04 July 2023

When Democrats control a state

"While Republican-led states have recently approved a bevy of laws advancing conservative priorities, Democratic-controlled states have mirrored that pattern with progressive policies. Perhaps no state has taken more dramatic action in that direction recently than Minnesota, which saw its Democratic governor and legislative majorities work in lockstep, passing several laws to transform the state’s social and economic landscape...

“Minnesota is an example of a full-on progressive gallop towards greater government activism and a willingness to spend just unimaginable amounts of money.”

Democrats unexpectedly flipped the state Senate in the 2022 midterm elections, granting the party a trifecta of power for the first time since 2013...

For the governor and his fellow state Democrats, Minnesota’s argument is embodied in strengthened abortion protections, in paid family and medical leave policy, and in a new child tax credit for low-income parents. The list of other new policies reads like a progressive priority manifesto: restoring voting rights for the formerly incarcerated, automatic voter registration and pre-registration for teenagersdriver’s licenses for undocumented immigrants, background checks for private gun transfers and implementation of a red-flag law, a $1 billion investment in affordable housing, legalizing recreational marijuanauniversal school mealsbanning so-called “conversion therapy” (the practice of trying to change a person’s sexuality or gender identity), and expanding protections for transgender citizens. The legislature also passed a bill mandating a carbon-free electric grid by 2040...

Minnesota’s new child tax credit provides up to $1,750 per child for couples earning up to $35,000 and single filers making up to $29,500, and then gradually phases out. There is no limit on the number of children who qualify, and the credit is refundable, meaning that it is accessible to families too poor to pay income taxes...

Despite vehement Republican objections to the bills passed in recent months, Jacobs predicted that Democrats would not face a significant backlash for their legislative actions—in part because the Minnesota state Senate and the governor’s office are not up for election again until 2026. But the Republican Party has also been struggling to gain ground in what Jacobs described as a state that was “polka-dotted,” rather than simply blue or red. During its time in the trifectaless wilderness, on the other hand, the Democratic-Farmer-Labor Party has built up its base of support.

“[Republicans] are facing a powerful and potent progressive ecosystem that has candidates, and it’s got allies with money, volunteers, voter lists,” Jacobs said.


Minnesota's ambitious plan to give lower-income residents free college has created a "crisis" in neighboring North Dakota, where higher education officials worry about a drop in enrollment from Minnesota students who can get a better deal at home... Minnesota this year passed the North Star Promise scholarship program, which will pay college tuition and fees for in-state residents whose families earn $80,000 a year or less. 

More than half of North Dakota State University's incoming class, and 45% of its undergraduate student body, consists of students from Minnesota... "Probably half our football team comes from Minnesota, so that's kind of a big deal to us," Rod Flanigan, president of the North Dakota State College of Science, said at the meeting. 
Addendum July 13: 
According to the latest filings with the Federal Election Commission, the Republican Party of Minnesota has just $53.81 in the bank... By contrast, the party is reporting almost $334,000 in debts.

The Minnesota GOP is not alone in its financial woes — a number of Republican state committees face a dire cash shortfall, including states that could be decisive in the 2024 presidential election.

A report earlier this month revealed the Arizona Republican Party has less than $50,000 in the bank, as its longtime donors bail on the party over its embrace of election conspiracy theories. And Roger Hudson, the deputy chief of staff of the Colorado Republican Party, claims that they are bankrupt and being evicted from their office space over lack of funds — although the party's official social media account denies this and claims Hudson is "spreading lies" because he is disgruntled the party admonished him for supporting transgender rights.
How interesting.  Citation from RawStory.

30 comments:

  1. Question to my conservative friends: which of these Minnesota policies would you reject as against your core values? And on the other hand, which of these would you reject as unlikely to succeed -- and therefore be willing to change your mind about if, in a few years, they appeared to be working for Minnesota?

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  2. I have read many articles, including the ones linked in the post, and have found no politician reject any of this on "core values." Most of the legislators quoted expressed concerns about the spending and its effect on taxes in the future. Are those invalid concerns? Also, The Senate did adopt a Republican amendment that exempted a range of baby products from sales taxes, everything from cribs to car seats to infant eating utensils.

