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>> CAN'T TURN BACK THE CLOCK NOW.
NOW. >> AND A VIEWER FROM CLEARBROOK
>> AND A VIEWER FROM CLEARBROOK WANT TO TALK ABOUT WHY RAISE
WANT TO TALK ABOUT WHY RAISE TAXES WHEN WE HAVE A $1 BILLION
TAXES WHEN WE HAVE A $1 BILLION SURPLUS.
SURPLUS. THE VIEWER SAYS WITH A ARE THE
THE VIEWER SAYS WITH A ARE THE ODDS THE 2014 LEGISLATURE COUOU
ODDS THE 2014 LEGISLATURE COUOU SPEND ALL OF THAT MONEY AND
SPEND ALL OF THAT MONEY AND INSTEAD PUT SOME OF IT IN A DAY
INSTEAD PUT SOME OF IT IN A DAY FUND.
FUND. WHAT DO WE WANT TO DO WITH THE
WHAT DO WE WANT TO DO WITH THE SURPLUS?
SURPLUS? LET'S TAKE THAT.
LET'S TAKE THAT. >> LET'S ASSUME THERE'S A
>> LET'S ASSUME THERE'S A $1.1 BILLION SURPLUS, AND THERE
$1.1 BILLION SURPLUS, AND THERE COULD BE MORE, COULD BE LESS,
COULD BE MORE, COULD BE LESS, AND THAT'S WHAT WE ARE WORKING
AND THAT'S WHAT WE ARE WORKING OBEYED ON THE NOVEMBER NUMBERS.
OBEYED ON THE NOVEMBER NUMBERS. I THINK IT'S GOOD TO START THE
I THINK IT'S GOOD TO START THE RAINY DAY FUND, BUT KEEP IN MIND
RAINY DAY FUND, BUT KEEP IN MIND THE PREVIOUS LEGISLATURE FACED A
THE PREVIOUS LEGISLATURE FACED A $6 BILLION DEFICIT.
$6 BILLION DEFICIT. YOU COULD APPLY THAT RAINY DAY
YOU COULD APPLY THAT RAINY DAY FUND IN ONE FELL SWOOP AND HAVE
FUND IN ONE FELL SWOOP AND HAVE IT WIPED OUT.
IT WIPED OUT. YOU HAVE DISASTER EMERGENCY
YOU HAVE DISASTER EMERGENCY THINGS COMING UP AFTER AND YOU
THINGS COMING UP AFTER AND YOU HAVE TO CONSIDER IT.
HAVE TO CONSIDER IT. THERE'S GOING TO BE A DISCUSSION
THERE'S GOING TO BE A DISCUSSION ABOUT THE BUSINESS TO BUSINESS
ABOUT THE BUSINESS TO BUSINESS TAXES AND I'M IN FAVOR OF
TAXES AND I'M IN FAVOR OF EXAMINING THE FARM SERVICE
EXAMINING THE FARM SERVICE REPAIR TAX AND ALSO THE
REPAIR TAX AND ALSO THE BROADBAND OR THE
BROADBAND OR THE TELECOMMUNICATIONS EQUIPMENT TAX
TELECOMMUNICATIONS EQUIPMENT TAX WHICH IMPACTS BROADBAND IN
WHICH IMPACTS BROADBAND IN MINNESOTA.
MINNESOTA. I THINK IF I ANTICIPATE WHAT MY
I THINK IF I ANTICIPATE WHAT MY COLLEAGUES ACROSS THE TABLE
COLLEAGUES ACROSS THE TABLE MIGHT SAY, IT'S THAT YOU RAISE
MIGHT SAY, IT'S THAT YOU RAISE TAXES TOO MUCH, AND YOU SHOULD
TAXES TOO MUCH, AND YOU SHOULD GIVE THE MONEY BACK TO THEM.
GIVE THE MONEY BACK TO THEM. WELL, I THINK IN THE 8 OF THE
WELL, I THINK IN THE 8 OF THE LAST 10 YEARS, WE RESPONDED IN
LAST 10 YEARS, WE RESPONDED IN NEARLY EVERY EMPHASIS WITH
NEARLY EVERY EMPHASIS WITH CUTTING.
CUTTING. WE CUT BILLIONS OF DOLLARS, AS
WE CUT BILLIONS OF DOLLARS, AS YOU WELL KNOW.
