The Owatonna People's Press (OPP) Editorial 6/18 noted on True North and elsewhere is remarkable in one aspect. First, let me quote the entire piece. It is that good.
When it comes to pointing fingers and passing blame for the budget stalemate in St. Paul, Gov. Mark Dayton has done well. In fact, it has become for him almost an art form. But the truth of the matter is that if anyone is digging in his heels and not budging in the budget negotiations, it is the governor himself.
Consider: On Thursday, GOP legislative leaders presented the governor with yet another proposal. In an effort to solve the budget crisis and avert a government shutdown, the Republicans offered to drop their call for $200 million in tax cuts if the governor would abandon his call for $1.8 billion in tax increases. What’s more, they said that if the governor agreed, the money raised from eliminating those tax cuts would be spent on Mr. Dayton’s priorities — education, the environment, transportation, Local Government Aid, and flood and disaster relief.”
The governor’s reaction? No deal.
In fact, the governor went so far as to call it a “non-proposal” and compared the Republican’s actions to rearranging deck chairs on the Titanic. Well, if the GOP leaders are rearranging the chairs, then surely Gov. Dayton must be the iceberg itself — frozen to a proposal and not willing to change.
For all of his posturing about the Republicans being unwilling to compromise, the governor misses the point that his loyal opposition has compromised — several times, in fact. The governor started with a $38 billion budget proposal while the Republicans countered by saying they wanted to keep spending at the current level of $30 billion. In the time since those initial salvos, the GOP-controlled Legislature has presented the governor with a $34 billion budget.
Do the math. Which of the two has gone halfway to solve the budget crisis?
We doubt that the governor — who has taken a “my way or the highway” approach — will change his tune. And if he doesn’t, he will only have himself to blame.
Notice that while published as an editorial it's actually a very factual account of the situation. It could have been published as a news article but for the more punchy prose allowed in an editorial. You can argue it clearly sides with the Republican point of view, but there are not two equal sides to this story as this OPP piece reports. Only the Governor can and apparently will shut down the government.
Meanwhile, most media continue to carry the DFL non-messages of needing to compromise, reach a balanced solution, and tax high earners for the sake of fairness. To be fair, their coverage has largely been accurate, surprisingly so given how other issues like Voter Id consistently get DFL-favorable reports. But little snippets still leak through, like "Cooler heads may yet prevail in this year's impasse." in the Minneapolis Star Tribune recently. The only "hot head" is Governor Mark Dayton, the only one with the veto power to create this impasse.
News articles published as editorials? Editorials woven into news articles? No wonder so many Minnesotans are as yet confused on what is so obvious once explained as the OPP did so well.
"Notice that while published as an editorial it's actually a very factual account of the situation."
Not really.
"The governor started with a $38 billion budget proposal while the Republicans countered by saying they wanted to keep spending at the current level of $30 billion."
Technically, perhaps the governor's initial proposal was 39 billion, but that assumed an immediate payback of the shift which nobody assumed would happen. Taking out the shift brings the governor's proposal down to 37 billion. On the GOP side, I don't recall that it was ever the position of the party that spending should be limited to 30 billion, although surely that was the opinion of some members in it. I think the GOP position throughout could be summed up as "living within our means", "spending what's in the checkbook". The projected figure for what will be in the checkbook is 34 billion dollars, and that's where the GOP budget number is today.
State spending in the current biennium is 34 billion or possibly 32 billion, depending on how you look at it, but not 30 billion. The 34 billion includes the shift, the 32 billion figure does not. I wondered about this discrepancy and in fact got a Republican house member to explain it to me. What he told me was that state accounting is on a cash, as opposed to an accrual basis. That means that money is count as spent when the cash is actually transferred, not when the obligation to pay the cash assumed or accrued. It's like when you issue a check to pay a debt. When is the debt actually paid? When received by the creditor, or when the creditor cashes it? It's a valid way of looking at it, but not the only valid way of looking at it. An obligation to pay, in practical, if not an accounting timing, way is pretty the same thing as making a payment. I always assume my checks will be cashed.
By the way, the other two billion dollars the state spent that Owatonna doesn't count as state spending is the federal stimulus money. Republicans usually but not always count this as state spending. If a Republican tells you that we have had a 6% increase in state spending, they are counting the stimulus money. If a Republican, like Phil Krinkie for one, tells you that we have had a 12% increase, they aren't counting the stimulus money.
Posted by: Hiram | Sunday, June 19, 2011 at 03:57 PM
A nice job of artful dodging, like applying private sector accrual accounting to public sector cash accounting. GASB is forcing more accrual analysis these days, but this is just guidance. The MN Constitution deals only in cash.