    I think these new policies are great, though the issue of taxing SS did not go far enough.

    This country was created with the idea that each state would be a mini-lab, where citizens and elected representatives were free to establish policies and see how things work out. Governor Walz "framed the legislative accomplishments not only as “the right thing to do” but as advertisements for settling down in his state. “Northern cold states are going to have to make the pitch on why people should move and stay there,” (from the NR link). That will be the determining factor in the long run. Will young people stay home (or migrate to Minnesota) to raise families, grow the economy, and remain in-state when they retire? And will voters stay engaged and continue to elect people who support these policies even if/when they require tax hikes in the future?

    Does the North Star Promise Scholarship Program cover vocational schools? I read the summary of the plan (https://www.ohe.state.mn.us/mPg.cfm?pageID=2590) and found no mention of trade schools. Not everyone needs nor wants a college degree. Since the program does not start until Fall 2024, I would guess there will be lots of recently graduated seniors who will be taking a "gap year" if they are staying in-state for college.

    Anyway, time will tell...

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    1. Correction: Apparently the "core values" were not enough to support the exemption of baby products from sales tax, even with bipartisan support:

      "A bipartisan proposal to exempt a wide array of baby products from Minnesota's sales tax is apparently off the table.

      Republicans in both chambers of the Minnesota Legislature are criticizing the DFL majority's move to nix the provision from an omnibus tax bill during conference committee Sunday. ...the provision had a relatively small fiscal impact of $7 million over the next biennium. " (referring to Sunday, May 14, 2023)

      https://bringmethenews.com/minnesota-news/provision-to-exempt-baby-products-from-mn-sales-tax-stripped-from-proposed-bill

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    2. BTW, Sunday, May 14, 2023 was Mothers Day.

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    3. Re vocational schools, as I read it the bill covers any public secondary education school (not private ones). The public ones would include 2-year programs:

      Minnesota's public two-year colleges (technical/community colleges) accept all students with a high school diploma or GED. Some programs are more selective with waiting lists and high preparation standards so students are strongly encouraged to prepare for college-level work by taking recommended classes in high school.

      Public two-year colleges offer a variety of educational options. You can earn a credential focusing on a specific occupation. Or you can take up to the first two-years of courses to complete a bachelor's degree upon transfer to another four-year college.

      Some colleges offer opportunities to participate in athletics, clubs and activities in theater, music or the arts.

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    4. The last three paragraphs in my comment should have been in quotes and attached to this link:

      https://www.ohe.state.mn.us/mPg.cfm?pageID=64

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  3. Around her the parents have drummed into their kids it's college degree or a homeless trash picker. As a result several trade high schools have closed so the parents won't be ostracized at the country club and Tupperware parties.
    This is causing a huge deficit in the trades for plumbers, electricians and other skilled tradesmen the future high tech homes will need.
    One taking up the slack is a private school whose graduates all have good job offers before they graduate. https://www.williamson.edu/
    xoxoxoBruce

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    1. I've taught in three different university medical schools, and in one two-year technical college. I can tell you without hesitation that the most eager-to-learn and the most enthusiastic-about-the-course-material students I've seen in 30 years were the vocational students studying for a specific career.

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    2. I started my teaching career at a high school that had a vocational program. I agree that the vocational track students I had were were far more more eager and engaged than the general and or college track classes. They were more focused on short and long term goals. Most of the students knew they likely had a job waiting for them upon graduation or would be attending a 2 year program while working part time in their chosen field.

      I taught math and while I think everyone should have at least a passing knowledge of algebra, geometry, and financial math, the push in the past decade to get everyone ready for college level math is ill-advised. CCR (College and Career Ready) curriculum fails to meet the needs of many students. A career (aka lifetime skill) does not require a 4 year degree.

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    3. I meant to add that most post-secondary technical/vocational schools are private, at least in my experience. Students generally are not eligible state funded "free" education programs. I understand why states do not generally include private schools in these programs, But it can be frustrating for parents and students.

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  4. Most of the legislators quoted expressed concerns about the spending and its effect on taxes in the future.

    Of course, this is meaningless drivel. You can express concern about anything, but that does not make the concern valid.

