Meet The New Huckster, Same As The Old Huckster

During last week’s gubernatorial debate in Duluth, Governor Dayton referred to the Iron Range has having been victimized by “hucksters” with hare-brained economic development schemes to try to compensate for the crash of the mining industry.

Yesterday on their show blog, Jack and Ben (who, notwithstanding working for the lesser talk station, have been on fire this past week or so) discovered something important; exactly who one of the key “hucksters” was:

The smoking gun is a January 1986 document titled “Housing and Community Development Briefs” authored by the Minnesota Department of Energy and Economic Development and several other organizations. According to the document: “The Department of Energy and Economic Development recently approved [a direct, fixed-interest rate, fixed asset new/expanding business loan].” The publication then lists several businesses that were recipients of the loans, including Lakewood Industries [the company that built the chopstick factory]. It states, “Lakewood Industries, a startup company expected to create 76 jobs in the next two years, received final approval for a $250,000 loan.”

Now, Dayton was Minnesota Department of Energy and Economic Development commissioner from 1978-79, and again from 1983-86.  In other words, his fingerprints are all over the infamous Chopstick Factory. 

Now, $250,000 might not seem like all that much compared to the $5 million in total financing, including $3 million from the Iron Range Resources and Rehabilitation Board (IRRB).

But the story doesn’t end there (emphasis added):

So let’s look at the IRRRB. The Director of Economic Development of the IRRRB during the chopstick factory fiasco was Mark Phillips. Mark Phillips was intimately involved in the details of the chopstick project, according to a statement he provided in a Chicago Tribune article from June 5, 1998: “They [the Japanese] wanted real white wood with no stain to it. We have a good species here, real white wood that veneers well.” And a December 8, 1986 Associate Press article shows that Mark Phillips was keenly aware of the financing the IRRRB had provided to the project.

So what happened to Mark Phillips? In 2011, Mark Dayton appointed him Commissioner of the Minnesota Department of Employment and Economic Development.

Once a boondoggler, always a boondoggler; Phillips was a prominent supporter of public funding for both the Vikings stadium and the Saint Paul Saints ballpark in Saint Paul. 

As to Governor Messinger Dayton?

More Of That “Blowing Sunshine Up Minnesota’s Skirt” Thing…

I read yesterday’s headlines about the new, Preferred-One-Free MNSure rates, and got ready to write.

Then, I got an email from a friend who works in the Healthcare industry, which explains it much better:

The headlines on MNSure saying premiums rose only 4.5%.  This reminds me of an old story.

A friend of mine was flying a helicopter in the fog in downtown St. Paul and his radio and navigation equipment failed suddenly.  He knew he was in the midst of the downtown and going any direction could mean an immediate crash.  He stayed put hovering for a few minutes, inching lower.  When the fog lifted he was right outside the MN Dept. of Commerce.  Not recognizing the building he grabbed a piece of paper and a big sharpie.  He wrote in big block letters “Where am I?” and put it put it on the outside of his windshield.  A commerce employee saw the helicopter’s predictament and wrote a note back and placed it in the building window.  “You’re in a helicopter.”

Technically correct and absolutely meaningless.

That’s my take of this headline.  The real problem is that the low cost insurer, Preferred One, dropped out.  Maybe the remaining plans only increased by 4.5% but to the 60% who were on Preferred One, the real story is that their premiums are rising about 20%.  Minnesotans will understand that if they take time to read the full story.

Which the DFL is counting on people not doing, naturally, as they relentlessly pound away with that “4.5%” number on ads around the state.

Recent history shows it’s not hard to fool Minnesotans.

For Those Tired Of That “Smoke Up Their Skirt” Feeling.

Daytonomics - a noun, referring to economic conditions that look rosy on the surface, but worse and worse the more one examines them.  See also: “Potemkin”.  

The DFL is running the bulk of their state campaigns – the Legislature, the Constitutional Officers and Governor – on the notion that two years of Daytonomics have left Minnesota an economic powerhouse.