YOU WELL KNOW. THAT'S ADVERSELY IMPACTED
THAT'S ADVERSELY IMPACTED SCHOOLS ACROSS MINNESOTA, LOCAL
SCHOOLS ACROSS MINNESOTA, LOCAL GOVERNMENT ACROSS MINNESOTA.
GOVERNMENT ACROSS MINNESOTA. IN THAT TIME WE HAVE SEEN
IN THAT TIME WE HAVE SEEN PROPERTY TAXES DOUBLE.
PROPERTY TAXES DOUBLE. A CUT REALLY ISN'T A UT IF YOU
A CUT REALLY ISN'T A UT IF YOU SHIFT THE COST ON TO SOMEONE
SHIFT THE COST ON TO SOMEONE ELSE.
ELSE. AN EXAMPLE OF THAT IS IN THE
AN EXAMPLE OF THAT IS IN THE HIGHER ED BUDGET WHERE STUDENTS
HIGHER ED BUDGET WHERE STUDENTS ARE PAYING TWO-THIRDS OF THEIR
ARE PAYING TWO-THIRDS OF THEIR TUITION COST RATHER THAN A THIRD
TUITION COST RATHER THAN A THIRD JUST A GENERATION AGO.
JUST A GENERATION AGO. YOU CAN'T JUST, I THINK, ASSUME
YOU CAN'T JUST, I THINK, ASSUME THAT FROM HERE ON OUT WE ARE
THAT FROM HERE ON OUT WE ARE GOING TO RUN BUDGET SURPLUS.
GOING TO RUN BUDGET SURPLUS. WE ARE GOING TO DEAL WITH PSYCH
WE ARE GOING TO DEAL WITH PSYCH LTS LIKE WE HAVE DEALT WITH IN
LTS LIKE WE HAVE DEALT WITH IN THE PAST, AND WE SHOULD BE
THE PAST, AND WE SHOULD BE CAREFUL IN HOW MUCH OF THE MONEY
CAREFUL IN HOW MUCH OF THE MONEY WE SEND BACK, AND PERSONALLY, IF
WE SEND BACK, AND PERSONALLY, IF THERE'S GOING TO BE SOME BACK,
THERE'S GOING TO BE SOME BACK, WE SHOULD TARGET IT TO MIDDLE
WE SHOULD TARGET IT TO MIDDLE CLASS TAX CUTS.
CLASS TAX CUTS. AND MAKE TAX RATES MORE
AND MAKE TAX RATES MORE PROGRESSIVE.
PROGRESSIVE. >> NONE OF THE MONEY IN THE
>> NONE OF THE MONEY IN THE BUDGET IS FREE.
BUDGET IS FREE. IT DIDN'T FALL OUT OF THE SKY.
IT DIDN'T FALL OUT OF THE SKY. WE HAVE TO RELY HEAVILY ON
WE HAVE TO RELY HEAVILY ON FEDERAL FUNDING TO SUPPORT OUR
FEDERAL FUNDING TO SUPPORT OUR BUDGET.
BUDGET. IF YOU RELY ON ALL THE BUDGETS,
IF YOU RELY ON ALL THE BUDGETS, IT'S GOING TO BE SHORT BY A
IT'S GOING TO BE SHORT BY A BILLION 4 COME 2021.
BILLION 4 COME 2021. JUST TO POINT OUT THERE'S SOME
JUST TO POINT OUT THERE'S SOME OF THESE CHALLENGES COMING TO
OF THESE CHALLENGES COMING TO US.
US. IT'S REALLY TEMPTING TO TAKE
IT'S REALLY TEMPTING TO TAKE MONEY YOU HAVE AND BUY THINGS
MONEY YOU HAVE AND BUY THINGS YOU WANT.
YOU WANT. BUT THE DECK GOES INTO THE BASE
BUT THE DECK GOES INTO THE BASE BUDGET AND EVERY YEAR THAT GOES
BUDGET AND EVERY YEAR THAT GOES FORWARD.
FORWARD. YOU HAVE TO GENERATE MORE MONEY.
