The E-Democracy Gubernatorial Debate: How to keep Minnesota competitive

Most middle-class Minnesotans and their families expect to thrive, not just survive. Based on the dozens of questions we’ve received, many Minnesotans are feeling squeezed by taxes and fees, fuel and energy costs, housing costs, and tuition on one side and the lack of income growth on the other. Whether the lack of income growth is speculatively based on a mix of global pressures of outsourcing, immigration, and higher corporate profits or benefit costs, many Minnesotans feel the squeeze each month as expenses rise.

What is your perspective? How will Minnesotans be better positioned by your Administration to compete globally and enjoy a high quality of life? What are your top three or four priorities or initiatives that will help more Minnesotans fight the squeeze over the long-term?

Mike Hatch
As Attorney General I have fought hard to hold HMOs, pharmaceutical companies, predatory lenders, energy companies and other special interests accountable to middle class consumers.

As Governor, I will stand-up for middle-class Minnesotans.

The same cannot be said for Governor Pawlenty.

Middle class families are finding it harder to make ends meet because of skyrocketing health care costs, increased college tuition, and excessive property tax increases.

Over the last four years, middle-class Minnesotans have seen:

* Health care out of pocket costs increase by over 50%.

* Property taxes increase by 59%.

* College tuition increase by more than 50%.

My top four priorities as Governor for addressing the middle class squeeze are the following:

* Reduce Health Care Costs_I will work to make health care more affordable because the cost of health care should not make Minnesotans sick. As Attorney General, my audits of HMOs and hospitals showed that 40% of our health care dollar is wasted on overhead. As Governor, I will work to ensure that we reduce health care costs so that middle class Minnesotans are able to afford health care.

* Make College Tuition More Affordable_I will close a nearly $300 million tax loophole that allows corporations to hide profits overseas, and I will use every dollar of savings to rollback college tuition. By the end of my first term in office, I want to ensure that every Minnesotan who wants to attend college will not use cost as an excuse.

* Provide Property Tax Relief_ I will work to provide property tax relief so that homeowners will see the benefit. Property taxes are one of the most regressive forms of taxation as they hit middle class and lower income homeowners the hardest. As Governor, I will work diligently for local property tax relief so homeowners are not taxed out of their house and homes.

* Support All Day Kindergarten—I will work to ensure all day kindergarten for our children. Our children should not suffer a learning gap because we did not adequately prepare them and educate them for life as an adult. Investing in early education is the best and most cost effective way to address the achievement gap.

Through initiatives like the ones above, middle class Minnesotans will begin to feel less pinched and more secure.

Peter Hutchinson
As I have traveled all over the state and met tens of thousands of Minnesotans, they have spoken to me about both their hopes for the future and their anxieties about whether that future will be prosperous and secure for themselves and their children. There are four priorities on which we must focus to ensure that prosperity:

1. Reform Health Care: It is the single greatest threat to our economic well-being. Our comprehensive plan saves state & local governments $1.7 billion a year by slashing administrative costs and reducing unnecessary or ineffective care by 50 percent. Our plan then reinvests some of those savings to ensure that every Minnesotan gets affordable, basic health care coverage. Reforming health care will have the most positive impact on the financial well-being of Minnesota’s families and businesses.

2. Strengthen Education: If health care costs are the brake on our economy, then education is the engine that will fuel our long-term prosperity. To strengthen our education system so that the coming generations are prepared to succeed in the 21st century, we must ensure that:

- every “at risk” child in Minnesota receives high-quality early childhood education
- every child has access to all-day, every-day kindergarten
- every child receives a year’s worth of learning for each year in school
- the high school graduation standards match the MNSCU admission standards, so that our graduates are not spending time and money taking remedial classes

3. Fix our Transportation System: Minnesotans are wasting time stuck in their cars and spending money dealing with the wear and tear caused by so many “Pawlenty potholes” on our roads. We need to pass again the 2005 transportation bill that contained responsible, pay-as-go financing for investments in roads and transit.

4. Budget with Integrity: As Minnesotans are feeling the economic squeeze at home, they are also being deceived by both parties into thinking that the state budget is balanced. Using gimmicks and borrowing that former Governor Arne Carlson has rightfully called “Enron accounting,” the DFL and GOP have compromised our fiscal integrity. We must return to giving Minnesotans straight talk about the financial situation of the state and engage them in making the challenging decisions about how we spend the price of government they are willing to pay.

