Mr. Dahle Goes to St. Paul

This past Thursday, after a couple of hours greeting State Fair visitors from the Minnesota Senate booth, I headed south to Savage to step aboard a barge for a trip down the Minnesota and Mississippi River towards St. Paul.  The trip was sponsored by the Highway 169 Corridor Coalition as over 100 members made the 3 hour trip. We often think of the Hwy 169 corridor as roads and rail, but we cannot overlook the importance of the river in making this area a truly inter modal transportation network.

The 3 R’s (road, river, and rail) along Hwy 169 are economically vital for funneling freight into the Minneapolis/St. Paul Metro Region from the Mankato area and southern Minnesota. This area produces almost half of Minnesota’s corn, soybeans and ethanol, which makes Minnesota third in the nation for production among all states. Other major commodities moving along this corridor include aggregates, clay and sand, hogs, manufactured goods and food products.  The corridor connects major producers of ethanol, biodiesel and their byproducts to markets and refiners along ‘ethanol alley,’ the southwest freight corridor formed by Highway 60 and the Union Pacific Railroad.

The Ports of Savage are important for grain exports via the Minnesota and Mississippi River systems, guaranteeing low-cost, competitive transportation to regional and world markets for Minnesota farmers. The corridor is expected to play a future role in expanding access from western Minnesota agricultural producers to the Ports of Savage via routes capable of bypassing Metro congestion.  This is good news for the communities in my district along the corridor as we work to put together a long range plan of maximizing economic development for the area.

This past Tuesday, Representatives David Bly, Patti Fritz, and I visited with Rice County Commissioners and several other Rice county officials.  It was a good meeting with an opportunity to hear the concerns of our county leaders who have some real concerns with the state budget and its effects on county services.  The point was made clearly by County Administrator Gary Weiers that County governments are finding it increasingly difficult to carry out the federal and state government’s business with continued cuts to County program aid.  Without reducing the mandates, business as usual cannot continue. In 2010 State funding to Rice County was reduced by over $1.3 million. Revenue reductions without mandated reductions are a cost shift from state to local governments.    This has a big effect on social services, our district courts, and the dozens of agencies and departments that allow local government work to for Rice County residents.  Paul Beaumaster, Rice County attorney, expressed concerns that reductions to the courts are impacting counties by attempting to shift costs for legal representation in certain cases.  Lines have become blurred as to who should pay the real costs of our court system, the state or the county?  Mark Shaw, director of Social services, expressed his concerns that severe budget cuts now will have long term implications later.  Those people served by county services, even more during the recession, will have greater needs at greater taxpayer expense, unless they receive help now.  With the state facing a $6-7 billion shortfall next biennium, we need to be talking about solutions now.  The Representatives and I will be meeting with County officials throughout the district in the months to come.

This past week I spoke at a meeting of the Northfield Downtown Development Corporation along with Representative David Bly. A few days later I spoke at at a gathering of the New Prague Chamber of Commerce along with Representative Laura Brod. With a couple of dozen persons on hand, the topics focused on the recently completed legislative session and the outlook for the next session. Of course there were some concerns expressed about Local Government Aid cuts, rising property taxes, the next state budget, the overall economy, and the health of our downtown businesses.

The legislature did enact several enact several measures designed to improve our business climate. In addition to a $680 million capital investment bill, the House and Senate passed the Angel Investor Tax credit, equal to 25% of taxpayer’s investments in small Minnesota businesses involved in high-tech, bio science, and green manufacturing industries. The Historic structure rehabilitation tax credit (20% of the rehabilitation costs) designed to assist in upgrading historic buildings, was passed along with a Research and Development tax credit. This credit is designed to spur innovations within Minnesota companies by increasing the current 5% tax credit to a 10% tax credit. it also expands eligibility for the tax credit to partnerships and LLC’s, rather than just corporations.

