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The 2012 legislative session should be unlike any in recent memory. That’s in part because there is no budget deficit to erase. The surprising December budget forecast — showing a surplus of nearly $900 million — removes the primary point of contention between DFL Gov. Mark Dayton and the GOP-controlled Legislature.

The politics of Session 2012

New Senate Majority Leader Dave Senjem faces a tricky political landscape. As a moderate with a reputation for favoring compromise, he faces a caucus dominated by freshman legislators with staunchly conservative views. (Staff photo: Peter Bartz-Gallagher)

Surplus, redistricting, stadium push promise a legislative year unlike the Great Stalemate of ’11

The 2012 legislative session should be unlike any in recent memory.

That’s in part because there is no budget deficit to erase. The surprising December budget forecast — showing a surplus of nearly $900 million — removes the primary point of contention between DFL Gov. Mark Dayton and the GOP-controlled Legislature. Barring a significant reversal in the state’s revenue collections, there will be no replay of the 2011 standoff over whether to balance the state’s books by increasing taxes or cutting services.

The other distinctive factor is redistricting. Legislators do not yet know what their districts will look like or whom they will be running against. But every seat will be up for re-election in 2012.

“Philosophically, ideologically and electorally, I think these guys want to get in, do whatever business they need to do, and get out and get back to the campaign trail,” said Mike Franklin, a lobbyist with Lockridge Grindal Nauen. “That should be any majority’s goal in an election year, particularly a redistricting year: Make as few enemies as possible and head [into the] election as unscathed as you can be.”

Charlie Weaver, executive director of the Minnesota Business Partnership, expresses a similar sentiment. “There’s really not much they have to do,” Weaver said. “I think by and large most of these people want to find out what their map is and go home.”

That means the 2012 legislative session should prove shorter and less rancorous than any in recent years. A new stadium for the Minnesota Vikings, bills for constitutional amendments and a bonding package will be the main focus. Legislative leaders have suggested that they want to finish their business by Easter. Of course, those plans may ultimately prove as realistic as the Easter Bunny.

But many other factors remain unknown about the legislative session that kicks off next week. Here are some dynamics to watch:

How will the change in Senate leadership alter political dynamics at the Capitol?

Senate Majority Leader Amy Koch’s sudden resignation last month, owing to a relationship with a Senate staffer, upended expectations at the Capitol. It was followed by the firing of communications director Michael Brodkorb, whose tenacity and influence at the Capitol exceeded what’s typically associated with such a post. The Senate caucus ultimately replaced its entire leadership team in a tense, 11-hour closed-door meeting.

New Senate Majority Leader Dave Senjem faces a tricky political landscape. As a moderate with a reputation for favoring compromise, he faces a caucus dominated by freshman legislators with staunchly conservative views. With tough re-election campaigns looming for many senators, those tensions could be exacerbated. “I think maybe the caucus as a whole will be a little more strident in their viewpoints because of a little bit of a distrust of leadership and because it’s an election year,” said Kevin Goodno, a former Republican legislator who now heads the government relations team at Fredrikson & Byron.

How contentious will discussions over the size of a bonding bill become?

Republicans took control of the House and Senate in 2010 in part by demonizing capital investment projects as wasteful pork spending. That makes enacting a large bonding bill in 2012 politically dangerous. “That was their theme for 2010: Democrats blow all of your money borrowing, and they raised their pay to do it,” recalled Mike Kennedy, the Senate DFL’s campaign strategist.

Dayton and legislative leaders have indicated support for some kind of capital investment package. Their difference is over scope. This week Dayton unveiled a list of proposed projects approaching $800 million — as currently projected in the state’s economic forecast — and has made it a principal plank of his economic agenda.
GOP legislative leaders have suggested that they will seek a significantly smaller package of capital investment projects. At a legislative preview session earlier this month, Senjem indicated that roughly $400 million worth of projects seemed appropriate, with an emphasis on flood control, transportation and wastewater treatment.
House Speaker Kurt Zellers was less specific about what his caucus might be willing to support. “It would be safe to say that our members — seeing that debt service is one of the fastest growing budget items in our budget — spending a billion dollars on bonding this year is not something that they have an appetite for,” Zellers said. “Zero is not enough. A billion is too much.”

Is there the political will to spend roughly $600 million on a Vikings stadium in an election year?

Dayton has stressed for months that building a new Vikings stadium is a top priority. But for all the deliberations (and breathless media coverage), there remains no agreed-upon location or funding source. That makes passing a bill in an election year — with public polling indicating widespread opposition to public financing of professional sports stadiums — seem unlikely.

“I think it’s an uphill battle,” Goodno said. “I think that before it will happen, they need a solid local partner and a solid financing plan. Then they have the challenge of getting enough votes.”

The issue looks particularly fraught for Republicans, many of whom came into office preaching a populist anti-tax message. Spending taxpayer dollars to support a billionaire’s private business doesn’t exactly fit with the Tea Party rhetoric many espoused on the campaign trail. “It certainly seems that, philosophically, the Republicans have a difficult needle to thread there,” Franklin said. “It’s their base that tends to be most philosophically opposed to what they’re trying to do.”

Will tribal gaming interests successfully thwart any expansion of gambling?

Any potential Vikings stadium proposal is inextricably linked to an expansion of state-sponsored gambling, whether by allowing casinos at the state’s two horse tracks, permitting electronic pulltabs in bars or developing a downtown Minneapolis casino. The option chosen will hinge on how big the state’s stadium contribution needs to be. If it’s in the $300 million range, revenue from e-pulltabs might suffice.

