Mr. Dahle Goes to St. Paul

The past few weeks allowed me a chance to visit with several groups about a range of issues.  The University of Minnesota College of Education and  and Human Development held a forum in Northfield a few weeks ago with several educational leaders from the area in attendance.  The discussion focused on quality teaching and how higher education must work diligently and directly with school districts to make sure high quality educators are the norm and not the exception.  The college has a long range plan to improve teacher effectiveness by connecting ongoing research to teacher programs.  The programs will focus on improving teacher support, strengthening curriculum, diversifying the teacher workforce, adaptive teaching, enhanced student teaching experiences, while measuring student progress.  It seems like the right approach to “education reform” in an area that has received a lot of attention recently.

Last week I attended the Northfield Rotary Club meeting luncheon.  Representative Bly talked about the recent legislative session and provided our thoughts on some of the budget issues that the state will face in the next biennium.  It was a great meeting with a super bunch of local individuals who have our community’s best interests at heart.

This Saturday I will be attending a meeting in Waterville with the Waterville Lakes Association.  They have some concerns about the DNR’s plans to possibly designate Lake Tetonka as a Muskie  lake.  The State DNR is considering several sites and are gathering feedback from local citizens about future plans.  The Sportsmen’s Clubs, Darkhouse and Angling groups are also weighing in on the issue.  The DNR will not make any final decisions until later this year, but are wanting to get the dialogue going this summer.

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.

Growing up, the Public Library was always one of my favorite stops when headed downtown. It provided a lot of fond memories. I recall the joy in reading every one of the books in the Hardy Boys series. Having completed that goal, I even started reading the Nancy Drew mysteries (although I never shared that with the neighbor kids). Signing your name to the library card was always a source of pride and satisfaction. Seeing classmates, neighbors, town folks both young and old, gathered at the library was a comforting part of my childhood, an experience I will happily pass on to my own children.
Yesterday, I attended the grand opening of the Lonsdale Public library. Judging by the number of people in attendance, you knew that this brand new facility, with both library and a beautiful new community room, was a popular and welcome addition to their town. Neighbor to the Three Links Care facility, it provides a great space for citizens of all ages to come together to share not only the joy that books can bring, but a reason and opportunity to visit and share time with each other.
While the Northfield Carnegie Library will be celebrating its 100th anniversary this April, the brand new Lonsdale library becomes only the 2nd new library to be built in Minnesota in the past year. That is a great accomplishment. Whether brand new or a century old, the town library strengthens a community through literacy, providing access to information, intellectual freedom, and fostering lifelong learning and enrichment.
At a time when community budgets become strained due to economic realities, we need to do whatever we can to support these valuable community assets. The services, programs, and resources, and memories they provide are too valuable to take for granted.

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.

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.

What is the cost of not paying for mental health care? What is the cost of turning our backs on persons with mental disabilities? What is the cost of failing to provide community support for some of our most vulnerable citizens?
This past Wednesday I had the privilege to sit down with my friends at the Friendship House in Faribault. Among the two dozen or so persons present were consumers, case managers, the director, clinical psychologists, case managers, social workers, and a couple of legislators. The discussion touched on a variety of topics, but the concerns kept coming back to adequate state funding. As a state we must continue to find the resources to support organizations like Friendship House. Success is more likely if an individual has access to a combination of medication, supportive counseling and community support services, including education and vocational training. Working to keep those with mental disease out of our Psychiatric hospitals saves millions of dollars while providing dignity and a basic quality of life. It’s a small price to pay.
Friendship House continues to provide the supportive environment in which mental health consumers can socialize, and provide and receive support. With our help, educating and informing the public, employers, and policy makers, a higher value will be placed on recovery and the quality of life that a person with a severe mental illness can achieve.

I’d like to extend a note of thanks to the people and local officials in our area who extended their hospitality to members of the Minnesota Senate Capitol Investment Committee, who recently came to Northfield as part of a regional tour to consider plans for improvements and new construction at a number of sites.

The Senate group gathered in Northfield for a presentation by Minnesota Department of Transportation officials detailing that agency’s statewide proposals. I had an opportunity to speak to the group about our $520,000 bonding proposal to help finance a new transit station and Park & Ride. The proposed facility provides several amenities in one location. With the proposed Laurel Court site, it would provide easy access to Minnesota Highways 19 & 3. The location also provides connections to Mill Towns Trail, bike paths, and sidewalks providing interconnectivity throughout the City of Northfield. In addition, it would provide a convenient future connection for commuters to and from the Twin Cities and Rochester areas.

I know that the senators who visited our area appreciated the warm welcome they were given, as well as a good first-hand look at our proposals.