The legislature also directed the Dept. of Employment and Economic development (DEED) to identify at risk businesses in the state and develop tools the state can use to retain and attract new businesses. It also creates a fast action economic response team that would work with at risk businesses to ensure they are utilizing state services and identify their needs to ensure they are being met. The response team would also assist out of state businesses looking to relocate in Minnesota. The Senate also passed a bill that was into law that prescribes DEED to raise private funds for the Office of Entrepreneurship and Small Business Development and maintain a virtual network of resources that are available for new Minnesota business ventures and entrepreneurs.

Finally, the legislature passed a bill this session to fund a comparative study to look at the effects of state regulations on costs and delays in starting a small business in MN, Wisconsin, Iowa, and the Dakotas as well as the typical costs that go along with businesses in retail, manufacturing, and services industries. The study will be conducted by a state higher education institution, and will serve as a guide for future lawmakers as they outline the state’s economic development strategy.

While the State faces the daunting task of cutting over $900 million from the budget this year and who knows how many billions next year, it would seem easy to look over the State’s allocations and start whacking away. Believe me, it’s not that easy.
Let’s look at one particular item, buried deep in the Judiciary budget: the Sentence to Serve Program, just one of the items on the Governor’s chopping block. This program takes prisoners out of the local jails and allows them to “work off” part of their jail time, as well as other direct costs. The city of LeCenter has used the Sentence to Serve program several times. The prisoners there helped paint the city owned swimming pool, cleaned up debris along Highway 99, helped with brush chipping, worked at the city/county recycling center, painted city buildings, and picked up trash at the local parks. These probationers work hard. They finish their work with a real sense of accomplishment. Today a city council woman from Waterville shared a story with me of a recently released prisoner who asked her for directions to the local park he had worked on a few years ago. He was proud of the work he had done and was eager to revisit the fruits of his labor.
These tangible benefits are totally lost in the monetary considerations of a budget crisis. It is so important that we as a State take a holistic and systematic view of the costs and benefits of any program. There is so much at stake.

I recently held a town meeting in a small town on the Western side of my Senate district. As the town meeting turned its focus to the budget crisis, one gentleman stood up claiming to have all of the answers regarding Minnesota’s budget woes. He said he had a proposal for “solving the state’s budget deficit without raising taxes.” I said I was interested in his “list” and he said he would be sure to send it to me. Sure enough, a few days ago I received a document outlining what some of those cuts might look like. Here is a small sampling of some of what Minnesota could expect (and I quote):

• Eliminate intrusive and ineffective home visiting and mental health screening programs
• Eliminate Early Childhood Professional Development
• Eliminate Kindergarten Readiness Assessment and Intervention Programs
• Eliminate Preschool screening and ECFE (Early Childhood Family Education)
• Eliminate Early Childhood Literacy
• Eliminate After School Community Learning Grants
• Repeal the public school staff development mandate
• Reduce the number of MNSCU campuses
• Require the DNR to fully self-fund via fees
• Eliminate Local Government Aid
• Reduce Court appropriations and increase attorney’s annual license
• Reduce Human Rights Department funding
• Provide Health Insurance subsidies, not Health care services and payments

No thank you. If this list is a solution, count me out. The cuts to early childhood education alone would set this state back 30 years creating a host of problems for years to come. We need to reaffirm the connection between intelligent investments and the public benefits we receive in return. We are a state of community minded people who care about our children, our neighbors, the elderly, and the poor. We value these public assets and most of us are more than willing to pay for them.

The document to which I refer comes from the Minnesota Budget Solutions Coalition which includes organizations such as the Minnesota Majority, Taxpayers League of Minnesota, Minnesota Family Council, and NFIB Minnesota Chapter… to name a few.

