Speed Gibson

Our Republican Governor Tim Pawlenty is receiving mixed reviews over the 2005 Legislative session. Many in the GOP base are grumbling over a number of policy reversals and the final budget. And I think it's fair to say that almost every Republican is at best disappointed with this "it's a fee, not a tax" rhetoric.

But Pawlenty has his GOP supporters, too, as evidenced by the editorial in todays Minneapolis Star Tribune by former GOP chair Ron Eibensteiner and Powerline's John Hinderaker. This article was a response to last Sunday's editorial by Taxpayer's League honchos David Strom and Michael Wigley. Oddly, the Strib itself seems to be sitting this one out, in effect endorsing the Governor's work this session.

Who's right? Let's start with the Bogus Gold analysis, where you'll find links to the editorials.

Pawlenty’s conservative critics – Strom and Wigley among them - have suggested the governor did poorly due to choosing the wrong legislative priorities and adopting poor negotiating tactics. They also raise questions of basic principle, and ask sensible questions about the governor’s commitment to the same. All of this deserves a response.

This editorial offers a litany of the governor’s good accomplishments, which ought to be remembered. But when it comes to answering Pawlenty’s critics it fails entirely.

This is an excellent summation of the disagreement.

Yes, Pawlenty has done some good things for Minnesota, and his critics, I among them, should be more appreciative. According to Eibensteiner and Hinderaker, Pawlenty can take considerable credit for the strong Minnesota economy, a result of keeping new regulations in check and holding off massive DFL tax increases. He focuses on goals, not tools like the no-new-taxes pledge they say.

Gov. Tim Pawlenty is the best thing that has happened to Minnesota and our party in a long time. He is as smart as anyone in politics, and is a likable guy who has connected with Minnesota's voters. In challenging times, he is doing a superb job.

Pawlenty's critics suggest that this success is in spite of himself at times. Several flip-flops, the fee vs. tax embarrassment, and his insistence on the Racino clearly did nothing to further Pawlenty's goals or the Minnesota economy. And how can someone "as smart as anyone in politics" have had such a tin ear on the Racino issue? As Strom and Wigley note:

We could go on and on, but you get the point. Nobody expects a politician to be absolutely rigid and never change his mind, no matter what the circumstances. But how many flip-flops does it take to make you wonder whether the governor is merely flexible, or is perhaps losing touch with his core principles?

Is government too big, or not? Does it tax too much, or not? Is gambling a good way to fund government, or not? Should people be forced out of their cars into government-run transportation, or not? Are baseball and football teams private businesses that don't need government money, or not?

These are not complex questions, and most of us vote at least partly based upon how the candidates answer them.

That's why it is so important that campaign promises mean something. The governor asked us to vote for him based upon what he said and promised during the campaign. Is it too much to ask that his promises mean something?

As Doug noted, Eibensteiner and Hinderaker are not responding to these questions raised by Strom and Wigley. But at the end of the first budget session, I dare say all four were in near-jubilent accord. What happened?

The elections of 2004 happened. Despite President Bush's strong national showing, the GOP lost 13 seats and nearly the majority in the House. The Tim Pawlenty that emerged from this was a changed man. Eibensteiner and Hinderaker are largely praising the 2003 Pawlenty. Strom and Wigley are criticizing the 2005 Pawlenty.

The 2003 Pawlenty said, "Minnesota doesn't have a tax problem, it has a spending problem." The 2005 Pawlenty, seeing a healthy 8% increase in revenues, had no problem spending it. After handling the large deficit of 2003 as a spending problem, he handled the small deficit situation of 2005 as a tax problem, requiring either the Racino or the cigarette tax.

The best evidence of this transformation is Governor Pawlenty's interview with Eric Escola and Cathy Wurzer on KTCA's "Almanac" of July 15, whose unofficial, edited transcript follows. These are not the responses of a Conservative. These are not the responses of the 2003 Pawlenty. Even some of the humility of the 2003 Pawlenty seems to have disappeared.

Wurzer: What do you consider to be one the main accomplishments during the general and special sessions […]?

Pawlenty: If I had to point to just one thing, I’d probably say the improvements we made in school funding and school [reform, providing the] biggest increase in school funding in 10 or 15 years, but as importantly also trying to improve the system through things like performance pay rather than seniority pay. […]

Wurzer: [Do you think teachers are going to go for this “Q-Comp” performance pay system?]

Pawlenty: Yes, I do. In fact, they are. We already have inquiries from a number of school districts, that they’re interested. It could be [an] individual school building or a whole district, and it’s voluntary. The unions and the school district have to volunteer to do it. […] We’re getting calls from around the country on it. We’re going to present on it this weekend at the National Governors Association in Iowa, and they’re interested in it. […]

Education funding was the high point? The biggest increase in K-12 spending in years is a good thing?