YOU HAVE TO GENERATE MORE MONEY. IF YOU CAREFULLY LOOK AT THE
IF YOU CAREFULLY LOOK AT THE BUDGET ITEM FOR THE DIFFERENT
BUDGET ITEM FOR THE DIFFERENT TOPIC AREAS, YOU HAVE TO BE ABLE
TOPIC AREAS, YOU HAVE TO BE ABLE TO PAY FOR WHAT YOU DECIDED.
TO PAY FOR WHAT YOU DECIDED. THE HUMAN SERVICE FUND HAS
THE HUMAN SERVICE FUND HAS EXPLODED JUST LATELY WITH THE
EXPLODED JUST LATELY WITH THE EXPANSION OF THE MEDICAID
EXPANSION OF THE MEDICAID PROGRAM.
PROGRAM. JUST SO YOU KNOW, IN THE CUTS WW
JUST SO YOU KNOW, IN THE CUTS WW DID, WE CALL THEM CUTS, WE
DID, WE CALL THEM CUTS, WE REDUCED THE GROWTH BY HALF.
REDUCED THE GROWTH BY HALF. SO IN A TIME OF CRISIS, AND WE
SO IN A TIME OF CRISIS, AND WE DID SUCH A GOOD JOB THAT IT
DID SUCH A GOOD JOB THAT IT DIDN'T COME UP IN THE ELECTION,
DIDN'T COME UP IN THE ELECTION, WHICH IS UNHEARD OF.
WHICH IS UNHEARD OF. YOU CUT A BILLION DOLLARS A
YOU CUT A BILLION DOLLARS A YEAR, AND IT DOESN'T GET TURNED
YEAR, AND IT DOESN'T GET TURNED INTO A POSTCARD.
INTO A POSTCARD. IF YOU LOOK AT WHAT YOU ARE
IF YOU LOOK AT WHAT YOU ARE SPENDING YOU GET MORE MILEAGE
SPENDING YOU GET MORE MILEAGE OUT OF IT.
OUT OF IT. PEOPLE GOT BETTER SERVICES.
PEOPLE GOT BETTER SERVICES. SO THAT'S WHAT I THINK WE NEED
SO THAT'S WHAT I THINK WE NEED TO DO.
TO DO. EVEN THOUGH THERE'S A SURPLUS,
EVEN THOUGH THERE'S A SURPLUS, MAKE SURE EVERYTHING YOU ARE
MAKE SURE EVERYTHING YOU ARE BUYING IS SENSIBLE AND GOOD
BUYING IS SENSIBLE AND GOOD VALUE.
VALUE. THEN YOU CAN REALLY PUT THE
THEN YOU CAN REALLY PUT THE MONEY WHERE YOU CHOOSE TO GO.
MONEY WHERE YOU CHOOSE TO GO. IF WE DECIDE WE ARE GOING TO
IF WE DECIDE WE ARE GOING TO HAVE LOWER TUITION FOR PEOPLE TO
HAVE LOWER TUITION FOR PEOPLE TO GO TO COLLEGE WHICH IS A VERY
GO TO COLLEGE WHICH IS A VERY GOOD GOAL, AND HAVE MORE PEOPLE,
GOOD GOAL, AND HAVE MORE PEOPLE, ESPECIALLY THE MINORITIES BE ALL
ESPECIALLY THE MINORITIES BE ALL THAT THEY CAN BE.
THAT THEY CAN BE. SO PRUDENCE AND RESTRAINT IS
SO PRUDENCE AND RESTRAINT IS HARD TIMES IF YOU ARE A
HARD TIMES IF YOU ARE A LEGISLATOR.
LEGISLATOR. >> I WOULD BE IN FAVOR OF
>> I WOULD BE IN FAVOR OF REPEALING THE FARM EQUIPMENT
REPEALING THE FARM EQUIPMENT TAX.
TAX. TELECOM TAX, BUT THE WAREHOUSE
TELECOM TAX, BUT THE WAREHOUSE TAX.
TAX. IF WE DID A EARLY TAX BILL, THE
IF WE DID A EARLY TAX BILL, THE WAREHOUSING COMPANIES COULD GET
WAREHOUSING COMPANIES COULD GET A LITTLE MORE CERTAINTY AND
A LITTLE MORE CERTAINTY AND COMFORT.
COMFORT. >> IT'S ACTUALLY BEEN ENACTED
>> IT'S ACTUALLY BEEN ENACTED BUT IT'S NOT IN EFFECT YET.
