Minn. shutdown a battle over big-spending legacy

Associated Press
Protestors hold signs during a rally at the Minnesota State Capitol, Wednesday, July 6, 2011,  in St. Paul, Minn. Minnesota stands to lose tens of millions of dollars in the nation's only state government shutdown, as lottery tickets go unpurchased, tax cheats go unpursued and 22,000 laid-off state workers collect unemployment and health benefits. (AP Photo/The Star Tribune, Carlos Gonzalez)  MANDATORY CREDIT; ST. PAUL PIONEER PRESS OUT; MAGS OUT; TWIN CITIES TV OUT
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ST. PAUL, Minn. (AP) — Facing Republican demands to limit enrollment in assistance programs and trim historically generous state benefits, Democratic Gov. Mark Dayton has a frequent response: "That is not Minnesota."

The remark sums up one side of the wildly diverging views between Dayton and Republicans about whether Minnesota should preserve its reputation as a progressive state where taxes are high but the vulnerable are protected. That dispute underlies a government shutdown that hit its seventh day Thursday.

What Democrats see as the popular local saying "Minnesota Nice," Republicans see as unchecked and irresponsible government growth fueled by taxes they say are crippling to businesses that create jobs.

"I don't think that Minnesota Nice is going to go away," said state Rep. Mary Liz Holberg, the lead budget writer for House Republicans. "But I certainly would like to see our business climate get out of the bottom 10."

Dayton and Republican legislative leaders are entrenched over the governor's desire for — and blanket Republican opposition to — more than $1 billion in additional state spending to temper what Dayton calls unacceptable cuts to government assistance and other state programs.

The two sides had no plans to meet Thursday.

Few of Dayton's allies deny that Minnesota maintains more generous social-welfare programs than many other states. Christina Wessel, deputy director of the Minnesota Budget Project, a nonprofit research group that supports Dayton's approach, described it as "a more intricate safety net which catches more people, the less obvious people."

The state's General Assistance program, for example, provides monthly cash grants for poor single adults and childless couples — a group not extended such benefits in many states. Recipients are also eligible to apply for medical assistance and food programs.

In 1992, a Democratic Legislature and Republican governor enacted MinnesotaCare, a sweeping effort to cover the working poor who couldn't afford insurance. For years after, Minnesota led the country in the rate of residents covered by health insurance. Republican legislators have been pushing this year to replace that system with subsidies to buy private insurance.

The state also offers job-training programs to those with various disadvantages, aiming to improve the employability of people from unmarried new mothers to convicts exiting prison. Others aim to keep senior citizens in their houses instead of nursing homes. Poor people dealing with eviction, illness, theft and other crises can get help from the state under two emergency aid programs.

On Thursday, the state judge deciding what services should continue during the shutdown ruled those emergency aid programs were a critical service. Many of the state's other assistance programs have already won that designation.

Critics say that so many overlapping assistance programs can lead to inefficiency, even abuses.

"We need to attract job providers, not a population that comes here and depends and survives on our generous benefits," said Holberg, who represents a suburban Twin Cities district. "There's something wrong when it's a pretty well-known fact that if you can get to Minnesota, they'll take care of you. We can't afford it anymore."

Republican criticism extends past the social programs the state funds to how it runs a wide variety of services.

"Why do we have state parks, city parks, county parks and regional parks?" said Annette Meeks, CEO of the conservative Freedom Foundation of Minnesota and the Republican candidate for lieutenant governor last year. "Of course we value our parks and open spaces. It's one of our great gems. But do we really need four different bureaucracies dealing with that?"

The ethic of a strong and generous government has deep roots in Minnesota, borne of Scandinavian and German settlers in the 19th century and carried on by a strongly progressive movement of farmers and laborers who demanded an activist government. For much of the 20th century, the state's leading Republicans often joined in.

According to the nonprofit Kaiser Family Foundation, in fiscal year 2009 Minnesota was 21st out of 50 states in the amount of state money spent per resident. The state's per capita spending that year was $5,677, higher than large states like Florida, California and Texas but lower than neighbors like Iowa, Wisconsin and North Dakota.

In terms of tax burden, Minnesota lands higher on most lists. The nonpartisan Tax Foundation ranked Minnesota seventh in 2009 in state and local tax burden per capita. The group put Minnesota 43rd in terms of tax climate favorable to businesses, a statistic Republicans cite often.

When it comes to services provided, Minnesota ranked 15th out of 50 in the percentage of general fund spending that goes to Medicaid, public assistance and other cash assistance programs. Minnesota's percentage was 18.5 percent in 2009, according to the Kaiser Family Foundation, about half of places like Massachusetts and New Hampshire but significantly higher than Wyoming, Utah and Texas — which trailed the pack at 5.4 percent.

"Minnesotans built this community over a number of years thanks to high levels of education, a strong safety net, an investment in infrastructure, good civic involvement and low political corruption," said Jay Kiedrowski, who served as state finance commissioner in the 1980s. The fruits were borne, he said, in decades of high average incomes, nation-leading test scores and regular appearances at the top of "best places to live" lists.

Some feel that legacy is on the line.

"I don't think we should be saying are we better or worse than other states," said state Sen. John Marty, one of the Legislature's most liberal Democrats. "I think we should be asking, what's best for Minnesota?"

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