No Special Session so No Tax Relief

 Decision on Special Session about much more than Light Rail 

Metro_Transit_Light_Rail.jpgGovernor Dayton announced on August 18 that he would not call a special session of the legislature this year.  He said that his decision was based on Republican opposition to funding of the Southwest Light Rail Transit (SWLRT), but his plans for spending rather than tax relief likely factored in as well. 

A special session of the MN legislature was sought because the regular session ended without passage of several important funding measures, including:

  • A $600 million bonding bill, scuttled when the DFL Senate at the last moment tried to add SWLRT funding to a bill that had passed the House with strong bipartisan support.  Senate District 49 DFL Senator Melisa Franzen was one of seven DFL state senators who threatened to withhold their support from the 2016 bonding bill if $135 million in state funding for the SWLRT wasn’t approved.

  • The omnibus tax bill, with support of 89 percent of the legislature, was vetoed by Gov. Dayton due to a one-word drafting error.

The DFL governor held these bipartisan-supported funding initiatives hostage to his demand that $135 million more of state revenue be spent on SWLRT.  Is SWLRT really that critical to Gov. Dayton?  Or is he using it as a convenient excuse to delay, hoping that the House will again be in DFL control after the election? 

To review what is at stake, the special session could have delivered:

  • tax relief worth $260 million in 2016-2017, about $550 million through mid-2019.  Eighty-nine (89) percent of the legislature was on board for meaningful tax breaks – not for the wealthiest Minnesotans, but for veterans, farmers and students with college debts. 

  • a bonding bill for state construction projects worth between $600 million to $1 billion

  • Between $600 million and $700 million for identified highway projects, plus the transfer of $300 million in sales taxes on auto parts and repairs from the general fund into the state’s road and bridge accounts

Who are the supporters of SWLRT funding that counted more than the legislators?  The Metropolitan Council and business owners and real estate developers along the proposed SWLRT route. 

What arguments did Gov. Dayton raise to defend his position? 

  1. First, the need to attract talent to this region, as if the reason that skilled workers will come to the Twin Cities primarily is because it has light rail.  Really?  What they want are good jobs, a stable community environment, and an exciting metropolitan area that is vibrant and safe.    How about implementing tax reductions to attract more businesses and spur our anemic job growth?  

  2. Second, Gov. Dayton complained that Republicans offered no alternative to SWLRT to relieve traffic congestion.  So not true!  On August 16, two days before Gov. Dayton scuttled the special session, the Star Tribune ran an Editorial Counterpoint piece by Kim Crockett  arguing for Bus Rapid Transit (BRT) as much more flexible and cost effective than light rail.  She compared the 14.5-mile SWLRT project to the 17-mile Orange line BRT from Lakeville to Minneapolis:

  • Initial Capital Costs:  SWLRT ($1.86 billion) vs BRT ($150 million)

  • Annual Operating Costs:  SWLRT ($32 million annually, up to $49 million annually by 2030, while taking in less than half that in fares and federal grants) vs BRT ($8.14 million annually). 

GOP House Speaker Kurt Daudt has good reason to call SWRT a “boondoggle project” and an “inefficient” way to move people. 

So is there no Bus Rapid Transit possible in place of SWLRT?  There is.   In fact, BRT from Eden Prairie, Chanhassen, and Chaska has been operating successfully for almost 30 years, as described in this Twin Cities Business Magazine article, October 2015:   Transit Showdown in the Southwest Metro:  Can SouthWest Transit’s express bus system survive Southwest LRT?  Should it?  By Adam Platt, October 30, 2015

Southwest Transit required roughly $6 million in Minnesota taxpayer subsidy in 2014 for its express bus service from Eden Prairie.  It charges higher fares for the express ride to Minneapolis than the SW Light Rail will charge (despite SWLRT higher operating costs) but then the BRT busses offer comfortable seats and wi-fi. 

The Metropolitan Council is promoting SW Light Rail over Southwest Transit BRT because LRT had “three to four times the interest” enjoyed by BRT when modes of transportation were compared, according to Met Council chairman Adam Duinick.  Keeping the LRT fare low is critical to that level interest, and the Met Council has no problem spending more taxpayer funding.

Dayton Plans Spending, Not Tax Relief

So if Gov. Dayton’s reasons for blocking the special session do not hold up to fiscal scrutiny, why would he fight for it so hard? 

If the DFL takes control of the House in the elections in November, Gov. Dayton  will have $729 million dollars of surplus revenue unspent from 2016-2017 budget at his disposal.  While Republicans clearly felt that the DFL over-reached with their tax increases in 2013, Gov Dayton has never indicated that any of that should be returned to the taxpayers. 

The budget surplus cannot be justified as needed for rainy day reserves.  At the end of the 2016 legislative session, the Minnesota Management and Budget office projected $1.62 billion in the state’s contingency reserve accounts.

Gov. Dayton clearly intends to win in the 2017 session what the Republicans in the House blocked in 2015-2016.  Recall that the DFL majority in the Minnesota Senate proposed a plan that funded new programs rather than transportation.  They would spend $450 million of the 2016-2017 biennial budget surplus on education, racial equity, rural broadband, state government, courts and corrections, and human services.   This spending was not instead of other state programs, but in addition to them.  Many of these would likely require continuing out-year appropriations.  The Senate intended to only allocate $31.5 million of the surplus to transportation.  Instead of using the surplus to fund a significant contribution to road and bridge repair, Democrats in the Senate proposed a $1.4 billion bonding bill and supported the Governor’s proposed increase in the state’s gas tax.

Governor Dayton has clearly signaled that he feels time is on his side.  Reverting control of the Minnesota House to the DFL is critical to the success of his gamble.  Our efforts in support of Republican races in our Senate District and across our state will have real consequences.

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