.
It took far too long to come to this point, but I think the citizens of Minnesota will be well served by this outcome.
posted by MN Politics Guru @ 05:35
3 Comments:
And is Pawlenty going to be tagged as the ineffective leader he is? Or was the press conference where he was referred to as a "statesman" going to be the party line. My guess is that if the DFL doesn't watch out they will be taggd as the problem!
Just remember that we are NOT out of the woods yet. If they do not have a full-blown, passed by the house and the senate package by Thursday night, we do this all over again. And this time it is for real. No using vacations, no slight-of-hand, just hardcore layoffs.
They are all ineffective since they did not get the &^%$@ job done on time to begin with. This is a shared blame.
Don't get me wrong, if everyone holds to their end of the deal, this will close a lousy chapter in Minnesota political history. However, many of us know that there are too many stragglers that would love to undermine a deal like this just for the fantasy of a few column inches somewhere, or a 20-second soundbyte.
I think TPaw has some problems on his right flank, and I think Dean Johnson will join John Hottinger at the "Former Majority Leader's Retirement Home." The longer term is what is going to be interesting to watch.
I wish I could share your optimism that the state will be "well served" by this outcome. If you're gonna rely on a tax as regressive as the cig tax, it's better to do it for social policy reasons (that is, encouraging people to quit smoking) than to do it as a revenue raiser.
The cig tax is a declining tax-- consumption has been declining nationally for a quarter century, and consumption in Minnesota (or at least taxable consumption) will likely fall at an accelerated rate once the 75 cents kicks in.
So it's pretty disturbing to me to hear that the cig tax is part of the solution that guarantees adequate funding for MNcare and education spending, considering that the costs of both of these services will grow a lot faster than cig tax revenues ever will. Sounds like a recipe for future budget deficits to me.
Check out www.ctj.org/blog for more on what other states (and the feds) are doing with their tax systems.
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