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Back to basics

Lynn Reed, the Minnesota Taxpayers Association’s (MTA) executive director, has had an eventful year.

He covered a grueling five-month budget session with a shortened staff. He turned 55 in May. And after a summer of spiritual reflection, he has decided to leave his post and his paycheck at the end of this week to embark on an unpaid internship focused on religious devotion and youth mentoring in Kansas City. He and his wife, Laura, both native to Missouri, will start a three-month program on Jan. 4 at the multi-denominational Christian organization called the International House of Prayer (IHOP).

“It’s not something we feel we can do part time right now. We feel the need for this immersion,” says Reed, who notes the organization is not to be confused with the pancake restaurant chain with same acronym.

Reed will also start a consulting firm. He’s launching the Nehemiah Group, a small business advisory group that is accredited by the Institute for Independent Business.

But his focus will be on prayer and mentoring young people devoted to the IHOP’s mission of establishing centers of prayer that operate 24 hours a day, seven days a week. “It’s about are we being all we can be in helping young people be all they can be,” Reed says.

Succeeding Reed as MTA’s executive director will be Mark Haveman, an analyst at the Taxpayers Association, a St. Paul-based nonpartisan think tank established in 1926.

Reed joined the MTA in 1991 and became executive director in 2003 when the previous executive director, Dan Salomone, was appointed Revenue Commissioner by Gov. Tim Pawlenty.

The MTA is not neutral on the issues. For example, the group was outspoken in its opposition to dedicated state funding for the arts and the outdoors, even though some of the association’s members were in favor of the idea. But Reed says the group doesn’t twist legislators’ arms in the corridors of the Capitol to swing a bill in the direction of a particular client.

“It’s considered advocacy, I think that’s the term more than lobbying. … It’s sort of like grassroots lobbying is really what it is,” Reed says.

The MTA’s reports on tax and fiscal issues have been a catalyst for controversy under Reed’s tenure. In 2006, the MTA released a study of public pension funds in Minnesota. The report drew attention to financial problems with the state’s six largest pensions and prompted new financial disclosure laws regarding pensions. The report also put Reed on the receiving end of withering criticism from legislators on the Legislative Commission on Pensions and Retirement, who said the report didn’t emphasize the Pawlenty’s role in reforming the pension system.

Glenn Dorfman, the Minnesota Association of Realtors lobbyist who funded the MTA’s pension report, gives Reed high marks for taking the thorny and arcane pension issue to the Capitol.

“This state loves to study stuff but it doesn’t like implementation. … [Reed] deserves a great deal of credit,” says Dorfman, who is also an MTA board member.

Dorfman credits Reed’s technical skills on tax policy and his unflinching ability to handle heated debate. Dorfman says Reed will be missed at the MTA.

“He’s about the kindest human being I’ve met. … He demonstrates it all the time,” Dorfman says.

Reed says he’s a little burned out by some of the demands of the job. He notes the difficulty of funding an organization that doesn’t lobby its members own interests directly. He also notes the challenge of writing opinion pieces on complex tax policy issues for publication in daily newspapers.

“That’s where I have lost the fire,” Reed says.

But he retains his love of being part of the policy-making process at the Capitol, despite heated political tensions in recent years. The heated atmosphere at the Capitol isn’t surprising, Reed says, due to the difficult decisions involved in crafting the state’s $35 billion general fund budget.

“I think the tone has heightened a bit. It’s a little sharper than it used to be. It’s not something you can really quantify. But the money involved is so much more [than it used to be]. In that pure economic sense there is so much more at stake.”

Reed grew up in Boonville, Mo. He and Laura, who met while in college, have three children, ages 26, 29 and 32. They have five grandchildren in the Twin Cities from their eldest son.

One of the interesting things about Reed is he didn’t start out as a tax policy wonk: He attended the University of Missouri-Columbia and received a bachelor’s degree in anthropology.

Reed also started but didn’t finish a master’s degree in Renaissance and Reformation history.

At that point, a career in tax policy wasn’t an obvious choice.

“I was really, superbly prepared,” Reed says with a laugh.

On the side in college, Reed did public health research on the geographic differences in the risk of dying. He then put his name on a civil service job list. That landed him in Minnesota, when he was hired to work in the State Demographer’s office.

When Reed came to Minnesota in 1980, Al Quie, a Republican, was the governor and the state was mired in a budget crunch. His job in the demographer’s office was later eliminated, shortly after his third child was born.

He transferred into the Revenue department’s research office in 1981. Reed later worked for the nonpartisan Senate research office before joining the MTA in 1991.

In 1992, the MTA embarked on an in-depth property tax analysis. In 1996, the MTA launched its first 50-state property tax report. The MTA’s work made headlines when it reported Minnesota ranked highest in commercial, industrial and apartment taxes.

“We were shocked. … I think everybody was shocked,” Reed says.

The findings were a catalyst for the 2001 property tax reform passed during Gov. Jesse Ventura’s administration.

Reed expects changing demographics will force state lawmakers to take a hard look at Minnesota’s tax policy in the future. The aging baby boom population will start leaving the workforce, a trend that will have a major impact on the state’s revenue collections, he says. Moreover, the state’s 6.5 percent sales tax is only applied to a narrow range of goods, which limits the sales tax as a source of stable revenue.

“(The demographic situation) is very real. We’re not well positioned for that in Minnesota . The sales tax is the most problematical. But income is a worry. Our income tax structure is OK. It’s just we rely on it so heavily,” Reed says.

Reed is looking forward to focusing on his religious faith. He has contemplated his religious beliefs since a personal conversion in college.

From that point in his life, his beliefs became based on a basic belief in Jesus Christ. The rest has been an ongoing journey that he expects will only get deeper starting next month.

“I said ‘Yes, I do believe this.’ The implications of that are still working out,” Reed says.

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