Like squatters who move into an “Architectural Digest” house, there’s still some zing in the state’s economic elevator pitch – leftovers from ten years of at least partial GOP stewardship.

But under the surface?

There are three signs that the various editorial boards are doing their level best to avoid, or at the most downplay:

  • State revenue keeps falling short of projections.  It’s lagging because personal income tax withholding is slowing down.  They’re slowing down because personal income in Minnesota is not keeping pace with expectations as of the last budget session.  The fact that it means we’re heading for another deficit is the least of the issues; the economy isn’t that damn good.
  • Along those same lines?  The Minnesota Zoo is laying people off. Costs are up – thanks, Barack Obama! – but attendance is also down.  4.5%.  The Zoo – especially the Minnesota Zoo, which is a pretty spendy day out for a family – is something people do when they’re feeling flush, and feel like showing the kids a good time.  You’ll note that attendance at the Como Zoo – which is free, unless you’re a Saint Paul taxpayer – isn’t hurting.
  • Oh, yeah – after a year or so of bragging about Minnesota in comparison to Scott Walker’s Wisconsin that Minnesota is dead last in new job creation in the Midwest.

Wanna see the interesting part of this last story?  Look in the graph comparing the states in the Midwest.  Check out the historical job numbers:

  • 10 years ago, when Tim Pawlenty and a GOP House ran the show?   Booming economic growth.
  • Five years ago, when Tim Pawlenty at least held the line on DFL spending?   At the depths of the Great Recession, no less?  We were among the region’s leaders!
  • Two years ago, at the end of the GOP’s control of the Legislature?   Still good.

Today?

Dead last.

Dead.  Last.

Last.  Dead.

This is Mark Dayton’s economy.

Throwback Thursday

Governor Dayton says “the buck stops” with him in re MNSure:

— Gov. Mark Dayton [said] that he ultimately feels responsible for the success or failure of [MNSure].

Dayton apologized for problems Minnesotans are having on the state’s health care exchange. The governor is promising to fix multiple website problems, as soon as possible.

“I apologize to those Minnesotans who have been seriously inconvenienced or are distraught by the failures of MNsure. It’s unacceptable,” Dayton said Thursday.“Did I cause? I don’t think I caused the problems at MNsure and I did everything I could to prevent them,” he said. “Ultimately the buck stops here.”

Oh, yeah – you read that right; the story came out last December

Before MNSure’s current woes – the cratering of the code, and Preferred One’s bailing out of the whole debacle. 

So – when Governor Dayton says “the buck stops here”, does he mean it like he did…:

  • during the Vikings Stadium fiasco, where he committed the state’s taxpayers to hundreds of millions of dollars, then told the Legislature to “deal with it”, a la Michael Scott?
  • during the Minimum Wage fiasco, when signed a deeply flawed bill, and then publicly wavered a few months later when his spawn told him they were having trouble making ends meet at their posh Minneapolis restaurant?
  • during the last Budget session, when he served as an untrained mouthpiece for the public employee unions that put him in power?

Because none of those, nor his behavior in re MNSure, involve actually stopping any bucks.

Chanting Points Memo: The Dayton Economy Just Keeps Getting Better And Better!

Just keep repeating it to yourself, DFLers; the Dayton economy is awesome!

The Dayton economy is awesome!

The Dayton economy is awesome!

Housing starts are off 15 percent in August (the full story appeared on MPR last night – but naturally isn’t available online today):

Confidence in the local homebuilding market took a hit in August, as permits for new single-family houses declined 15 percent from a year ago and permits for new multifamily units were down 78 percent. 

And the price of farm land – one of the key indicators and drivers of the farm economy – is slipping in Minnesota.  But hey, at least they’ll be getting taxed more for it…

 

All That DFL Happy Talk About The Economy…

is baked wind.

 Minnesota lost 4,200 jobs in July, and is adding them at an anemic pace year-to-date:

State officials said Thursday that Minnesota employers shed a seasonally adjusted 4,200 jobs in July. Meanwhile, they also revised June’s numbers downward by 3,600 jobs.

