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Editorial: Last-minute fog, bad government

Published 10:14am Thursday, August 8, 2013

Minnesota’s new $15.6 billion education funding bill includes a provision that allows control of some local dollars to shift from voters to school boards.

It’s among measures that got little exposure in the flurry of last-minute, end-of-session deal-making that left Minnesotans with $2.1 billion in visible tax increases. Reporters’ work in recent weeks has begun the public discussion that should have happened before passage of this — and several other key measures from the DFL-dominated Legislature.

Under the new school legislation, metro districts can convert up to $724 per pupil of voter-approved taxes, the Pioneer Press’ Christopher Magan reported last week. The conversion won’t immediately give many districts more money or result in immediate tax increases for all property owners. But in most cases, voters will not be able to undo some funding they approved in the past.

In St. Paul, residents might get to revisit only a portion of their public school district’s roughly $840 per pupil operating levy when it comes up for renewal in seven years, the Pioneer Press’ Mila Koumpilova reported, noting that “the shifts are appealing to districts because they make those dollars invulnerable to levy renewal defeat at the polls.”

Some Republican lawmakers, she reported, have criticized the shift, saying it would disenfranchise homeowners and make districts less accountable for money that comes directly from local taxpayers.

If school leaders do nothing before the end of August, metro districts automatically will convert $424 per pupil of existing levies from voter to school board control. Outstate districts will convert less. School boards can vote by the end of September to shift another $300 per student.

• A state gift tax: A provision of the omnibus tax bill made Minnesota only the second state in the nation to tax large gifts between residents.

Those affected — taxpayers who make more than $1 million in taxable gifts over the course of a lifetime — will find themselves charged for giving relatives such things as lake homes, boats and family businesses, the Pioneer Press’ Nick Woltman reported. Gifts between spouses and charitable contributions are exempted, as well as certain direct payments made on medical bills or educational expenses. The Minnesota Department of Revenue expects the new tax to generate about $13.5 million in 2014, increasing to $34 million by 2017.

• Storage and warehousing services: The measure — among business-to-business sales taxes first proposed and later dropped by Gov. Mark Dayton — “arose at the end of the session like a fiscal Lazarus from the tomb,” wrote Pioneer Press columnist Edward Lotterman, criticizing the new tax and another on repair and maintenance of business equipment as bad public policy.

Implementation of the tax — expected to generate nearly $100 million annually — was delayed until April 2014, allowing lawmakers to revisit it. Until then, uncertainty is a critical issue for business interests, some calling for repeal and citing examples of companies already delaying expansion plans.

Minnesota would be the first state in the nation with such a tax.

• Senate office building: Construction of an $89.5 million Senate office building and parking ramp is scheduled to be completed by May 2015.

“With little public debate, the Legislature included language authorizing the project as a small provision in a controversial, 379-page tax bill that passed in the final minutes of the last night of the legislative session May 20,” the Pioneer Press’ Bill Salisbury reported. “DFLers and Republicans argued for hours over the income and cigarette tax increases in the bill, but almost nothing was said about the proposed new building.”

The fog of last-minute deal-making and big bills obscures decisions of consequence, and, often enough, as the examples above illustrate, bad government.

— St. Paul Pioneer Press, Aug. 4