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Lobbyist spending continues to edge up

Mike Mullen//March 20, 2015

Lobbyist spending continues to edge up

Mike Mullen//March 20, 2015

It might as well be written into the law. Every year, on or around the same date, Minnesota Management and Budget (MMB) releases the November and February forecasts. And every year, within a few minutes, someone mentions that the budget documents do not factor in inflation.

But legislators aren’t the only Capitol dwellers who must do their own math on numbers that are constantly edging higher. The same scenario affects the companies and interest groups that lobby the Legislature and administration, who encounter consistent inflationary pressure. The practice of writing — or, just as often, blocking — new laws is increasingly more expensive, as shown in the most recent disclosure reports from the Campaign Finance and Public Disclosure Board.

Lobbyist principals spent at least $62.8 million making their case to legislative, administration and metropolitan government officials last year. (Reports were due March 16, though not all filers met that deadline.) That’s more than 9 percent higher than the $59.7 million in lobbying from 2012, the most recent non-budgeting year. A similar jump happened in the 2013 budget year, which saw $69.2 million spent, up from $65.8 million in 2011.

The higher totals for last year could be ascribed to multiple factors, but the simplest explanation is that each year, the top lobbying clients spend more; and each year, there are more of them.

The Minnesota Chamber of Commerce continues to reign supreme in the total expense category, with a record-setting $2.3 million in 2014. The business group’s annual outlay has ticked up steadily in recent years, growing moderately since its 2008 total of $1.8 million.

Those gradual increases are in contrast to the second-place finisher. The Minnesota Action Network, a local chapter of the American Action Network founded by former U.S. Sen. Norm Coleman, disclosed more than $1.3 million in lobbying expenses last year. That’s a huge spike over the meager $40,000 the organization spent in 2013, though it hit that figure during the final month of that year. Prior to its registration on Dec. 4, 2013, the Minnesota Action Network had no lobbying arm.

The huge expense sum, in the absence of a fleet of lobbyists, is explained in the outfit’s individual accounting. Minnesota Action Network spent almost all of its total on the production of “lobbying materials” and “media advertising” during the latter half of 2014, as state legislative and other campaigns brought its top issues — especially education reform — into the public consciousness.

The third-highest spender in 2014 generally took the more traditional route, blanketing the Capitol with its lobbyists and experts. The Minnesota Business Partnership (MBP) lobbied in favor of several measures, joining groups like the state Chamber of Commerce  to advocate for the repeal of business-to-business taxes. But Charlie Weaver, executive director of MBP, said his group’s main focus, that year and this one, has been a variety of education reforms, including the end of the “insane” last-in, first-out seniority protection in teacher layoffs.

Most of those efforts ultimately failed, as did the business group’s advocacy to restructure MNsure, the state health insurance exchange, though proposals in both areas have received greater attention this year. Weaver said the organization does not budget its lobbying work going into the year, and instead must respond to legislative or regulatory actions as they arise.

“If our issues are on the front burner at the Capitol, we spend more time over there,” he said. “Last year was just a busy year. There was a lot going on.”

Christopher Galler, CEO of the Minnesota Association of Realtors, said his organization spent much of its $746,000 — good for fourth-highest on the year — in “prevent mode,” arguing against a proposed elimination of a long-standing mortgage interest deduction. That risk was especially acute with the DFL in control of the House, Senate and governor’s office, as some Democratic legislators had longed to cut the deduction for years.

The Realtors group was successful in that work, but lost out on its advocacy against a mandate to require sprinklers in certain new homes. Gov. Mark Dayton had threatened a veto of any capital investment bill that did not carry the requirement, and the provision was eventually preserved.

The loss on that issue was frustrating, but Galler said lobbying is a “long-term investment,” adding that the Realtors’ expenses tapered off during the lean years of the housing market, and could afford to ramp up now that the industry had stabilized.

Last year also brought the debut of one new and potentially powerful interest group. The Greater Minnesota Partnership, a business-minded offshoot of the Coalition of Greater Minnesota Cities (CGMC), disclosed $360,000 of lobbying work for 2014. That number doesn’t crack the top 20, but is a larger outlay than, for example, the Minnesota AFL-CIO union (which spent $340,000) and Americans for Prosperity ($325,000).

Dan Dorman, executive director of the Greater Minnesota Partnership, said that group focused much of its energy on securing $20 million in broadband grants for outstate communities, a legitimate victory, given the initial hesitancy from some parties.

“The Senate was, I’ll say, neutral at best,” said Dorman, a former four-term Republican legislator from Albert Lea. “And the governor was opposed until three-quarters of the way through the session.”

Dorman said the “turning point” was the partnership’s use of local media, where 18 newspaper editorial boards, including the Star Tribune, endorsed new funding for broadband media.

The group also spent some time and energy lobbying for more training and workforce housing in Greater Minnesota, and said those efforts had helped “lay some groundwork” for this session, as both areas look poised for more funding in the next budget.

Lobbying of legislative and elected offices is reported separately from that of the Public Utilities Commission, where, unsurprisingly, regional power giant Xcel Energy led all entities, with $1.56 million spent in 2014. Combined, Xcel spent upwards of $3 million arguing its case before that commission in 2013 and 2014, as the power giant and the Department of Commerce engage in a perpetual battle over Xcel’s proposals to raise usage rates to fund infrastructure investments. Following Xcel on the PUC chart is Enbridge Energy, which spent $1.2 million last year, nearly quadrupling its 2013 expenses.

Enbridge, a Canadian-based oil transport company, increased its efforts for the “Sandpiper” pipeline, and is still seeking approval of the route that would deliver North Dakota crude oil to Wisconsin via Minnesota. The debate is expected to drag on, and public hearings are scheduled to take place later this year. Enbridge allocated a comparatively minimal amount of $40,000 lobbying legislators and the administration, a huge reduction from the $600,000 it spent in 2008.

Weaver said the difference between lobbying a one-party government, as existed in 2014, and the current divided control is “night and day,” explaining that it is harder to advance an unpopular argument without “checks and balances” in place.

Then again, he added: “This year, we’re going to have to put in more time too, because now, everybody’s relevant.”

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