Ken Pentel
1. We need a strong ecological ethic.

If Minnesota becomes a model for: Local-efficiency renewable energy, local sustainable organic farming, walkable-planned cities, zero discharge or persistent toxic pollutants, we will start to restore our natural resources and be a magnet for the builders and students toward a sustainable future.

We will no longer be working for waste in the systems AND we will recycle billions of dollars in our local communities.

This planning will cap the cost of living which will reduce the stress in our lives, creating more time for friends, family, creative and civic time.

2. I want to end poverty in MN.

This can be done by establishing a: living wage based upon the cost of living. Full housing to end homelessness, single payer universal healthcare, and free higher education. This is not pie-in-sky. We have many models in MN the US and around the world that could lead us to this goal.

3. Reduce the work week to 36 hours.

If we reduce the cost of living, reward local economies over global trade, and end poverty, then we can start to reduce the hours we need to work in a week.

4. I want to end low expectations

Most of the people I meet want stable communities, health and happiness, yet we are conditioned to accept a political and economic system that is leading us on a path of lower expectations based on the political choices we have.

If we want less stress in our lives and a strong economy for the future then we must remove corporate control of our government and establish a multi-party proportional political system. This will not be perfect but, we can at least have our government act more for the common good rather than just for profit and unlimited growth.

Surely earth and our local economies will continue to get gutted unless we have higher expectations and greater courage to achieve a government by and for the people.

If you agree with this I need your vote to line-up with your values to gain leverage into the system.

Ending slavery, woman’s right to vote, labor laws, social security, the Civil Rights Act are all tied to third party movements.

An honest vote is never a wasted vote.

Tim Pawlenty
Minnesota has one of the strongest middle classes in the nation. Keeping it that way starts with holding government accountable, so families can keep more of the money they earn.

Unfortunately, Mike Hatch and Peter Hutchinson don’t see it that way. They support general tax increases and oppose my plan to freeze property taxes. That’s wrong.

Our government is already experiencing double-digit revenue growth, while the paychecks of average Minnesotans are not going up that fast. Government should be able to live within those revenues and fund key priorities like education and health care.

Minnesota is not an “undertaxed” state. From Rudy Perpich to the present, every governor has aspired to get Minnesota out of the top ten in taxes. Thankfully and for the first time in decades, we’ve been able to move Minnesota out of the top ten in taxes as a percent of personal income. The result has been an economic recovery, creation of nearly 120,000 new jobs, and bringing unemployment to one of its lowest levels in five years.

In addition to holding down taxes, we need to bring reform and accountability to education. Over the past two years, we’ve funded our schools at near record levels. While I support additional funding for our schools, we also need accountability for better results. Though my opponents oppose my plan, I will work to ensure that at least 70% of school funding gets to the classroom.

We also know that what gets measured gets done. That’s why I’ve successfully led the effort to demand more accountability and better results from our schools. This has included improving our school standards, making our high school graduation test tougher, adding more challenging classes, making the high school curriculum more rigorous and relevant to the economy of the future, emphasizing reading, science, math and other core subjects, and leading the nation in efforts to transform education to a performance pay – rather than a seniority pay – system.

We must also tackle rising health care costs. During my term we led the way on prescription drugs by helping Minnesotans import safe prescriptions from Canada and by calling for a two-year ban on all prescription advertising while we examine the cost impacts. With limited space here, I urge readers to take a look at my earlier E-Debate response on health care.

Rebuttal from Ken Pentel
Among the responses by my opponents there is nothing mentioned about our over consumption and ecological stress, and how this contributes to social and economic stress. If we do not look at policy holistically, or interconnected, then we cannot resolve our problems.

I read nothing from the other candidates about how are democracy is obsolete, based on the winner-take-all system , big money, and massive lobby influence.

If we continue to allow our representatives and candidates to ignore, or deny the need to fix our democracy we will continue to be deceived into thinking they have, or can, create a society based on justice for all.

Most people tell me that candidates are decided in advance of elections, and our government is bought and paid for.

Governor Pawlenty harps on taxes, taxes, taxes; I agree in less taxation. But, his policies generally support less taxes for his friends and donors while his corporate friends dump their nuclear waste, garbage, pollution, sprawl on endless generations. Who’s paying the tax on that Governor and compliant democrats?