BUT IT'S NOT IN EFFECT YET. >> THEY COULD BE CERTAIN OF
>> THEY COULD BE CERTAIN OF THEIR BUSINESS STRTCTURE GOING
THEIR BUSINESS STRTCTURE GOING FORWARD.
FORWARD. YOU TALKED ABOUT PROPERTY TAXES,
YOU TALKED ABOUT PROPERTY TAXES, AND AFTER THE REPUBLICAN BUDGET
AND AFTER THE REPUBLICAN BUDGET WAS ENACTED WE SAW THE LOWEST
WAS ENACTED WE SAW THE LOWEST AVERAGE GROWTH IN LEVIES IN 15
AVERAGE GROWTH IN LEVIES IN 15 YEARS, SOMETHING LIKE THAT, AND
YEARS, SOMETHING LIKE THAT, AND THIS YEAR HAVEN'T BEEN CERTIFIED
THIS YEAR HAVEN'T BEEN CERTIFIED YET.
YET. BUT FOUR OUT OF FIVE CITIES HAVE
BUT FOUR OUT OF FIVE CITIES HAVE SIGNIFICANT INCREASES IN THEIR
SIGNIFICANT INCREASES IN THEIR PROPERTY TAXES AND WE WILL GET
PROPERTY TAXES AND WE WILL GET THE NUMBERS AT THE END OF MAY.
THE NUMBERS AT THE END OF MAY. IN SPITE OF ALL THE SPEND AND
IN SPITE OF ALL THE SPEND AND TAX YOU DID FOR CITIES, LGA,
TAX YOU DID FOR CITIES, LGA, PROPERTY TAXES ARE LOCALLY
PROPERTY TAXES ARE LOCALLY CONTROLLED.
CONTROLLED. THEY MAKE THE DECISIONS.
THEY MAKE THE DECISIONS. LEGISLATURE HAS MARGINAL IMPACT
LEGISLATURE HAS MARGINAL IMPACT ON PROPERTY TAXES.
ON PROPERTY TAXES. BUT AS FAR AS THE SURPLUS, I
BUT AS FAR AS THE SURPLUS, I THINK WE NEED TO REPEAL THE
THINK WE NEED TO REPEAL THE BUSINESS TO BUSINESS TAXES AND
BUSINESS TO BUSINESS TAXES AND FEDERAL CONFORMITY AND WE ARE
FEDERAL CONFORMITY AND WE ARE ONE OF THE FEW STATESSTHAT HAS
ONE OF THE FEW STATESSTHAT HAS THE MARRIAGE PENALTY.
THE MARRIAGE PENALTY. THE FEDS DON'T EVEN HAVE IT.
THE FEDS DON'T EVEN HAVE IT. WE ARE ONE OF TWO STATES THAT
WE ARE ONE OF TWO STATES THAT HAVE A GIFT TAX PENALTY.
HAVE A GIFT TAX PENALTY. WE DON'T ALLOW EMPLOYER TUITION
WE DON'T ALLOW EMPLOYER TUITION TO BE DEDUCTED.
TO BE DEDUCTED. IT'S COUNTED AS INCOME AND DON'T
IT'S COUNTED AS INCOME AND DON'T ALLOW ADOPTION EXPENSES TO BE
ALLOW ADOPTION EXPENSES TO BE DEDUCT DEDUCTED.
DEDUCT DEDUCTED. MINNESOTA TAXES IT AS INCOME
MINNESOTA TAXES IT AS INCOME EVEN THOUGH THE FEDS DON'T ALLOW
EVEN THOUGH THE FEDS DON'T ALLOW IT.
IT. THERE ARE PRACTICAL THINGS WE
THERE ARE PRACTICAL THINGS WE CAN DO FOR MINNESOTA FAMILIES
CAN DO FOR MINNESOTA FAMILIES WITH THAT MONEY.
WITH THAT MONEY. >> I PROPOSE WE BE CONSERVATIVE
>> I PROPOSE WE BE CONSERVATIVE WITH THE SURPLUS AND SHOW
WITH THE SURPLUS AND SHOW RESTRAINT AND GET OFF THE
RESTRAINT AND GET OFF THE REVENUE ROLLERCOASTER THAT HAS
REVENUE ROLLERCOASTER THAT HAS PLAGUED MINNESOTA FOR THE LAST
PLAGUED MINNESOTA FOR THE LAST DECADE AND THAT'S WHEN THE 2013
DECADE AND THAT'S WHEN THE 2013 LEGISLATIVE SESSION WAS SO
LEGISLATIVE SESSION WAS SO IMPORTANT.