A recent editorial criticized the House and Senate DFLers for raising taxes. What the editorial failed to mention is the fact that both the House and Senate cut spending more than the Governor. The editorial goes on to criticize a House plan that “eliminates deductions on…most astonishing – mortgage interest.” It’s unfortunate that the editorial board failed to do some homework on this House provision. A closer look reveals the truth about the mortgage interest deduction proposal.

First of all, the bill does NOT impact the federal mortgage interest deduction, which represents most of the tax benefit for homeowners. It only impacts the much smaller state portion, and in a positive way for most. The House tax bill converts the mortgage interest deduction into a credit so that all taxpayers qualify for an equal percentage tax benefit.

Consider the following scenarios:

A married couple, $40,000 of income, $75,000 home, and working hard to pay about $6000 in mortgage interest. They don’t have enough other deductions; therefore, they don’t itemize. Their current state tax benefit is $0. Under the House proposal they will get a credit of $140.

A married couple, two kids, $100,000 of income, $200,000 home – relatively modest for their income, paying about $13,000 a year in mortgage interest. Their current state tax benefit equals about $400. Under this proposal, they’ll get a credit of $420 or $20 more.

Married couple, two kids, $100,000 of income, paying about $25,000 in mortgage interest. Their current law gives them a state tax benefit of $1,180. Their home is worth twice as much as the first example but their state tax benefit is three times as big! Under this proposal, they’ll get the same $420 credit as the married couple in the $200,000 home. Under current law, the bigger the home, the higher the income, the bigger the benefit – the House proposal reforms this impact.

Married couple two kids, $500,000 of income, million-dollar home, paying mortgage interest of $60,000. Under current law they receive tax benefits of $1,750. Under the House proposal, they would receive $420.

The bill creates a credit that provides the same benefit for everyone, up to $10,000 of interest. The Senate tax bill does not include this proposal. They do have a provision that would eliminate the mortgage interest deduction on a second home. Fifteen states do not have a mortgage interest deduction at all. The House proposal is similar to what is currently in place in Wisconsin.

I am not sure what the final tax bill’s provisions regarding mortgage interest will look like when it arrives on the Governor’s desk. Given the enormous budget deficit facing the state, subsidizing $1 million mortgages is no longer affordable. I would hope the correct information regarding the House and Senate budget plans are reported accurately so proper discussion can ensue.

On Thursday, the Minnesota Senate set targets to resolve the budget deficit. Last week we received the final budget forecast which gives us the most accurate picture of the kind of revenue Minnesota can expect over the next several years. It may not come as a surprise to know that the news is not pretty. We are in one of the worst economic downturns in recent memory.
I would like to respond to my constituents who have criticized the legislature for not presenting its own budget in a timely manner. Every Senator and every Representative has been working on this issue from the start. There is a complex array of factors involved when making budget decisions that affect so many Minnesotans. Difficult and gut wrenching cuts will be made that affect our elderly, the disabled, our children, and the poor. Budgets impacting cities and towns, police and fire protection, libraries and homeless shelters are being considered. Farmers, veterans, small and large business owners, nurses, and college students will be affected. Each cut comes with tentacles that reach deep into other programs. We, as legislators, are not only listening to what the public has to say, but also striving to understand the consequences of each cut. Given the choice between a hastily assembled budget for expediency sake and one that represents deep consideration to those affected, I believe my constituents would prefer the latter.
Some have criticized our desire to take time and listen to Minnesotans as a meaningless excursion. I attended one of these sessions in Burnsville where nearly 300 citizens attended (6500 persons attended similar sessions statewide) to weigh in on the budget process, sharing their hopes and fears, concerns, and advice. The old, the young, the strong and the frail, and some of our most vulnerable citizens welcomed the opportunity to say a few words to members of the legislature. We listened. In a representative democracy, if we cease to listen, we cease to represent. That experience, more than anything, gave meaning to the tough decisions that stand before us.
The Senate DFL plan balances the budget and addresses the long-term budget problems. It does not raid the Health Care Access Fund that providers pay into to help those who have difficulty paying their medical bills. Seven percent across-the-board cuts ensure that no one group unfairly shoulders the entire burden. Our difficult choices will save owners from increased property taxes, which have skyrocketed to almost 70% from 2002-2008, mainly because of cuts in Local Government Aid.
I have never criticized the Governor’s budget. There may be much I do not agree with, but I realize that we will need to recognize the same factors that went behind his decisions as we hope he does ours. These difficult economic times call for compromise and cooperation and the opportunity for all citizens to have a say in the process every step of the way. In two months the legislature will adjourn. We welcome input from Minnesotans on proposed solutions. As we have done so successfully in the past…let’s figure this out together.