Another key point is that to be taken seriously, Dayton's compromise offer must include a promise not to simply return in a year or two for the rest.
Posted by: Speed Gibson | Sunday, June 19, 2011 at 06:05 PM
"A nice job of artful dodging, like applying private sector accrual accounting to public sector cash accounting."
I don't know that it was my intent to dodge anything. The distinction between cash and accrual accounting was made to me by a Republican legislator. And let me make it clear, while I do have a limited familiarity with these concepts, I am no accountant and no expert on the issue. I would be grateful if others add to my understanding of the issue. I do acknowledge that Speed is in fact vastly more knowledgeable than I am on matters of finance.
Nevertheless, I do suggest that the reason accrual analysis is becoming more widely used in the private sector is that it gives a more useful picture of finances. For example, when I write a check, it's far easier an more useful to consider that the money is already gone from my account, then continue to assume it's there until the cash is cashed.
Generally Accepted Accounting Principles, GAAP, are useful, not because they are true in some sense, but because they are generally accepted. They allow us to compare apples with apples, oranges with oranges. GAAP accepts both accrual and cash accounting methods. They are simply give us different perspectives on the same underlying financial situations. But no matter how you look at it, that 1.8 billion dollars was spent and the state is on the hook for it. Which is the more useful perspective for us as taxpayers who are concerned about our state's future, the one that recognizes that important and undisputed fact or the one that doesn't?
Posted by: Hiram | Sunday, June 19, 2011 at 06:26 PM
The problem, I suspect, with the GOP offer is that it isn't an elimination of 200 million dollars in tax cuts, it's an elimination of 200 million dollars in proposed tax credits. There is no particular reason to think that eliminating proposed tax cuts will increase projected revenue, and thereby address the 1.8 billion dollar that separates Gov. Dayton, and the Republicans in the legislature.
Posted by: Hiram | Monday, June 20, 2011 at 07:06 AM
Let me put it this way. In attempting to understand state finance, a daunting task indeed, we aren't bound by the assumptions of others. The fact that the state, for reasons of it's own, adopts one method of accounting doesn't mean we have to. If there is a better way of looking at things, there is nothing stopping us from choosing that option.
That said, there is nothing inherently wrong with choosing to look at things on a cash basis. The Republican argument often is framed in these terms: "You haven't gotten a six per cent pay increase, why should the state?" That argument itself is flawed because it confuses spending with revenue. The state isn't receiving six per cent more, it's spending six per cent more. Actually, state revenues are increasing by 12 percent, an undisputed number which for some reason you don't hear much about from Republicans.
Is state government 12% larger? Has it hired 12% more workers? Have teachers gotten 12% pay increases? Isn't it reasonable to think that a state which has increased it's revenue by 12% should also increase it's spending by 12%? Is that not "living within our means"?
Posted by: 21 | Monday, June 20, 2011 at 09:14 AM
"News articles published as editorials?"
News has become editorial. It's the New Journalism. My old journalism prof is spinning in his grave at what has become of media. The facts are usually buried on the jump page, 16th paragraph. Editors know people glean the majority of their news from headlines and they spin their web based on biases which are rarely challenged.
Posted by: The Big Stink | Monday, June 20, 2011 at 09:22 AM
The piece above raises the whether editorials should be subject to the standards of reporting. The easily checked numbers were wrong, and talking points, and not Republican talking points incidentally, were published without adequate sourcing or review.
Throughout this process, the problem a lot of people have been having is that Republican public posturing has often been intentionally disingenuous and deceptive. The education stuff for example. The Republican "compromise" offered money that they didn't have and aren't going to get in negotiations. The recent business about elimination of taxes suggests without saying that they are adding 200 million in revenue, closing the 1.8 billion gap to 1.6 billion. It doesn't but that's what the Owatonna editorialist fell for.
Posted by: Hiram | Monday, June 20, 2011 at 10:07 AM
So, what I'm reading, Hiram, is regardless of the facts, someone is always wrong. It's an interesting take on life: Everyone's opinion is a faulty assumption because no one can know the relative nature of the facts.
If you were my Philosophy prof in college I would march to the Registrar's Office and demand my money back and an apology.
Posted by: The Big Stink | Monday, June 20, 2011 at 11:25 AM
What I am kind of saying is that no one is wrong here. Cash basis accounting is a perfectly legitimate way of doing things. The question I raise is whether it's the best way of doing things. Does it give us the clearest and most useful understanding of what the legislature is doing? There isn't anything relative or disputed about the fact that the legislature borrowed 1.8 billion dollars from our schools. The question I am raising is whether an accounting perspective that includes that fact is more useful than one that ignores it?