IMPORTANT. IF WE MAKE PRUDENT CHOICES
IF WE MAKE PRUDENT CHOICES MOVING FORWARD, WE ARE GOING TO
MOVING FORWARD, WE ARE GOING TO BE ABLE TO TALK ABOUT EDUCATION
BE ABLE TO TALK ABOUT EDUCATION REFORM, AND INVESTING IN
REFORM, AND INVESTING IN INFRASTRUCTURE AND ROADS AND
INFRASTRUCTURE AND ROADS AND BRIDGES AND TELECOM.
BRIDGES AND TELECOM. ALSO I THINK WHAT WE NEED IS A
ALSO I THINK WHAT WE NEED IS A COMPREHENSIVE DISCUSSION TAX
COMPREHENSIVE DISCUSSION TAX REFORM ON MINNESOTA.
REFORM ON MINNESOTA. THOSE CONVERSATIONS ARE
THOSE CONVERSATIONS ARE DIFFICULT TO HAVE WHEN YOU ARE
DIFFICULT TO HAVE WHEN YOU ARE GOING BUDGET DEFICIT TO BUDGET
GOING BUDGET DEFICIT TO BUDGET DEFICIT.
DEFICIT. I'M REALLY OPTIMISTIC THAT
I'M REALLY OPTIMISTIC THAT DECISIONS WE MAKE IN 2013 WILL
DECISIONS WE MAKE IN 2013 WILL OPEN THE DOOR TO MEANINGFUL
OPEN THE DOOR TO MEANINGFUL CONVERSATIONS ABOUT THOSE SORTS
CONVERSATIONS ABOUT THOSE SORTS OF REFORMS.
OF REFORMS. IF WE LOOK AT FEDERAL TAX
IF WE LOOK AT FEDERAL TAX CONFORMITY, THOSE BUSINESS TO
CONFORMITY, THOSE BUSINESS TO BUSINESS TAXES CLEARLY, YOU
BUSINESS TAXES CLEARLY, YOU KNOW, WE CAN DO BETTER THINGS
KNOW, WE CAN DO BETTER THINGS THAN IMPOSE THOSE, AND I THINK
THAN IMPOSE THOSE, AND I THINK IT'S CLEAR THAT THAT WAS A
IT'S CLEAR THAT THAT WAS A MISTAKE FOR 2013 AND I THINK
MISTAKE FOR 2013 AND I THINK IT'S IMPORTANT FOR US TO ADMIT
IT'S IMPORTANT FOR US TO ADMIT THAT.
THAT. I THINK WE CAN FIX IT EARLY.
I THINK WE CAN FIX IT EARLY. WHEN YOU LOOK AT THE IMPACT OF
WHEN YOU LOOK AT THE IMPACT OF 2013 AND 2014 MOVING FORWARD, WE
2013 AND 2014 MOVING FORWARD, WE BALANCE THE BUDGET ONCE AND FOR
BALANCE THE BUDGET ONCE AND FOR ALL.
ALL. WE ARE ABLE TO GET PAST THE
WE ARE ABLE TO GET PAST THE PARTISANSHIP AND THE SHORT-TERM
PARTISANSHIP AND THE SHORT-TERM BUDGET.
BUDGET. I DON'T THINK WE CAN OVER STATE
I DON'T THINK WE CAN OVER STATE THE IMPORTANCE OF THAT SESSION
THE IMPORTANCE OF THAT SESSION WHAT IT'S GOING TO MEAN FOR US
WHAT IT'S GOING TO MEAN FOR US MOVING FORWARD.
MOVING FORWARD. HOPEFULLY WE ARE ABLE TO DO A
HOPEFULLY WE ARE ABLE TO DO A SLOW GROWTH CURVE IN TERMS OF
SLOW GROWTH CURVE IN TERMS OF OUR INVESTMENTS WHETHER IT'S
OUR INVESTMENTS WHETHER IT'S FUNDING EDUCATION AND HAVE A
FUNDING EDUCATION AND HAVE A MORE MEANINGFUL PARTNERSHIP SO
MORE MEANINGFUL PARTNERSHIP SO THEY CAN PREDICT WHAT THE STATE
THEY CAN PREDICT WHAT THE STATE IS GOING TO CONTRIBUTE IN TERMS
IS GOING TO CONTRIBUTE IN TERMS OF AIDS AND TAX ACCORDINGLY.