    In fact, we know, from many many many studies of policy changes, that higher taxation leads to better government services and better living conditions. The states with higher taxation tend to have better economies, better schools, better health and happier people.

    See: Sweden, Norway, CA, MA, NY vs AL, MS, KS. And, of course, MN v WI.

    (TX and AK are a bit of exceptions because while they have low taxes, they fill their state coffers with lots and lots of revenue from their natural resources that are - very communistly - owned by and for the benefit of the people. Similarly, FL & AZ have low taxes but live of the retirement funds of immigrating retirees)

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    1. Beg your pardon, but as an example CA and NY with the highest taxes ini the US do not provide the best services -- best economies, schools, health or public happiness. A bit of research will show your thesis does not hold.

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    2. https://worldpopulationreview.com/state-rankings/maternal-mortality-rate-by-state

      Maternal mortality by state. Oh look, High tax states in the top, low tax state run by family-value Republicans in the bottom.

      But keep cherry picking on data you're not presenting, my anonymous friend.

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    3. Interesting. You presented no data in your cherry picking post, but others are expected to.

      Pretty much everyone here is anonymous. Do you know who Mareino is? Bicycle Rider? Nepkarel? xoxoxoBruce?

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    4. Found this today re life expectancy in Dem vs Repub states:

      https://www.newsweek.com/how-life-expectancy-republican-states-compares-democrat-ones-1811447

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    5. In my view, concerns about spending and taxes are not meaningless. I guess the voters can decide if such questions are valid.

      Also, happy people tend to stay put. NY lost almost 1% of their population last year and CA lost enough population over the past few years to a congressional seat. Looking at the quality of life rankings (link posted in a post below,) both MN and WI are in the top 10, so it will be interesting to see if that changes over the next decade. Both states have a stable population over the past couple of decades.

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  5. Oh look, CA and NY not even in the top 20.

    https://worldpopulationreview.com/state-rankings/quality-of-life-by-state

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    1. And yet the bottom of the list is mostly Republican states.

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    2. And yet you have ignored the point in your original post...a point that seems to have been proven to be unfounded at best.

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  6. "'Probably half our football team comes from Minnesota, so that's kind of a big deal to us,' Rod Flanigan, president of the North Dakota State College of Science, said at the meeting."

    Good to know your priorities are in order, Prez.

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    1. The NDSU Bisons have won 17 national championships in football, including 9 since joining Division I FCS in 2008 and regularly appear on regional and national TV. The money they bring in to the school supports every other sports program, most of which bring in no money. The football program also enabled the school to build an activity center open to all students and Fargodome, a 20,000 seat domed stadium used by the community for more than just football The players they send to the NFL have been generous in their contributions back to NDSU in general. So yeah, they are kind of a big deal to all of the sports and education programs and to the local economy.

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  7. Thesis: States with "higher taxation tend to have better economies, better schools, better health and happier people".

    State Tax Rankings (including both state and federal taxes) -- from https://taxfoundation.org/income-tax-rank-2022-state-business-tax-climate-index
    California 49
    New York 50 (highest)

    Therefore we postulate should CA and NY should score the highest on the above factors. Let's look at the data

    State Education -- from https://scholaroo.com/report/state-education-rankings/
    California 40
    New York 6

    State Economy -- from https://www.usnews.com/news/best-states/rankings/economy
    California 29
    New York 45

    State Healthcare -- from https://www.moneygeek.com/insurance/health/analysis/2022-top-states-health-care/
    California 12
    New York 22

    State Overall Health -- from https://www.beckershospitalreview.com/rankings-and-ratings/50-states-ranked-by-overall-health-in-2022.html
    California 22
    New York 23

    State Happiness -- from https://worldpopulationreview.com/state-rankings/happiest-states
    California 7
    New York 23

    I would say in general, the thesis fails.

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  8. Article in the Star Tribune today discusses how the state of Minnesota managed to accumulate the huge budget surplus they are currently spending -

    https://www.startribune.com/ramstad-where-minnesota-got-all-the-money-its-spending-budget-income-tax-corporate-capital-gains/600288271/

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    1. Unfortunately, that article is behind a paywall.