The poor Owatonna guy was just taken for a ride. You just have to understand the significance between elimination of a proposed tax credit, and an increase in tax revenue.
Posted by: Hiram | Monday, June 20, 2011 at 11:46 AM
Here is a time line posted by the Republicans. Note how there is no claim that a single one of their "compromise" offers has reduced the 1.8 billion gap between the governor and the Republican majority by one single dollar.
http://scr.bi/jtmqV9
Here is a link to an op-ed piece from House Speaker Zellers and Republican Senate leader Koch. It's quite lengthy. Notice that in all this prose, they do not offer to reduce the 1.8 billion dollar gap between the governor and themselves by one single dollar. And that none of the "compromise" efforts they proposed would have done that.
http://www.twincities.com/ci_18301959?IADID
These facts aren't relative; they are absolute.
Posted by: Hiram | Monday, June 20, 2011 at 12:14 PM
Concerning relativity of facts, here is a link to Sen. Chamberlain's recent facebook posting:
http://tinyurl.com/432sncm
He claims state spending was 30 billion, pretending apparently, that the 2 billion in stimulus money the state spent went unspent.
There is confusion here, but I am not the one promulgating it.
Posted by: Hiram | Monday, June 20, 2011 at 01:04 PM
"someone is always wrong."
For myself, I don't believe that. Cash and accrual accounting are either right or wrong. They are simply different ways of looking at the same thing. It's like watching a Twins game from box seats or on TV. Neither is right nor wrong. Rightness and wrongness is in fact a quality either is capable of having. They are simply different, each useful and valuable in their individual ways.
In political arguments, I don't usually see things in terms of right or wrong, moral or immoral. I don't think Republicans are "wrong" categorically in the views they hold, and I don't think those views or the people who hold them are immoral. I think they have a variety of arguments, some stronger than others. And they have a number of criticisms of my arguments, some more valid than others. I don't make those arguments or criticisms myself, it's not my job to make the other guy's case for them, but I certainly could, and there are times when I have propped up the other side's argument for them, when they don't make it well enough to give us the understanding of an issue we need.
I have often noted, that many people on the other side of arguments I engage in do not share these views. They think their views are not just the best views, but objectively the right views. They very often don't seem to see the merit of arguments on the other side of issues. And they are eager to claim that those who disagree with them are not just wrong, but immoral or in violation of fundamental principles. They claim a monopoly on truth and wisdom. That's something I understand and have learned to work with, but I make no such claims for myself. Some on my side do, I suppose, but let's just say I view them with impatience, and actually, often with contempt.
Posted by: Hiram | Tuesday, June 21, 2011 at 06:20 AM
Here's the point, Hiram: Yes, there are two sides to every argument. You consistently tend to hold them both. Your arguments tend to give weight to the middle. That's not wrong, but it drives some of us to consider sucking on our exhaust pipes.
Posted by: The Big Stink | Tuesday, June 21, 2011 at 08:55 AM
"You consistently tend to hold them both."
I often see merit in both, but in this instance, I firmly come down on the side of an accrual basis as the best way to view our financial state.
I do find this criticism curious. In my own self-image, I see myself as having a lot of pronounced and well defined opinions. Do any other issues on which I have straddled the fence come to mind? This is distinct by the way from efforts I make at coalition building. I want to get things done, and that often involves finding common ground, and working with people I disagree with on many issues.
Posted by: Hiram | Tuesday, June 21, 2011 at 09:29 AM
Can we get to the big picture, please? The alleged Governor has planned to create a government shutdown, and to make it as painful as possible, for purely political purposes. His dereliction of duty in actually participating in the budget process is well documented bordering on outrageous.
Any rational examination of the Republican budget will see it is a compromise that spends far more than was spent in the previous year, especially on Dayton's supposed priorities. Dayton's budget, on the other hand, doesn't really exist, since his original budget failed almost unanimously in the Legislature in January and he has not submitted another. There is nothing to compromise WITH, no one to negotiate WITH, and no one, it seems, who stop Dayton's nefarious political game-playing. The only thing that will end it is getting out the truth. Credit the OPP with starting the process.
Posted by: J. Ewing | Wednesday, June 22, 2011 at 12:55 PM
"The alleged Governor has planned to create a government shutdown, and to make it as painful as possible, for purely political purposes."
