New chair views local aid with critical eye

It is a sentiment that has appeared rarely, if ever, in Capitol press accounts: Steve Drazkowski agrees with the speaker of the House — the current one.

The unusual instance of shared thinking stems from a radio interview House Speaker Paul Thissen gave earlier this week. According to Drazkowski, R-Mazeppa, Thissen said increased funds for local government aid (LGA) are not the a surefire way to tamp down property taxes, as municipal officials can still opt to raise new revenue on top of the state aid.

That the two legislators think alike would surprise most regulars at the Capitol, where Drazkowski’s House floor speeches have forged his reputation as one of the most outspoken conservatives in the lower chamber.

The location of this parcel of common ground is also noteworthy. Thissen and House Democrats made reduced property taxes a top priority during their time in the majority, and used those efforts as a major selling point during the 2014 campaign. Drazkowski, meanwhile, has been handed the gavel as chair of the House Property Tax and Local Government Finance Committee, which will produce a division report that will, in some form, be incorporated into the omnibus tax bill.

As would be expected, the DFL leader and GOP lawmaker’s views quickly begin to deviate beyond this point. Drazkowski sees the rise in property taxes as a sign of rampant overspending by local governments, and said this gluttony was only helped by Democrats’ boost to the LGA formula in the last budget.

“You had the state government spending like drunken sailors, and local governments basically followed suit,” Drazkowski said. He added: “It’s almost a cultural thing that seems to be happening. It almost seems to be a, ‘look over your shoulder and get the green light’ [on spending].”

Thissen, for his part, has communicated his concern that Republicans could gut the state’s $76 million LGA contribution to Minneapolis, telling one neighborhood group that the topic would a “big fight” during the coming session, according to the Star Tribune. In a subsequent interview with Capitol Report, Thissen singled out Drazkowski’s appointment as particularly troubling.

“Steve Drazkowski has been a strong opponent of local government aid,” Thissen said, “and any idea that it’s the role of the state.”

That assertion could be cause for alarm for the state’s various city councils and county boards, if proven true. In 2013, a diverse group of interested parties — including the League of Minnesota Cities (LMC), the Coalition of Greater Minnesota Cities (CGMC), and the cities of Minneapolis and St. Paul — worked in concert to win approval of an $80 million boost to LGA funding.

In contrast with the warning from Thissen, LMC lobbyist Gary Carlson expressed a more sanguine view of Drazkowski’s chairmanship. Carlson acknowledged that he had not worked closely with Drazkowski on LGA in prior years, but said he knew the Republican to be “very familiar with the subject matter.” Though few Republicans ultimately backed the DFL’s 2013 tax bill, Carlson said the LGA reform package approved that session was arrived at with “a decent amount” of Republican input, which should give some hope for the preservation of that funding in the next budget.

Said Carlson: “I do think there’s going to be a lot of anxious city people watching to see what comes out. But then, I think that’s fairly typical whenever there’s a change in leadership.”

Carlson added that he intended to meet with Drazkowski at least once before the 2015 session to learn more about the new chair’s thinking.

Whatever emerges from Drazkowski’s committee will then be kicked up to the full House Taxes Committee, which will again be chaired by Rep. Greg Davids, R-Preston. Davids said he intends to delegate authority to Drazkowski to lead the way on reforms to property taxes and LGA — “[Drazkowski] is a very, very capable legislator,” Davids said — but pointed out that Republicans would need to pass a tax bill that could get buy-in from the DFL-controlled Senate and the governor’s office.

“[Republicans] do need to be a bit pragmatic, and realistic,” Davids said. “We’re one leg of three legs of the stool, and we’re going to have to work together. Now, having said that, we’re not throwing in the towel.”

Davids said his own priorities on property tax changes could include a phasing out of the commercial property excise, which he said discourages businesses from relocating to Minnesota. As for individuals, Davids said tax hikes on some Minnesotans, particularly farmers, had vastly outpaced the comparatively modest increases in aids and credits available to homeowners.

Drazkowski thought the DFL’s strategy of increased rebates is akin to “a shell game,” and said the fundamental problem remains the increase in local government budgets.

“I think we need to get down to root causes of why government is growing so rapidly, while people’s net incomes are not,” he said.

Some Capitol sources have pointed out that Drazkowski’s demeanor marks a departure from his predecessor as chair, Rep. Jim Davnie, DFL-Minneapolis, and worried that the chairmanship, Drazkowski’s first, could lend itself to partisanship and friction. Drazkowski rejected that line of thinking, and said his general style is to be “forthright and transparent” without crossing the line.

“I get passionate,” he said, “but I don’t get angry.”

For his part, Davnie said Drazkowski is “very smart,” but he worried that Republican control could mean a return to that caucus’s previous positions, including the dissolution of the market value homestead credit — DFL majorities approved an altered restoration of that program — and cuts to LGA.

“Our property tax reform, and the re-funding of local government aid, that was good, solid policy work,” Davnie said. “And I would hope [Republicans] would respect that rather than use it as a political football.”

Drazkowski was somewhat guarded about his current ideas for potential reforms, saying that he plans to get input from local officials and “Minnesotans in different parts of the state” to shape his thinking, while also looking for solutions from other states. He also said he is aware of the need to reach agreement with Democrats, at least those in Senate, and added that he plans to foster participation from his House colleagues as well.

“I’ve worked very hard as a member of committees [Democrats] have chaired,” he said. “I would suspect, and expect, that we’re going to see the same type of good working relationship we had in those situations.”