What happened to not a penny more?
During last summer's protracted budget debate; conservative lawmakers developed the slogan "Not a Penny More" to push back against Gov. Dayton's billion dollar tax increase proposal. The phrase was a commitment not to grow general fund spending more than 12 percent from the previous budget.
The 34 GOP House members that pledged they would not approve any budget solution beyond $34 billion went to great lengths to make their opposition to more state spending clear. They formed the Not a Penny More Caucus, had members wear penny lapel pins and plastered their office doors at the state capitol with posters stating "Not a Penny More." This group of budget watchdogs carried the day; but in the end, Gov. Dayton vetoed all but one of the dozen GOP spending bills.
The governor's veto of the GOP budget bills lead to many weeks of protracted budget discussions and the longest shutdown of government in state history. In the end; Republican lawmakers held to their commitment not to raise taxes but did concede to the governor's demand for an additional $2 billion in spending.
The final budget resolution was to defer more payments to schools and use future tobacco payments to balance the budget. Conservative lawmakers demand for "not a penny more" was toppled by Gov. Dayton's demand for billions more in state spending.
The start of the 2012 session has brought an onslaught of demands for increased state revenue. But in a strange turn of events, a number of bills that grow government revenue are coming from Republican lawmakers -- not the usual crowd of Democrats. Even more unusual, some of those same lawmakers who printed posters and wore penny lapel pins just eight months ago are now authoring legislation which would increase taxes by hundreds of millions of dollars.
What makes this role reversal even more perplexing is the fact that the most recent budget forecast indicates that there is a $876 million budget surplus.
With almost a billion dollar surplus, why are some of the same state lawmakers who chanted "Not a Penny More" now supporting legislation that would increase state revenues?
Strange things happen at the Capitol, but this defies logic.
It started with looking for a way to finance a new Vikings stadium. One proposal is to place slot machines at two metro locations: Canterbury Park and Running Aces. It has been estimated that the new tax revenue from the slot machines could bring in over $100 million annually to state government. This often coined Racino legislation has been debated in the legislature for years. Connecting Racino dollars to stadium funding just combined two bad ideas.
Yet another proposal in the works would fund a new Vikings stadium with electronic pull tabs. The electronic pull tab concept is estimated to increase revenues to the state by $72 million annually. But the new tax-and-spend Republicans aren't stopping at growing government with a mere $172 million increase in gambling revenues.
Two GOP lawmakers recently held a press conference to announce they want a $1.29 per pack tax increase on cigarettes. Rochester lawmakers Sen. Carla Nelson and Rep. Mike Benson are claiming that a tax increase on cigarettes will deter children from purchasing cigarettes and prevent them from becoming addicted to smoking.
Currently the legal age to purchase tobacco products in Minnesota is 18 years old; reasoning would conclude that this means the state of Minnesota has a problem enforcing the law, not that cigarettes are too cheap. So what is the motive behind Sen. Nelson and Rep. Benson's tobacco tax increase? Is their goal to increase state revenue by $160 million a year or do they believe higher taxes will change people's smoking behavior?
Republicans' desire to increase state revenue doesn't end with gambling and cigarettes. Republican House Tax Chairman Rep. Greg Davids recently stated that he supports Gov. Dayton's call to collect sales taxes on all internet purchases. When asked about the slogan "Not a Penny More" in a Politics in Minnesota article Davids said: "As a rule, I don't sign pledges, they're saying you don't go a penny more than $34 billion. Well I'm saying, at current rates, there may be a little more money after the next forecast, and I would like to put those dollars into local government aid or schools. But I'm not going to raise the tax rate." Yet the proposal he supports to collect sales tax on all online purchases would generate as much as $200 million a year in state revenue.
If you weren't counting, the estimated total of new revenue proposed by Republican lawmakers since the start of the session would add more than a billion to the next biennial budget. Conservative lawmakers' demand for "Not a Penny More" appears to have been replaced by some Republican lawmakers' demand for millions more in state revenue. With new legislative boundaries to be announced soon, it will be interesting to see whether conservative Dr. Jekyll or tax-and-spend Mr. Hyde shows up to ask for endorsement from their constituents.
Phil Krinkie, a former eight-term Republican state rep who chaired the House Tax Committee for a while, is president of the Taxpayers League of Minnesota. GOP Gov. Tim Pawlenty recently appointed Krinkie to the board of the MinnesotaStateColleges and Universities (MnSCU) system. You can contact him at: firstname.lastname@example.org.