That means that, year-to-date, Minnesota has added a meager 2,900 jobs, or about 400 per month, on an adjusted basis.

During July, the education and health services sector lost 5,300 jobs. Information shed 1,000; construction, 700; financial activities, 200; and government, 100.

The sectors that added jobs: trade, transportation, and utilities (up 1,600); manufacturing (700); leisure and hospitality (600); and other services (200). Logging and mining, and professional and business services held steady.

Look for the Alliance for a Better Minnesota’s lie machine to fabricate a lot of phony economic happytalk in the next ten weeks; as we discussed earlier, they’re off to a running start.

No – a lot.

Slump

Amid all the DFL’s bragging about the economy – which Bill Glahn dispensed with earlier this week – let’s note that for the fifth straight month, tax receipts are off.

And not by just a little bit (emphasis added):

Minnesota’s tax collections for July have come in $69 million below expectations.

The Department of Minnesota Management and Budget released its monthly revenue Monday. It shows the state took in 6.6 percent less than was forecast.

And in the wake of the DFL’s bragging about the state’s ostensible unemployment rate?

The shortage was most acute in the area of individual income taxes, which were off by $36 million. Officials say some could be attributed to timing of tax payments or refunds.

Sure.  Some of it could.

But most of it is attributed to the fact that under DFL rule, the state’s economy is slumping.  Slowly – it’s a gradual thing, as economic trends always are – but definite.

And all the DFL’s happy talk is fermented BS.

Breaking Some Eggs

I had a great pleasure of meeting seven or eight of my closest friends at the River Oasis Café in Stillwater Saturday morning.

We talked about the cafe last week; they aroused the ire of the entire Minnesota Left – few of whom would ever seem to have been at the River Oasis – by putting their “minimum wage fee” on their receipts:

20140811-065434-24874747.jpg

First things first: It’s a classic American diner – like Mickey’s on West Seventh, or Keys, and not a whole lot of others out there anymore. The food was excellent.

I had the pleasure of talking with Craig Beemer, the owner, on my show on Saturday afternoon (and his wife on Saturday morning). And we learned a couple of things about the place, and the “controversy”.

Money:  One of the left’s main whining points about the public “minimum wage fee” is that it’s “disrespectful to the employees”.  

Of course, it’s a stupid point.  Unlike most restaurants, the Beemers already pay the back of the house staff – the line cooks, dishwashers and the like – better than minimum wage, and (according to Beemer) very competitively with the similar places in Stillwater.  That’s the kind of “respect” I actually cared about when I was a low-wage employee.

The only people making minimum wage are the waitstaff – and when you add on tips, they’re making closer to $25 an hour, often more, and the minimum wage is not an issue. 

Except for the Beemers, for whom the wage hike was a $10,000/year hit on the bottom line.   Remember – restaurants across the river in Wisconsin have a minimum wage of $3-and-change per hour.

Because they have a tip credit.

Power:  Which is what Governor Dayton’s sons asked for earlier this summer.  Andrew and Eric Dayton, owners of “The Bachelor Farmer”, a chi-chi restaurant in Minneapolis, complained to Dadders because the new, higher minimum wage hike was harshing their fiscal mellow.  They asked for…

…a tip credit.

Bonus Explanation For Leftybloggers, none of whom apparently have ever worked for tips:  you don’t work for minimum wage.  Even when there’s a “tip credit” in effect and your “wage” is $3-and-change/hour, like in most surrounding states, you’re still making more.  How much more?  If you work at a crummy place with lousy food, maybe not enough more.  If you work at Manny’s Steakhouse and tend to tables  that rack up $400-$1000 for a meal, you can make well into six digits.  In between?  It’s a complex set of dependencies; waiting skill, clientele, season, even the weather. 

But for all the crap that Tom Emmer took for his “waitstaff making over $100,000″ “gaffe” four years ago, you might be amazed at the number of waitstaff that take home solid middle-class “living wages”; $50,000, $75,000 and more. 