Thanks to SCSU Scholars and Craig Westover, we now understand that the Q-Comp system is basically toothless in terms of requiring objective proof for payment. So all we really have here is a big spending increase. We're still waiting for all those previous "investments in education" to make a measurable difference.
What makes Pawlenty think this one will work, such that he can list it as an actual accomplishment?

Eskola: [… You’ve] had two budgets now. [In 2003,] it was conservative Tim Pawlenty holding the tide against spending and [taxes. In 2005,] are you a new, more moderate Tim Pawlenty with 8 percent spending increases […]? What’s the difference in the two years?

Pawlenty: Well, we got a little walking around money […]. When I became Governor, we had a 4.5 billon dollar deficit. And by the way […], we finished that budget cycle on June 30th with a surplus. And we had tough times […]. We had a recession, we’re in a war, we had this huge budget deficit, and an only moderately improving economy […]. And now that has stabilized, and the economy is improving, and we’ve got some change in our pockets. So we’re able to live within our means and still fund those priorities.

This speaks for itself. The mere presence of "change in our pockets" is sufficient reason to spend it.

Pawlenty (cont.): There was a big gap between us and the Democrats. They wanted to spend a lot more. So somebody had to bridge the gap, the difference, and so I proposed to do part of that, took on some heat from my own party, but given the lean times we’ve been through, it’s appropriate to give some more money to our schools [and the safety net but not] so far out of range that it raises taxes to the point of discouraging investment and job growth.

I'm not aware of any reports that our public schools or any other government agency suffered significantly as a direct consequence of the 2003 budget. If you had told someone in 1993 that the biennium budget ten years from then would have grown to $30 billion, would they have believed you? Yet Pawlenty is apologizing for these "lean" times, that resuming the tax and spend course is at least partially justified on that basis.

Wurzer: [You spent a lot of time and personal capital on raising revenue through gambling. Why?]

Pawlenty: Well, the gaming situation in Minnesota needs to be re-aligned. […] We have a very big native American gaming industry in Minnesota but most of the money goes to a small group of tribes in and around the metro area. Most of the native Americans live in the northern tribes and they don’t get much benefit from the current situation. So we’re trying to get some benefit to them, as well as, like most other states, try to get some benefit to the state directly. And most other states with large native American gaming have that kind of arrangement, so we’re trying to move Minnesota in that direction.

Wurzer: Critics say it’s not really a matter of fairness, it’s just easy money.

Pawlenty: Well it is a matter of fairness. When you have an industry that essentially functions as a monopoly, to say, look, in order to keep the monopoly or the franchise, trying to get some money to the northern tribes who are struggling [and to the State] is a fair thing to do. Again, this isn’t something we just cooked up on the back of a napkin. Wisconsin’s done it, Connecticut did it, California did it. Most of the states with this kind of native American gaming have done it. We were hoping to do it voluntarily, rather than force it through the Legislature. But we weren’t able to get the agreement with the tribes.

As the old saying goes, when they say it isn't about the money - it's about the money. Where was this concern for gaming fairness in 2003? And why is it assumed that the State must impose a solution? If the tribes are willing to deal with the state, they can settle this among themselves and for less. No, this is all about getting money to the state treasury - "directly" as Pawlenty put it.

Eskola: Governor, is the cigarette fee is OK from your perspective, why isn’t [a gas tax increase] OK, which is almost like a pure user fee? […]

Pawlenty: […] There are accepted criteria for what’s a tax and what’s a user fee, but people don’t get too caught up in the details of that. I thought it was important to make sure that we tell people, yes, we want a compromise. The only thing I could get the Republicans and the Democrats to agree on in terms of a revenue source which would help bridge the gap is this cigarette fee or as some call it, a tax. At this point I don’t care what you call it. I called it a compromise and a solution.

Pawlenty (cont.): As to the gas tax, the hangup that I have in part with that is it’s the law as a tax […]. One of the things I said early on is we don’t have a perfect definition between a user fee and a tax, but [one way] is how has it been represented in law. And the gasoline tax in law is pretty clearly a tax. […] If the people want a gasoline tax [increase] or the Legislature does, let’s put it on the ballot. I thought that was a reasonable compromise.

It's a fee, he kept insisting, to the point of demanding the law be written that way. But now that it passed, Pawlenty doesn't care what we call it, a fee or a tax. And here again, Pawlenty is portraying himself as the Solomon of budget negotiations, triangulating against his own party.

Eskola: [… I] think the water’s a little muddy on your stance on these revenue issues. Going forward, […] through what prism […] are you going to look at revenue raisers? [Are you changing on this?] Are you still with the Taxpayers League pledge? Where are you?

