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Gov. Mark Dayton doesn’t enjoy raising anyone’s taxes. The first-term Democratic governor, reflecting on his now-complete third legislative session, knows the headlines have mostly been about the $2 billion in tax increases that he and the Democrats who control the Legislature enacted this year.

In Dayton’s view, a very good year

Governor reflects on budget, taxes, marriage bill, and his looming re-election campaign

Gov. Mark Dayton doesn’t enjoy raising anyone’s taxes.

The first-term Democratic governor, reflecting on his now-complete third legislative session, knows the headlines have mostly been about the $2 billion in tax increases that he and the Democrats who control the Legislature enacted this year. Dayton himself made the issue of raising the income tax on the wealthiest 2 percent of Minnesotans the centerpiece of his first run for governor in 2010, and this year it became a reality. But Dayton’s popularity is at its lowest since he took office. Public Policy Polling released the results of a survey last week that shows Dayton’s favorability rating dropping from a high water mark of 53/39 down to 49 percent favorable and 47 percent unfavorable.

“I’ve been in this long enough to know you go up and you go down, and there were controversial issues this session. All the emphasis was on taxes, taxes, taxes,” Dayton told Capitol Report in a wide-ranging interview last Thursday. “If we would have had a balanced budget at the start of the year, we wouldn’t have had to raise taxes.”

But Dayton doesn’t take any of it back, particularly pumping that money into what he says were long-needed investments in K-12, higher education and property tax relief. Capitol Report sat down with the governor to talk about his role in crafting the $38 billion budget this session, legalizing gay marriage, Republican criticisms of “overreach,” and what it was like to operate in a DFL-controlled government.

Capitol Report: Looking back at the session that just wrapped, what do you consider Democrats’ biggest accomplishment?

Gov. Mark Dayton: Of the biggest achievements, one I think I would say is education — reforming our state’s approach to education, starting with early childhood and all-day kindergarten, and then the integration of the high school education, post-secondary into the MnSCU (Minnesota State Colleges and Universities) system. I think that’s really going to result in better students and better jobs in our children’s future. Also special education, that was very important to me. We didn’t put as much money into that as I wanted, but it was more than it’s gotten in the past.

We did what we said we were going to do, me in my 2010 campaign and the Legislature last November. We said we were going to raise revenues progressively, because the alternative was cutting another $627 million out of the budget. That was one of the main differences between the DFL and Republican candidates last fall, and Minnesota picked a majority that wanted a balanced approach. We did over $2 billion in permanent cuts with the Republican legislature in 2011; those were carried forward into the forecast, so [that] kind of got lost in the equation.

One example is, higher education was cut by 14 percent, or $240 million, and that would have continued on at the same level the next biennium. We added $240 million, and coincidentally, we brought it back to where it was two years ago. That’s a spending increase, yes it is, but it is restoring the cut that was made back then. I think we dealt with the deficit, raised revenues progressively, and we invested that money in education and job creation. We celebrated the Mayo proposal yesterday, and that project wouldn’t have even happened if other people had been in charge of the session. Major job projects like the 3M and Mall of American expansion, these are projects that take years to come to full fruition, but it shows again how there is a positive, constructive role government can play in partnership with the private sector.

CR: And what about regrets or disappointment from the 2013 session?

Dayton: That the bonding bill didn’t pass. There were thousands of jobs that would have been created this summer and fall, and now people will sit on the bench because of Republicans. … It just shows again how the government can work with the private sector in creating jobs.
The projects that are in the bonding bill for downtown St. Cloud, downtown Mankato, downtown Fosston are just as important relative to their size and scope as other projects are for the larger cities, as well as higher education and those buildings that are in serious disrepair, and parks and recreation and roads and bridges. It’s just nonsensical.

CR: You went from divided government that led to historic gridlock to one-party rule. Was it as simple as everyone assumed it would be?

Dayton: I don’t think it’s ever easy. You have 201 people, and counting me, 202 people, elected in our own right, and we each have different ideas on how we want to fix things, but that’s the way the process is intended. It’s supposed to be an interaction, sometimes a clash, of ideas, ideologies, geographies and life experiences. No one is supposed to get their way all the time, that’s one of the geniuses of democracy, that we have to debate and discuss and sometimes cooperate and sometimes disagree. This was, however, in all honesty, much, much better than two years ago.

CR: You are in the process now of signing budget bills, and today you line-item vetoed the Legacy bill and wrote a very interesting veto letter. Do you expect this veto letter to be the final word on the question of whether the Legislature should pass projects that weren’t vetted by the Lessard-Sams Council?