Which isn’t bad for a trade that requires no education, licensing or anything but talent and hard work.

Which may be what bothers liberals about all of this.

“If Ifs, Ands And Buts Were Candy And Nuts, We’d All Have A Wonderful Unbedankfest”:  Here’s another note for ignorant leftybloggers; a “tip credit” acknowledges the fact that for a good waiter at a good establishment with a good clientele, the minimum wage is the fringe of their income; the owner can apply some of the waitstaff’s tips to the wage, in effect. 

“I think tipping is just wrong”, whined a massive clot of liberals last week, “and I think we should do away with it; it’s unfair.  They should all just be paid”, they say, reflecting the “progressive” desire to oversimplify the free market (and working for tips is the ultimate meritocracy). 

Of course, it’s been tried.  Not a few restaurants have tried to abolish tipping – paying their waitstaff more, and jacking up the prices accordingly, to a brief flurry of adoring media attention. 

Then they quietly vanish.  And a few years later, the cycle repeats. 

“It’s So Tacky!”:  Tackier than jamming down a minimum wage increase with the barest possible minimum of debate, and then reconsidering when the governor’s kids get into a jam? 

“Why don’t they publicize all the costs that hit their bottom line?”:   Because if they use too much electricity, they can unscrew the lightbulbs in the bathrooms.  If the price of tomatoes goes up, they can use fewer of them in their recipes.  If Ecolab cleaning products are too expensive, they can switch to Servicemaster.   In other words – as with everything in the free market (including restaurant choices), they, the consumer, can say “no” and pick a better option. 

But they can’t switch states.  Tempting as it is for many businesspeople.  Government is the one thing you can’t say “no” to, without having men in uniforms with guns busting down your door eventually. 

And the hypocrisy of a “progressive” movement that twisted itself into knots to try to legitimize the “Occupy” movement turning around and attacking an actual working business for using its right to free speech is enough to put me off my breakfast, were it less delicious.  

“What are you going to do, Berg?  Hang out there all the time?”:  It’s not really about me.  But when in Stillwater – a place I may get to annually – sure why not? 

The “point” they’re shooting for is that conservatives won’t be going there forever, and the liberals among the Oasis’ clientele will stay gone. 

I’m going to guess that most of the people doing the “protesting” have never been there, and would never have gone - and if they did, they were, like most liberals, lousy tippers anyway. 

Anyway - kudos to the Beemers.  And thanks for a fantastic breakfast, a great discussion, and for fighting a battle that a lot more people need to fight.

It’s The Minnesota Way!

So you want to effect some change in Minnesota politics?  Perhaps right a wrong that you see?

What’s the best way to do it?

Spend years mustering supporters and changing public opinion?  Like the Tea Party?

Or sit in tents out on the sidewalk, warmed only by relentless NPR coverage, like “Occupy?”

Nonsense.  Just have a plutocrat father who had his office bought for him by your stepmom!

During an interview with the Post-Bulletin’s Editorial Board last week, Dayton said his sons Andrew and Eric Dayton have been making the case that tipped employees should be treated differently. His sons own the Minneapolis restaurant “The Bachelor Farmer.”

“It may be that we have to fine tune it. I understand my sons’ frustration with the tip credit issue. They make a very articulate case,” he said.

During the legislative session, the Minnesota Restaurant Association had pushed hard for a tiered tipped employee system. Under that proposal, an employee whose wages and tips equaled at least $12 per hour would be paid at the federal minimum wage of $7.25 per hour. Dayton said his sons have said that the minimum wage increase means their wait staff will be making significantly more per hour than the dishwashers and other staff.

Wait…

…I seem to remember a governor’s race four years ago.  Where a candidate suggested exactly that.  And was pelted with pennies, to the gleeful tittering of the local media and left (ptr).

So the next time you’re a liberal dilettante and you find your hobby restaurant is being financially stressed by the DFL legislature’s innumerate noodling in the labor markets, just make sure an assembly of oligarchic plutocrats gets Dadders elected!