Imagine Junior working and saving for years, pocketing part of the money he earns on his paper route, hoping to squirrel away enough money for a down payment on his college education. That’s a nice story until Dad breaks open the piggy bank to skim off some funds that he says aren’t being used.
The same story is being played out in the Minnesota state budget. Workers forward part of their hard earned pay into dedicated funds only to see the Governor raiding their piggy banks to transfer the money to the General Fund. Last year the Governor proposed eliminating the Health Care Access Fund and transferring all provider tax revenues into the general fund. Why should the Health Care Access Fund serve as a slush fund to pay for projects unrelated to health care or to balance the state’s budget?
This year we learned the Governor’s supplemental Budget was to transfer $267,000 from the snowmobile dedicated account and another $400,000 from the ATV account to the General Fund. Only after organized outrage from these groups did the Governor back down from that proposal.
Electrical contractors are seeing a $1.5 million transfer from the Construction Codes and Licensing Division’s continuing education fund to the General fund. These dollars were paid for by electrical contractors from across the state to offset costs related to education courses, seminars and registration fees for necessary ongoing and required training.
Pick up the daily paper and you will read more of the same. The Star Tribune reported today the Governor’s supplemental budget calls for $1.2 million to be taken from the state’s Water Recreation Account – funds generated by the 860,000 boaters in the form of fee and boat registration – and transferred to the General Fund. Projects that include boat ramps and canoe and boat route management get axed.
More and more of our dedicated funds are not finding their way to their original and intended purpose. Those paying into these various funds are left holding a broken piggy bank with less incentive to continue paying. They are angry and rightfully so. Allowing this practice is a dangerous precedent and will lead to further raiding of our dedicated accounts.

This past Monday I had the opportunity to sit in on a joint session of the Montgomery city council and school board. Montgomery successfully passed a school bond referendum this past December. There’s no question the Montgomery Lonsdale school district was in need of a new facility and it was clear the Superintendent, Board, and Council members were excited about the city building a new high school. As we talked about the state budget crisis and the $1.2 billion shortfall facing the upcoming legislative session, one message was quite clear. Montgomery, both school and city, is not in a financial position to make significant budget cuts. Since 2003, Minnesota state investment in schools has dropped an inflation-adjusted 13 percent and schools like Montgomery Lonsdale has had difficulty making ends meet.
The city faces similar financial strain. In 2009, Montgomery lost $71,353 in Local Government Aid (LGA) though unallotment. The 2010 cuts will total $164,408. Needed improvements for streets and infrastructure may have to wait. The weak economy has dramatically softened the real estate market and as local assessments continue to catch up to the effects of the economy, property values will continue to adjust. Last year, residential homestead property values overall fell in cities. On top of that, commercial and industrial property values are on the decline. As a result, cities could see more of the burden of their property tax levy shifting to homeowners in the foreseeable future.
How much more can we cut LGA to cities like Montgomery? What kind of community do we want to live in? How can we ensure our students are getting the best education if we continue to slash budgets while schools are barely holding on with a funding stream that relies on operating referendums? While schools can be placed on a failing list for not making Average Yearly Progress (AYP), perhaps we should place an entire state on the failing list for not properly investing in our students, our schools, and our communities. When a school is not making AYP, everyone rallies to address the problem. When a community sees the need for a new school, local citizens step up and deliver. We need that same effort, in bipartisan fashion, at the State Capitol come February.

The following report was written by Rob Hardy, school board chair for Cannon River STEM School, for northfield.org.

About 75 people gathered in the big room at ARTech charter school on Tuesday, January 5, for an evening of conversation with State Senator Kevin Dahle and State Representative David Bly. The main topic of the evening was education funding, and the impact on Minnesota public schools, and charter schools in particular, of the state budget crisis and the 27.5% holdback of state general education funds.

What is the 27% holdback? By statute, 10% of state per pupil education funding is held back from public schools in the state of Minnesota until after final enrollment figures are available for the school year. The money is generally paid to the schools in the first half of the following school year. This year, in an effort to address the state budget shortfall without raising taxes, Gov. Pawlenty increased the holdback to 27%. This means that 27% of the amount that schools have budgeted, and to which they are entitled according to the per pupil funding formula, is held back—payment to the schools is deferred.

