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How money gums up the works at Capitol

schultz comm chartMany factors explain decision and indecision at the Minnesota Capitol. It is easy to point to partisanship, ideology and geography as forces affecting what legislation passes. Or in the case of the 2015 legislative session, what did not pass. But an underlying force circumscribing the entire legislative process is the amount of money spent by lobbyists and their principal associations. Special interests spend a lot to affect legislative outcomes, and a review of the most recent data from the Campaign Practices and Public Disclosure Board demonstrates the dramatic increase in their flow of money.

Organizations and interests have several ways they can spend money if they wish to leverage influence. The most direct way is making contributions to candidates. However, in nearly 20 years of doing research on money and politics in Minnesota, I have found that direct contributions to candidates represent only a small fraction of the money special interests spend. It is small fraction because direct contributions are limited and subject to disclosure. They may be a larger portion of all political money in Minnesota now because the Legislature has weakened disclosure laws and raised contribution limits.

Besides direct contributions to candidates, one can also make limited contributions to political funds and organizations, and unlimited contributions to the political parties, local party units, the legislative caucuses, and even into supporting independent expenditures. In terms of money spent on campaigns and elections, special interests — defined as political action committees, lobbyists and large donors (>$250) have many options. In reality, most of the money spent to affect campaigns and elections in Minnesota is unregulated and often poorly documented. The Marty reforms of the early 1990s have largely been undone or never went far enough.

But historically the largest chunk of money spent by special interests has come in terms of lobbyist disbursements and expenditures made by associations to lobby the Legislature. Whatever elections many portend, special interests have historically expended a lot of money to affect legislation. But the question is, how much?

Begin first with a history on the growth in spending by associations registered to lobby in Minnesota. In 2002 total spending by lobbyists and the associations they represent was $41,901,466. By 2014, the last year for which there is data, the amount was $70,305,383. This represents a 67.8 percent increase in the amount of money spent by lobbyists and the interests they represent to influence the Legislature. During that period the rate of inflation was 31.6 percent, meaning real growth in spending increased by 36.2 percent. However, 2014 was not the largest disbursement year ever. Instead it was 2013 when$74,753,493 was spent, representing a 78 percent increase in a little more than a decade. Factor in a rate of inflation of 29.5 percent, the real increase was 48.5 percent.

Look at it in a different way. In 2002 associations spent an average of $208,465 per legislator while in 2014 they spent $349,778. Legislative salaries are approximately 31,000 per year. This means that by 2014 associations spent approximately 11.3 times a legislator’s annual salary to lobby them.

Another way to understand the growth in money at the Capitol is simply to compare budget sessions. Looking at lobbying spending in all budget years from 2003 to 2013, one sees that it increased every year, moving from $47,656,117 in 2003 ($237,095 per legislator) to $74,753,493 in 2013 ($371,907 per legislator). This is a 57 percent increase. During that period inflation ran at 27 percent, making the real increase in spending 30 percent. This spending has increased every budget cycle over the last decade.

During the 2014 session among the biggest players were the Minnesota Chamber of Commerce, the Minnesota Action Network, and Minnesota Business Partnership, each spending more than $1 million. Another 145 associations spent at least $100,000 to lobby legislation, including groups such as Excel, Education Minnesota, and an assortment of energy, real estate, and Indian gaming interests. PolyMet, seeking to secure permits to do mining in the Iron Range, spent $279,000.

Now the question is how much lobbyists and their associations spend already in 2015 to lobby the  Legislature? Unfortunately complete data on total association spending will not be available until next year. However, lobbyists were required to final reports in June listing their disbursements. From January until the end of May, covering the period of the regular session, lobbyists disbursed $5,838,980 to influence the legislative process.

So why should we care about how much lobbyists and their associations spend? The decision to spend money is a business investment decision to achieve influence. This influence cannot necessarily be measured by matching dollars to public policy or money to specific votes or political outcomes. Money is not expended by special interests in a way that allows for this type of analysis. Instead, one needs to look at politics and policymaking at the Minnesota Legislature under the influence of an incredible amount of money. This money on lobbying means lobbyists and the interests they represent have a day-to-day presence at the Capitol that the average voter does not. Special interests have not just access but repeated and constant access to policymakers. They crowd out the public voice. Additionally, wealthier organizations as the Business Partnership or the Chamber of Commerce crowd out voices with less money to support their efforts. In effect, money determines who gets heard.

But in addition, each party has its own interest groups who lobby the Legislature. Groups supporting the Democrats and the Republicans each spend money to secure their interests. This means that money entrenches political positions and ideologies, making it difficult to compromise or seek common ground. But more importantly, and this is the lesson of the 2015 session, a Legislature operating under the influence of entrenched money is incapable of passing legislation. In fact, the real story about why the new normal in Minnesota is for special sessions and government shutdowns can be connected to the explosion of money in the state political process. The dramatic increase in lobbyist and interest group well points out what happens when increasingly larger amount of money are spent to influence legislators and the governor.

David Schultz is a professor of political science at Hamline University in St. Paul.

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