But if the state share is significantly larger, racino might be the only economically viable option. Such an effort would run smack into vigorous opposition from tribal gambling interests and their squadron of lobbyists. While the tribes have traditionally been viewed as staunch DFL allies, they have made significant efforts in the past year to give their presence at the Capitol a more Republican hue. Among the lobbyists working on their behalf: former state Republican Party Chairman Chris Georgacas and former GOP legislator Chris DeLaForest.

Which proposed constitutional amendments will make it to the ballot?

Voters are already slated to decide whether to adopt a prohibition on gay marriage in November. But at least five other potential constitutional amendments could be on the agenda. That means Republicans will need to winnow down their wish list. “Three may be the magic number,” Senjem said at the legislative preview session. “Certainly four, five, six — I think that would be a little heavy.”

If that’s the prevailing sentiment, it would leave two slots up for grabs. Senjem strongly suggested that requiring photo identification at the polls would be on the agenda. “One that seems easy in our caucus is the voter ID,” he said. “The rest we’re going to have to talk about for a while.” He reacted more coolly to a proposal to require a legislative supermajority to raise taxes. “Instinctively and fundamentally, I don’t like to budget through the Constitution,” he said, “but I can be convinced.”

Three other proposals could also gain traction. Proponents of adopting retention elections in judicial contests are planning a vigorous lobbying push, but they face strident opposition from Senate Judiciary Chairman Warren Limmer. Rep. Tony Cornish, chairman of the House Public Safety Committee, and other gun advocates want to enshrine the right to bear arms in the state Constitution.

Perhaps the most intriguing battle could come over a so-called right-to-work proposal, which would prohibit union membership or dues as a condition of employment. Putting it on the ballot would invite an all-out, multimillion-dollar fight with organized labor. The outcome of similar battles in Ohio and Wisconsin might make Republicans wary of picking such a fight.

It also has the potential to split the business community, says Franklin, who previously worked for the Minnesota Chamber of Commerce. “There’s a healthy [portion] of the chamber, in particular, that doesn’t like the concept of legislating through the ballot,” he said. “I would be curious to see if that argument rears its head.”
Will legislators be able to resist raiding the state’s nearly $900 million surplus (particularly if it’s even larger by the February forecast)?

That money is already statutorily earmarked for the state’s cash flow and budget reserve accounts. The former will receive a $255 million deposit, while the latter will be increased by $621 million. In addition, when you consider that the state still owes school districts roughly $2.8 billion, the long-term budget outlook still looks exceedingly grim.

But that’s unlikely to dissuade legislators from eyeing some of that loot. The most likely target? Tax cuts. Democrats have been seeking to bloody GOP legislators back home by pointing to rising property taxes as a direct result of the elimination of the Market Value Homestead Credit in the 2011 legislative session. Republicans will be eager to blunt that criticism ahead of Election Day. The House and Senate tax chairs have already indicated support for reducing business property taxes with the aim of eventually eliminating them entirely. Even if such tax cuts would almost certainly be destined for Dayton’s veto pen, they could make irresistible campaign stocking stuffers for GOP legislators.

Will there be an ethics complaint filed in the case of former Senate Majority Leader Amy Koch?

In the days after Koch stepped down from her leadership post, some of her colleagues (most notably David Hann) publicly called on her to resign from the Senate. But Koch refused to slink away quietly. Her continued presence at the Capitol raises the specter that the scandal will continue to encumber the Senate GOP caucus.

Most significantly there’s the question of whether any ethics investigation will be launched. Senate Minority Leader Tom Bakk raised the possibility in a letter to Senjem last month. “I urge you, as the new majority leader, to take this responsibility very seriously and ensure that all ethical and legal questions surrounding the recent allegations concerning Senate members’ conduct are addressed in a transparent and expeditious manner,” Bakk wrote.

The target of such a probe wouldn’t necessarily be Koch alone. There are also lingering questions about the way Sen. Geoff Michel handled the matter after he was informed about the inappropriate relationship by former Senate Chief of Staff Cullen Sheehan last September.

But given the salacious nature of the scandal, there might be a mutual reluctance on the part of both Democrats and Republicans to air the details in public. As many Capitol insiders have observed since the story broke, Koch is far from the first legislator to engage in an extra-marital affair.

Will “reform” become anything more than a political platitude?

Republicans have spent an awful lot of time hyping their “Reform 2.0” agenda for 2012. (It even has its own Facebook page!) They toured the state throughout the fall seeking ideas on how to more efficiently and effectively deliver government services. The only problem: Nobody knows yet what Reform 2.0 means. The sole concrete proposal laid out by legislative leaders so far would require a supermajority to raise taxes. Meanwhile, Dayton is equally anxious to claim the “reform” mantle. Will there be any credible progress in an area where there might be room for bipartisan accord? On Thursday House Republicans will hold a news conference, presumably to announce additional details.

Will the GOP majorities work harder to serve business interests given election year contribution concerns?
Business interests have typically been supportive of the Republican majorities at the Capitol, particularly their hard-line stance against increasing taxes. “The most important thing for us was holding the line on spending,” Weaver said of the 2011 session. “These men and women went to war on that issue.”

But other items of interest to the business community went missing from the 2011 agenda, including tort reform, the establishment of a state health insurance exchange and the creation of a preschool quality-rating system. With elections looming — and campaign coffers awaiting business cash — expect the GOP majorities to be more diligent in pursuing some of those items favored by business leaders.

Weaver expects progress on the health exchange, which is politically volatile owing to its connection with the 2010 federal health care overhaul pushed by President Barack Obama. “The exchange was just something that needed to bubble up a little bit,” Weaver said. “My sense is that that will get done this session, probably in a bipartisan way, because nobody wants the federal government to set this thing up.”

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