This has put charter schools into a bind. Because 27% of their general education funding is being held back, schools are finding it necessary to secure loans in order to meet their expenses—to pay teachers. The interest payments then have to be included the school’s general education budget. In effect, funds that should have gone into the classroom are going into interest payments to banks—if, that is, the schools can secure loans at a time when banks are tightening credit.

Both legislators expressed their strong support for charter schools. The hard reality is that the state budget is facing a projected $5 billion shortfall in the next biennium. To this point, the stategy of Gov. Pawlenty has been to make cuts and accounting shifts, rather than to raise additional revenue.

See the entire story at http://northfield.org/

From the NDDC Website by Ross Currier: The Northfield Downtown Development Corportation E R Team (Economic Restructuring Committee) met with State Senator Kevin Dahle yesterday to talk about commercial property taxes. Our discussion focused on legislative action for 2010.

Commercial property taxes in downtown Northfield have risen over 300% in the past decade. At their current levels, they are literally threatening the economic viability of our historic commercial district as well as undermining small business retention, expansion, and recruitment.

Last year, working with Senator Dahle and Representative David Bly, the NDDC saw legislation to help address the commercial property tax issue in older commercial districts throughout Greater Minnesota introduced in both the Senate and House. With the challenge of balancing State revenues with expenditures during the session, the bills were not implemented.

There was another bill addressing commercial property taxes drafted in the Senate last year. This bill differed somewhat from our proposal, however, it would also have helped downtown Northfield.

At yesterday’s meeting, we decided to work with the other group of senators to draft and support a single bill to address commercial property taxes in both the Senate and House. Although the State continues to face financial challenges, we are hopeful that our unified efforts will achieve success in 2010.

A few weeks ago, I had my AP Students read an essay entitled “Bowling Alone,” by Robert Putnam. The premise of the essay is the idea that America is losing its social capital and that it has been on the decline for several years. Social capital refers to connections among individuals. It is the foundation for social communities.

Left intact, social capital has a stream of benefits, including safety and security, friendship and community, and a sense of civic identity. Putnam uses the analogy that even though more and more people are heading to the bowling alley these days, there is a decline in bowling leagues.

Politically speaking…voting, political knowledge, and grassroots political activism are all down. Americans sign 30 per cent fewer petitions and are 40 per cent less likely to join a consumer boycott, as compared to just a decade or two ago. Other social get-togethers have experienced a decline over the last 25 years. Attendance at club meetings have dropped 58 percent, family dinners are down 43 percent, and having friends over is down 35 percent since 1985 (Putnam 2000).
How far are we willing to go it alone? Have we lost our civic virtue? Have we lost our sense of community? As the state budget faces even more cuts, are cities and communities willing to let our hospitals and nursing homes close? Will we continue to invest in our schools, our main street, and our local food shelf? Do we care about our neighbors as fellow citizens? Is the mentality, “as long as I have mine” (insert job or health insurance here) the social norm?

Putnam states “a society of many virtuous but isolated individuals is not necessarily rich in social capital.” As a matter of fact, there is a range of evidence that communities with a good ’stock’ of such ’social capital’ are more likely to benefit from lower crime figures, better health, higher educational achievement, and better economic growth.

Yes, we can blame television, suburban sprawl, and the time constraints brought on with a two career family. However, generational change came out as a very significant factor. A “long civic generation,” born in the first third of the twentieth century, is passing from the American scene. Their children and grandchildren (baby boomers and Generation X-ers) are much less engaged in most forms of community life. For example, the growth in volunteering over the last ten years is due almost entirely to increased volunteering by retirees from the long civic generation.

As the New Year approaches, let’s consider what’s important to Minnesota: a state that embraces the importance of “the common good” and the virtues of civic responsibility and participation. This holiday season let’s not lose sight of our need to invest in social capital. Make time for the family meal, invite the neighbors over for some eggnog, attend a Holiday Concert, or make time to volunteer. And perhaps you can even find time to go bowling. Better yet, start a league.