Just one example, not one of the candidates has talked about shutting down the Prairie Island and Monticello Nuclear reactors. We are boiling water for 30 years and leaving behind 250,000 years of nuclear waste. So, our generation has a electricity binge, boiling water for thirty years to create steam.

We then rationalize leaving future generations with the hot plutonium and radioactive materials for 250,000 years. Now, collectively, they are left working hundreds of millions of hours out of their lives to manage and payoff this waste because of our generations ignorance and arrogance and greed. Who’s budgeted for that? How much are the taxes?

And think of the natural resources we could have protected and local economy all those wasteful nuclear dollars could have been spent for, such as; efficient renewable energy.

It’s not taxes that are the problem, it’s why we’re raising taxes, and what we’re using them for that matters.

It’s like a job. Just to say we created a job means nothing if the work comes back to haunt the community or planet. The question should be; is it a meaningful job that leads to sustainability?

In regards to the question, I feel we need to stop looking at the need to be competitive, or compete globally in the economy, as a primary objective.

As a proportion, overwhelmingly, our lives are based on cooperation. The habitats and animals we share this planet have been very cooperative, and continue to be, even in the face of the disrespectful plundering my opponents generally prop-up and encourage.

Also, the most stable, socially just, and less violent cultures, are those that see our relationship to the earth, neighbors, and globally community as a shared experience and responsibility.

This is not to dismiss the need to challenge ourselves to become better people, but competitiveness is a weak starting point for health and endurance.

Rebuttal from Peter Hutchinson
As I said in my original submission, if Minnesota is going to be competitive, it’s going to take 4 things, reforming healthcare, I mean really reforming healthcare, and I would encourage everyone to go to our website www.teammn.com and look at our healthcare proposal. It is certainly the most comprehensive and detailed proposal out there. Strengthening education, the same is true there our education plan is on the website. Fixing our transportation system, that too is on our website, and budgeting with integrity so we don’t have any more gimmicks borrowing, or what former governor Arne Carlson called, Enron Accounting. Doing these four things will have a huge effect on the prosperity of our state.

As I read the responses from Tim Pawlenty and Mike Hatch I’m struck that in neither case do we get answers to the questions: what will it take, how will we get it done, how much will it cost, and how will we pay for it. Proposals that lack this level of specificity, I think really lack credibility as a means to undergird the prosperity of our state. It’s not enough to have good intentions. Those good intentions have to be backed up with specific ideas and directions for how we can accomplish important goals, and I fear that in both Tim Pawlenty and Mike Hatch’s case we are missing that kind of specificity. With respect to Tim Pawlenty in particular, I’m very struck, in fact I think it is ironic, that he speaks about allowing families to keep more of the money they earn when he refuses to commit to a rebate of the excess money the state has collected already this last year. This so called surplus belongs to the taxpayers, the people who sent the money in. It ought to be returned to them or it ought to be used to pay down the irresponsible debt that has built up under governor Pawlenty’s watch to fund transportation when he refuses to raise sufficient revenues to meet our transportation needs. I’m also struck that he describes me as supporting a general tax increase when this is simply not the case. I don’t think lying is an appropriate substitute for healthy debate, and I hope that he will retract this serious misstatement. I am a supporter of raising the gas tax in order to improve our highways, and I’ve not been afraid to say so. That certainly doesn’t constitute a commitment to a general tax increase.

I also think that his proposals to freeze property taxes, and to require that 70% of school funds go to classrooms are very simplistic and won’t do any of the things that he promises. The cap on property taxes will only drive local governments to use more fees and hidden revenue sources, when tax revenue is a much more sensible and honest way to raise the money. The so-called 70% solution for schools is nothing more than turned school superintendents in to full time accountants. The average in Minnesota today is 69%. So in affect what the governor is proposing is to raise our commitment to the classroom from all the way from 69% to 70%. A 1% solution is by no means nation leading or bold, when we have many more serious problems we have to overcome in our schools, including the fact that over 1/3 of our high school graduates, that is youngsters with a high school diploma, are required to take remedial courses when they get to college. Cutting that to zero, that would be bold, that would be nation leading, and that’s what we have proposed in our education plan. As to Mike Hatch’s proposals, as I said earlier, they lack the kind of specificity that is necessary to think of them as credible. All are good intentions, but how are they to be realized? In addition, it is not at all clear how Mike Hatch proposes to pay for any of these ideas. His so called $300million tax loophole he himself described as only a $100million just last week on Minnesota Public Radio. Are we to assume anything credible about the likelihood of revenue being available to meet these good intentions? In short, my concern is that all candidates for governor should be expected to make clear what they want to do, how they want to do it, and how they would pay for it. Short of that, I don’t think any of these proposals are credible.