Dayton: That was the Senate’s position, and that was the position of the Legislature last year. As I said in that letter, in my opinion the issue was not about money, the issue was about relationships. I think it’s essential that those relationships be repaired before the next legislative session. I think that will solve the problem.

CR: Given that the state’s vote on the marriage amendment was so divided, and some statewide polling suggested gay marriage was unpopular, did you have any hesitation about pushing to legalize same-sex marriage during this session?

Dayton: I pay attention to the polls but I’m not governed by them, especially with something as momentous as this. You need to do what you think is right. I was urged to put it in my State of the State [address] because that would provide a catalyst to get it started, so I did that and I’m glad I did it. [In] advocating for the freedom to marry, all involved did an excellent job, and a number of legislators made a truly heroic decision to do what they believe is right.

CR: Were you ever worried it wasn’t going to pass? Did you get involved talking to legislators behind the scenes at all?

Dayton: I was asked to make a few calls and I did. They didn’t ask me at the end, so I think they were reasonably confident with their count. I had a lot of other things going on at the end of session, so I couldn’t work on it every day, but I got reports, and the sense was things were going their way.

CR: Republicans are already traveling around the state saying Democrats overreached on everything from gay marriage to tax increases. What’s your response to that?

Dayton: I call it progress. We told Minnesotans what we proposed to do last November and the majority of them supported it. They took out two Republican majorities in the Legislature and they put in two DFL majorities. … We said we were going to raise revenue, and we were going to balance the budget responsibly, and we were going to invest in education and economic development and job creation, and in those areas we did what we promised.

CR: In your State of the State address, you had said you wanted next year to be the so-called “unsession.” Are you still advocating for that, or were there policy or spending issues left undone this year that you’d like to see taken up in 2014?

Dayton: The bonding bill will come up, certainly, but that typically comes up in the even years. The rest of it, as far as I’m concerned, is we should be undoing all the unnecessary rules and regulations. It takes a year and a half to do an Environmental Impact Statement (EIS), and it takes nine months to fill out an environmental assessment worksheet. It’s just become so micro-prescriptive, and it holds up everything. Nonprofit organizations, businesses who always have to report three, four times to state agencies and a couple more times to federal agencies. Everyone is bogged down by it. I think it’s going to be fascinating. We will be able to unravel quite a few things.

CR: Additional funding for roads, bridges and transit stalled this year. Do you expect that to be a big issue next year?

Dayton: Well, it’s an election year, and to me the only thing really holding up the statewide effort is, the proponents of the metro mass transit have done an excellent job of detailing their proposals and routes and timelines and costs, whereas the highway department’s plan really was not as well-developed yet. It [takes] a significant amount of money to make a difference in highway needs, and raising the gas tax by 5 cents turned out to be terribly mis-timed with gas prices so high.

But this wasn’t going to raise enough money. A 5-cent gas tax was going to raise $89 million for the state’s share, and that wasn’t going to get us very far in the cost of these projects. So everybody agreed that there’s need, but the question is how to pay for it. That’s what [Minnesota Department of Transportation] Commissioner [Charlie] Zelle is charged to do now.

CR: Recent poll numbers show your favorability rating with Minnesotans has dropped since the start of the session. Are you worried Minnesotans may not be on board with some of the things Democrats did this session?

Dayton: I watch polls, but I say each poll is like a perfume. If it’s good you sniff it a little bit, but if you swallow it you’re in trouble. Bad polls, you probably don’t even want to sniff them. I’ve been in this long enough to know you go up and you go down, and there were controversial issues this session. All the emphasis was on taxes, taxes, taxes. All the stories people saw were about this proposed tax increase or that proposed tax increase, so I guess I’m not surprised. All I can do is the best job I know how to do, and a year and a half from now the voters will let me know if they want me for a couple more years or not.

CR: Do you think the session will be remembered for tax increases?

Dayton: The smokers will remember it – you’re probably going to hear an earful from them, or some of them. For all the Republicans’ big lies, that we are raising everyone’s taxes, we are just raising taxes on the wealthiest 2 percent and closing tax loopholes on large corporations so they pay their fair share of taxes. The big guys will feel the effect of it, some of them understand the need, but every citizen will be feeling $400 million in property tax relief and funding for the schools.

CR: Now that you’ve accomplished your campaign promise to make the rich pay their fair share in income taxes, what will your re-election campaign message be?

Dayton: I haven’t spent a lot of time thinking about that, to be honest, but continuing the progress we are making. If we would have had a balanced budget at the start of the year, we wouldn’t have had to raise taxes. We also had to pay back the school shift.… I don’t enjoy raising people’s taxes. I’d like to see the rates lowered on all four tiers, and if the economy improves and these initiatives pay off, we will do that and continue the investment in education and economic growth.

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