Problem solved!

SUPPLEMENTAL QUESTION:  By my count, this is the third or fourth law that Governor Messinger Dayton had to sign to know what it’d do.

“Unexpected”

For the fourth straight month, Minnesota’s revenues came in below forecast – and the rate of the shortfalls is accelerating.  That is according to Minnesota Management and Budget, which is nominally non-partisan (but whose leadership depends on Mark Dayton for their employment, and whose rank and file work for AFSCME). 

Exactly as fiscal conservatives said they would.

Over the past four months, the shortfalls add up to over $200 million dollars – enough for a couple of Senate Office Buildings (hat tip: Ben Kruse). 

So what does this mean? 

Forward To The Past!:  Remember 2010?  When the DFL/Media harped on the “six billion dollar deficit” that two years of DFL control of the legislature had left us? 

The deficit that two years of GOP control in the Legislature erased and converted – in the year after the DFL took control, when GOP policies were finally taking effect – to over a billion in surpluses? 

The “D” word is back.  Oh, not that the Strib is going to make anything of it, not yet – not until there are Republicans to blame – but this adds new impetus to the predictions that the state budget – which the GOP dragged out of six billion dollars worth of deficit in 2011-2012 – is heading back to deficit in the budget’s off-year. 

So what does this mean?

Remember that $1.1 billion surplus that the DFL inherited from two years of GOP control?

Well, memories are all we have. If revenues keep falling at this rate, and the shorftall keeps growing at the rate it’s been accelerating this past few months, we’re going to be at over a billion dollars in deficits by the end of this year. 

And the worse news? 

Underperforming:  The budget forecasts were based on the projections of economic activity using the activity of the years of GOP control as a baseline, with growth predictions factored in.

The growth isn’t happening as predicted. 

So for all the DFL/Media’s happy talk about Minnesota’s economy, the MInnesota economy is like a Summit Avenue mansion; the main floor, where the Fortune 500 folks like Target, Best Buy, Ecolab, 3M and the like hang out looks just great – but the foundation is rotting away.

Democrat Fatcat Largesse

Think you’re done paying for football?

Hah.  Dream on, peasant ripe-sucks.

Helga Braid Nation is doing cartwheels that “we” will be hosting a Super Bowl in 2018 at “our” stadium. 

And Mark Dayton is going to soak up whatever sunlight the event gives him among the “Happy To Have Someone Else Pay For My Bread And Circuses” set:

Dayton and members of the city’s bid committee held a news conference Wednesday to celebrate landing the Super Bowl. The NFL chose Minneapolis largely because of its new stadium.

Oh, yeah – even though none of us will be able to afford to attend this particular circus, we’ll all be subsidizing it:

The governor says the state has made no commitments for tax breaks to the NFL apart from a sales tax exemption for Super Bowl tickets that remains on the books from when Minnesota hosted it in 1992.

But Michele Kelm-Helgen, chair of the Minnesota Sports Facilities Authority, says organizers may ask for sales tax exemptions for some of the other festivities.

Here’s a note to Minnesota’s Republicans; here would be a great time to draw the line on the whole “limited government” thing.  Also the “subsidizing billionaires” thing. 

So the next time you find yourselves surrounded by The Walking Meat all dressed up in purple and pounding the Idiot Drums, think to yourselves; in 2012, Mitt Romney and a whole bunch of Minnesota Republicans lost, not because independents didn’t vote GOP – they did – but because conservatives, angry about serial betrayals on the whole “limited government” thing (Vikings stadia, caving in on budget hikes in 2011 before the negotiations even began, etc), stayed home in droves.

(If the Bears aren’t playing, I don’t care.  And if the Vikings are playing, I’ll bring Scarlett Johannson as my date).

Be Thankful, Peasants

Two billion in new taxes.

A 1.2 billion dollar surplus (thanks, GOP majority from 2011-2012!), which means “unexpected” money collected in taxes, and is money that is lost from the economy.