Thank you for listening, I look forward to the next portion of our e-debates.

Rebuttal from Mike Hatch
On Monday, October 16, many homeowners will be paying their second half of the year property taxes. For the last four years, Minnesota homeowners have bore the burden of extreme property tax hikes under Governor Pawlenty.

Property taxes are one of the most regressive forms of taxation as they hit middle class and lower income homeowners the hardest. As Governor, I will work diligently for local property tax relief so homeowners are not taxed out of their house and homes.

Under Governor Pawlenty, property taxes have increased by 59%.

Total Homestead Property Tax Collected
FY 2002 - $1,871,272,447
FY 2006 - $2,975,871,864

Total # of Homesteads Taxed
FY 2002 - 1,326,153
FY 2006 - 1,399,782

Average Homestead Tax
FY 2002 - $1,411
FY 2006 - $2,126

Growth from FY ‘02 to FY ‘06 - 59.0%

- All Data from MN Dept. of Revenue Abstract of Assessments & MN Dept of Revenue Abstract of Tax Lists

As the chart below describes, previous Republican, Independent and Democratic Governors over the last 35 years have not put homeowners at risk through such large increases.

Name and Term of Governor(s) - Growth in Net Property Taxes Over 4 Years in Nominal Dollars
(Source: MN Dept of Revenue)

Governor Anderson (1971-1975) - $143.1 million
Governors Anderson/Perpich (1975-1979) - $297.6 million
Governor Quie (1979-1983) - $642.6 million
Governor Perpich (1983-1987) - $653.4 million
Governor Perpich (1987-1991) - $948.3 million
Governor Carlson (1991-1995) - $818.6 million
Governor Carlson (1995-1999) - $329.6 million
Governor Ventura (1999-2003) - $429.1 million
Governor Pawlenty (2003-2007) - $1,672.8 million
(includes estimate for 2007 based on MN Dept of Finance Data)

Governor Pawlenty has already raised taxes by $2,981 per household based on his own data if you include increased taxes, fees and college tuition increases. If you don’t adjust these numbers for inflation, the figure is $6,827 per household.

Middle class families are finding it harder to make ends meet because of skyrocketing health care costs, increased college tuition, and excessive property tax increases.

Over the last four years, middle-class Minnesotans have also seen:

* Health care out of pocket costs increase by over 50%.

* College tuition increase by more than 50%.

* User fee increases of over one billion dollars.

Again, my top four priorities as Governor for addressing the middle class squeeze are the following:

* Reduce Health Care Costs_I will work to make health care more affordable because the cost of health care should not make Minnesotans sick. As Attorney General, my audits of HMOs and hospitals showed that up to 40% of our health care dollar is wasted on overhead. As Governor, I will work to ensure that we reduce health care costs so that middle class Minnesotans are able to afford quality health care.

* Make College Tuition More Affordable_I will close a $300 million tax loophole that allows corporations to hide profits overseas, and I will use every dollar of savings to rollback college tuition. By the end of my first term in office, I want to ensure that every Minnesotan who wants to attend college will not use cost as an excuse.

* Provide Property Tax Relief_ Property taxes are one of the most regressive forms of taxation as they hit middle class and lower income homeowners the hardest. As Governor, I will work diligently for local property tax relief so homeowners are not taxed out of their house and homes.

* Support All Day Kindergarten—Our children should not suffer a learning gap because we did not adequately prepare them and educate them for life as an adult. Investing in early education is the best and most cost effective way to address the achievement gap.

Besides closing the Foreign Operating Corporation tax loophole, which will recover $300 million to roll back college tuition, I will pay for the initiatives above by aggressively pursuing the collection of over $1 billion of uncollected state taxes that the Legislative Auditor reported to the Pawlenty Administration. The Legislative Auditor’s report has been all but ignored by Governor Pawlenty.

Through initiatives like the ones above, middle class Minnesotans will begin to feel less pinched and more secure.

Thursday: Rural and Small Towns