One thing is clear enough to me. The shutdown planned by the governor could be a whole lot painful then seems to be in the works.
"Any rational examination of the Republican budget will see it is a compromise that spends far more than was spent in the previous year, especially on Dayton's supposed priorities. Dayton's budget, on the other hand, doesn't really exist,"
That is categorically false. There are perfectly rational examination of the Republican budget that show it does not spend more in the current biennium, when according to one perfectly sound accounting method the state spent 34 billion dollars, roughly the amount Republicans want to spend in the next biennium.
"Dayton's budget, on the other hand, doesn't really exist, since his original budget failed almost unanimously in the Legislature in January and he has not submitted another."
By that reasoning, the GOP budget doesn't exist just like the DFL budget because it wasn't enacted into law either. By the way, it is incorrect to say that Dayton's budget was rejected in January. If memory serves, it wasn't issued until mid-February. I have no specific recollection that it ever did come to the floor in the legislature.
"There is nothing to compromise WITH, no one to negotiate WITH, and no one, it seems, who stop Dayton's nefarious political game-playing."
What can I say? Mark Dayton is the governor. He is the man the voters of Minnesota have chosen to lead this state. He is man from whom the legislature must secure agreement if it, and in fairness, the governor are to fulfill their oaths under the constitution.
Are you under the impression that we don't have a governor? That Mark Dayton is just some sort of governor shaped object?
Posted by: Hiram | Wednesday, June 22, 2011 at 01:53 PM
"Are you under the impression that we don't have a governor? That Mark Dayton is just some sort of governor shaped object?"
In practical terms, that is exactly correct. He seems determined to create a shutdown, and the few explanations given are either political or rhetorical. The legislature did its work; the Gov-thing refused to sign it and continues to plan for a painful shutdown-- documented fact. He has the power to resolve that issue at any time, but he won't even call the legislature into session to negotiate. You are correct he has the power, but let him take 100% of the blame as well.
Posted by: J. Ewing | Thursday, June 23, 2011 at 11:28 AM
"He seems determined to create a shutdown."
He is determined to raise taxes on the top two percent wage earners. Surely, you must understand no DFLer wants to shut down government. We love government.
If the legislature did it's work on the budget show me where it a appears in the session laws of Minnesota.
https://www.revisor.mn.gov/laws/?view=session&year=2011&type=0
I simply do not know why Republicans are calling for a special session at this time. Without a budget deal, or even any movement towards a budget deal, what could possibly be the point?
Posted by: Hiram | Thursday, June 23, 2011 at 12:34 PM
The point of a special session would be that the GOP could pass their bills again and give the Governor a chance to sign them this time, preventing a shutdown. Pretty simple, IMHO. Or, they could offer the Gov-thing a little give and take, as they've already done, and pass a slightly altered budget that would let him save face.
Posted by: J. Ewing | Thursday, June 23, 2011 at 10:17 PM
"The point of a special session would be that the GOP could pass their bills again and give the Governor a chance to sign them this time, preventing a shutdown."
There has been no change in the positions of the parties, therefore no reason to think that the outcome of the special session would be any different from the outcome of the regular session. I literally have no idea why the Republicans are asking for this. It simply makes no legislative or political sense.
Certainly the leadership can negotiate with the governor, but they don't need to call back the legislature to do that. It's not a question of saving face. No one cares about Mark Dayton's face, and I really think Republicans put themselve on the wrong track when they personalize this stuff. He is famously indifferent to that sort of thing. It's about what right for the people of Minnesota.
Posted by: Hiram | Friday, June 24, 2011 at 06:18 AM
Hiram, what's right for the people of Minnesota - at this point in time - is a shutdown. Dayton needs it and without it, the Republicans have no principle to stand on.
This is the moment. Deal with it.
Posted by: The Big Stink | Friday, June 24, 2011 at 10:23 AM
The Republican Party and I disagree with you on that.
Posted by: Hiram | Friday, June 24, 2011 at 01:20 PM
It takes two parties to strike a deal. The GOP has made a compromise offer, and two or three more compromises on top of that. The other party in this supposed cooperative venture refuses to consider anything proposed.
Posted by: J. Ewing | Friday, June 24, 2011 at 02:28 PM
The compromise. When this process started the governor was at 39, the GOP was at 34. Since the governor has dropped to 37 and then to 35.8 where he is now. In response the GOP has refused to budge from 34. There simply has been no effort to compromise on the part of the Republicans. Republicans have not made a proposal that would close the gap between the parties by as much as one single dollar.
Posted by: Hiram | Friday, June 24, 2011 at 03:07 PM