OF AIDS AND TAX ACCORDINGLY. REVENUE ROLLERCOASTER WE ARE ON,
REVENUE ROLLERCOASTER WE ARE ON, THAT'S SOMETHING WE NEVER WANT
THAT'S SOMETHING WE NEVER WANT TO REPLICATE WE ARE IN.
TO REPLICATE WE ARE IN. PRUDENT BUDGETING AND HANDLING
PRUDENT BUDGETING AND HANDLING THE SURPLUS IN A RESPONSIBLE WAY
THE SURPLUS IN A RESPONSIBLE WAY IS GOING TO SET US UP FOR
IS GOING TO SET US UP FOR SUCCESS.
SUCCESS. >> SENATOR BENSON MENTIONED THE
>> SENATOR BENSON MENTIONED THE MARRIAGE PENALTY.
MARRIAGE PENALTY. I WANT TO POINT OUT I HAVE BEEN
I WANT TO POINT OUT I HAVE BEEN WORKING VERY HARD TO AVOID THE
WORKING VERY HARD TO AVOID THE MARRIAGE PENALTY.
MARRIAGE PENALTY. REPRESENTATIVE ABELER MENTIONED
REPRESENTATIVE ABELER MENTIONED THEY CUT A SIGNIFICANT AMOUNT OF
THEY CUT A SIGNIFICANT AMOUNT OF MONEY IN THE PREVIOUS BIENNIUM,
MONEY IN THE PREVIOUS BIENNIUM, AND IT WENT UNNOTICED, AND ONE
AND IT WENT UNNOTICED, AND ONE OF THE REASONS IT WENT UNNOTICED
OF THE REASONS IT WENT UNNOTICED THE ONLY THING ANYBODY TALKED
THE ONLY THING ANYBODY TALKED ABOUT OR ONE OF THE MAJOR THINGS
ABOUT OR ONE OF THE MAJOR THINGS THAT WAS TALKED ABOUT IN THE
THAT WAS TALKED ABOUT IN THE LAST ELECTION, BILLIONS OF
LAST ELECTION, BILLIONS OF DOLLARS WERE SHIPPED AWAY FROM
DOLLARS WERE SHIPPED AWAY FROM THE K-12 SCHOOLS.
THE K-12 SCHOOLS. WHEN WE CAME INTO THIS
WHEN WE CAME INTO THIS LEGISLATIVE SESSION, WELL, I
LEGISLATIVE SESSION, WELL, I MEAN, I UNDERSTAND THE SCHOOLS
MEAN, I UNDERSTAND THE SCHOOLS WILL GET THEIR MONEY BACK, BUT
WILL GET THEIR MONEY BACK, BUT IN THIS YEAR WE BALANCE THE
IN THIS YEAR WE BALANCE THE BUDGET FOR TWO YEARS AND I THINK
BUDGET FOR TWO YEARS AND I THINK SENATOR SCHMIT IS TOTALLY RIGHT,
SENATOR SCHMIT IS TOTALLY RIGHT, YOU HAVE TO BE ON SOLID
YOU HAVE TO BE ON SOLID FINANCIAL FOOTING IF YOU WANT TO
FINANCIAL FOOTING IF YOU WANT TO MAKE THE LONG-TERM DECISIONS.
MAKE THE LONG-TERM DECISIONS. >> 15 SECONDS ON THE SCHOOL
>> 15 SECONDS ON THE SCHOOL SHIFT.
SHIFT. >> THE SCHOOL SHIFT, THEY DIDN'T
>> THE SCHOOL SHIFT, THEY DIDN'T PAY IT BACK.
PAY IT BACK. IT WAS A GOOD TALKING OPPONENT
IT WAS A GOOD TALKING OPPONENT FOR THE ELECTION.
FOR THE ELECTION. BUT WHEN IT CAME DOWN TO IT,
BUT WHEN IT CAME DOWN TO IT,