Pawlenty: I think the Taxpayers League has said I’ve broken their pledge. It was never about the piece of paper or the pledge. It was simply about the value of saying in a really high taxed state, with our revenue growing about 8 percent, we should be able to live within our means and fund our key priorities without having to raise taxes further. It’s a simple as that.

So as we go forward, I think I’ve proven my mettle on taxes, that’s pretty clear. So whether it’s the Taxpayers League or any other interest group, I’m probably not going to be signing anyone’s pledges, because I have a record I can stand on. But what I would say is this: the economy is improving. Under the November forecast, our revenue is going to grow 8 percent. I’ll predict […] that will be increased to 9 or 10 percent. And that should be enough to live between our means in the state of Minnesota without having to raise taxes. And so, I think we can do that.

Now if Democrats want to raise a whole bunch more money and they’ve got another impasse, we can’t have another shutdown. We have to find some compromise. And it’s one of the lessons learned in this terrible partial government shutdown we just had. Everyone’s got strong principles but in the end we’ve got to find some common ground and close up the deal.

This is troubling on a personal level. You sign an agreement, break the agreement (tax), and claim you didn't (fee). When the holder of that agreement says you did break it, you hedge with a "I think" they said I broke it line, then procede to redefine the agreement on the fly. He's not going to sign any more such agreements, but he's sure trying hard to pretend that he honored this one.

Here again, we see Pawlenty, The Great Compromiser. Compromise isn't always good or required. Ronald Reagan's Soviet strategy of "we win, you lose" proved very successful.

Wurzer: What did you learn about governing through all of this?

Pawlenty: I learned a lot about it, not so much about governing, but about people and politics. […] What I’ve learned is that there are certain people in the Legislature who are very powerful, who have very important positions that if left in charge, we will have impasse. They [won’t] compromise. […] You can’t have certain committee chairs who’ll say I’ll never compromise and then have the leader say I won’t force you to make any changes.

He didn't learn much about governing? I can't disagree with him there. But he learned a lot about how the Legislature works, things that he apparently missed while in the Legislature himself, and in a leadership position.

This is breathtaking in its hubris. Pawlenty, whose own leadership skills are demonstrably weak, is accusing demonstrably strong leaders (of both parties we are left to infer) of not simply giving in to his wise compromises.

Eskola: How much of a special interest influence is at work here?

Pawlenty: It’s enormous. I think the citizens generally know there’s interest group power at the Legislature and in Congress, but I don’t think they have any real clue as [to] how penetrating it really is. […] I think the public needs to pay attention to those leaders who are willing to take on some of those interest groups, because in the end if the public doesn’t come in and reward that kind of behavior, then the interest groups will come in and punish it.

Pawlenty makes an excellent point here. That's a big part of what happened to Lynne Osterman and the other GOP House incumbents turned out in 2004. But who are the leaders Pawlenty is referring to? Himself, perhaps?

Eskola: I know you’re at least open to a special session in the Fall. […] I get the impression you and the Legislative leaders are sort of scrambling to find three or four ornaments to put on the tree for what is really going to be a stadium special session.

Pawlenty: I don’t want to raise false hopes about a fall session. I’m open to it. I’d be willing to do it if people can agree on the scope, the issues, and the timetable. Come in, come out, and get it done. Just take the vote and go home, up or down. Given the personalities involved […] that may be too tall an order. […]

Wurzer: [Special sessions usually address big issues, like Northwest Airlines a few years ago. Are amenities like stadiums enough to merit a special session?]

Pawlenty: [Normally yes, but] for example, if you’re going to do a Gophers football stadium and I think we are eventually, many people support that, does it make sense to come in and get that done this year and avoid a 10 percent increase in construction costs and interest that would accrue over the next year if we did it a year from now? Is it a crisis? No. But would it be smart […] to do it this year vs. next year? Probably.

Eskola: [What are the odds?]

Pawlenty: [I’d say 60-40 against.] Not because I don’t want to do it or I’m not open to it. It’s going to be really difficult [... because] these issues are controversial.

It's hard to miss that Pawlenty wants these three or four ornaments now. If agreement comes, he'll call the Special Session and take his share of the credit for adding "fun" to the state. If the Legislators can't agree (and where is Solomon this time?), then the Legislature takes whatever blame there is, Pawlenty none.

But it's also hard to miss that the public simply doesn't want any of these stadium proposals to date, not even the Twins proposal. It would be more hubris to, as a "governor of all the people of Minnesota" impose by force of law his view of what's fun to do in Minnesota.

Eskola: Have a good weekend at the National Governors Association in Des Moines. And report back!