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    2. an excerpt:
      "The question that puzzled me was: Where did the state get all this money?

      The easy answer is Minnesotans earned it. The state's income tax collection, which accounts for half of its revenue, grew 22% during the last two years. That was four times greater than expected.

      To be sure, some sound financial management also helped. During the Mark Dayton years and start of the Walz administration, Minnesota's government annually spent a little less than its revenue, creating little surpluses that accumulated.

      And it turned out the quick, pandemic-related recession in 2020 did little damage to the state's finances. It had a $1.5 billion surplus heading into the fiscal 2022-23 biennium that began July 2021 and ended last month.

      Lawmakers in 2021 crafted a budget around the expectation that the state's revenue would be $50 billion during the biennium.

      But a surprise happened. The state's revenue turned out to be $61 billion instead.

      While tax rates stayed the same, the revenue rose because Minnesotans' income did. And most of that was nonwage income, which people get from selling investments or businesses.

      When you file your state taxes, you are not required to show sources of your nonwage income. So the state doesn't precisely know where the money came from, Minnesota State Economist Laura Kalambokidis told me.

      But it's easy to guess. The stock market had amazing years in 2020 and 2021. The S&P 500 gained 17% in 2020, which would have boosted the state's income tax collection in 2021. It leapt another 27% in 2021, which would have boosted last year's tax collection.

      "It wasn't a Minnesota-specific phenomenon. Every state that has an income tax saw that in those years," Kalambokidis said.

      Capital gains are obviously volatile. Last year, stock market values fell, which is part of the reason that Kalambokidis and her colleagues forecast flat revenue for state government this year.

      But equally as striking, the budget forecasters didn't shift revenue expectations for 2024-25 back to where they were two years ago.

      That's in part because Minnesota's corporate tax collection helped create a new, higher revenue floor. "The corporate tax forecast behaves more like when the base goes up, we go off of that new base. It's a little more straightforward than the income tax," Kalambokidis said.

      And in setting the budget for the next two years, lawmakers were careful not to cut revenue. They held it flat at $61 billion. That's why they created some new taxes while giving back $3 billion of the $17 billion surplus in rebates to some Minnesotans.

      Spending will be closer to $70 billion for the next two years, but it's being covered by the surplus.

      The state budget office's forecast in February accounted for a mild recession in 2023. That hasn't happened yet. And the S&P 500's total return is 17% so far this year, which should be pushing the nonwage income of Minnesotans upward again.

      That could mean higher-than-expected revenue for the state this year, leading to possibly another surplus that some lawmakers will see as fuel for more spending.

      We'll know more in October, when the state budget office closes the books on the just-finished biennium, and November, when its next major outlook is published.

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    3. Thanks for the excerpt. I will try to find the full article. I wonder if a good portion of that nonwage income is from the investments of retired residents? That would certainly be a motivation to keep retired people in the state, and encourage to make sound investments for their retirement years.

      I lean to the conservative side, but I hope that these policies and programs are successful and are given time to prove, or disprove, their value to citizens and the state.

      Also hope some of that surplus is put away for a "rainy day."

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    4. There's not much to gain by finding the full article; I excerpted almost all of it (against my general blogging principles). It was sort of an op-ed piece on the business page of the paper, without any additional useful data.

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    5. Did not intend for you to go against your blogging principles, but appreciated.

      Tangentially related, I read an article this morning about the unique and creative veto powers of Wisconsin governors. The governor can replace words and letters in a budget bill (the Vanna White veto) as they wish due to a constitutional amendment enacted in 1930. A power used by both parties, though former governor Thompson (R) used it 457 times in 1991! The current governor used it 51 times this year.

      https://apnews.com/article/evers-veto-400-years-wisconsin-school-funding-67a7847e4a24ea86f7d16123356f770d

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  9. Any discussion about fiscal responsibility of the two parties should include this bit of information that I just encountered today (July 13):
    "According to the latest filings with the Federal Election Commission, the Republican Party of Minnesota has just $53.81 in the bank... By contrast, the party is reporting almost $334,000 in debts."

    https://www.rawstory.com/minnesota-gop/

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