That’s a total of $3.2 billion extra dollars sucked out of the Minnesota economy – about $600 for every man, woman and child in the state, or close to $1,000 for every taxpayer.

And we’re supposed to be thankful that the DFL majority deigns to “give” us $550 million “back”.

That’s about 17 cents on the dollar.

If you gave your cashier a $20 bill for a $15 meal, and you got 85 cents in change, I’m going to guess you wouldn’t be “thankful”…

I’m Jumpin’ NARN Flash, It’s A Gas, Gas, Gas…

Today, the Northern Alliance Radio Network – America’s first grass-roots talk radio show – brings you the best in Minnesota conservatism, as the Twin Cities media’s sole source of honesty!

  • I’m in the studio today from 1-3.  I’ll have Senator Roger Chamberlain on, regarding the dueling Bullying Bills.  Then, we’ll talk with Kim Crockett about the ”Minnesota Exodus”, all of companies leaving Minnesota over taxes. (oops – that’s next week…)
  • Don’t forget the King Banaian Radio Show, on AM1570 “The Businessman” from 9-11AM this morning!
  • Tomorrow,  Brad Carlson is on “The Closer”!

(All times Central)

So tune in to all six hours of the Northern Alliance Radio Network, the Twin Cities’ media’s sole guardians of honest news. You have so many options:

Join us!

NARN Tomorrow

It’s gonna be a huge show tomorrow on the Northern Alliance Radio Network. 

First, I’ll be interviewing Senator Roger Chamberlain about the dueling bullying bills, and why it’s an important battle even if you don’t have kids in the public school system.

Then, I’ll be talking with Kim Crockett about the number of companies leaving Minnesota over taxes.

Tune in 1-3 tomorrow on AM1280 The Patriot!

What Minnesota Deserves

Knowing that the media will never allow it to amount to anything serious, Governor Dayton “takes responsibility” for the MNSure fiasco:

Dayton reacted Thursday to a report from Optum, a unit of Minnetonka-based UnitedHealth Group. The report found MNsure’s problems are widespread and cannot be solved by the March 31 federal deadline for most people to have health insurance or pay a penalty. Optum said the state could try to fix the current system, which could take up to two years, or try to get it minimally functional for 2015 enrollment while building a new system from scratch.

Both options are exquisitely expensive.  There’s an old software engineering saying; “Fast, Cheap, High Quality – you can have two”.

And that’s at best.

And we’re not going to get “at best”.  Why?

Emphasis added:

“Those are the decisions that the new management is going to be making, and obviously the Legislature will be involved and the board and I’ll have my say in it too,” Dayton told reporters.

Even in the private sector, “designed by committee” is a synonym for “Bulgarian goat rodeo”.

Healthcare is impossibly complex; politicians operate entirely in the realm of oversimplification, and that’s even if they have a general sense of “what is right”, which our DFL-dominated legislature does not.

Politics is the worst possible way to allocate scarce resources and solve complex problems.

“But we’re going to fix it. We’re going to improve it. I’m determined we’re going to give Minnesota what it deserves.”

Minnesota already got what it deserved when it swept the DFL into power.

Will it deserve better this fall?

Level To Off

Minnesota tax revenue is off since July.

After a couple of years of faster-than-expected receipts – read “the economy was growing faster than had been predicted”, largely due to GOP economic policies – things are flat to a little slow.

And if you’re a conservative, you already know why “flat” is as good as it’s gonna get (emphasis added):

The state took in more from personal income taxes and sales taxes than budget officials predicted.

Minnesota workers contributed $2.1 billion in income taxes, about $27 million more than state officials projected. Consumers paid $1.1 billion in sales tax, about $46 million more than expected.

Corporate income taxes came in at $342 million, down $11 million from estimates. Other revenue accounted for $457 million, about $64 million below projections.

This the first budget snapshot since new tax hikes on high earners and a menu of sales taxes on business-related services kicked in.

Catastrophic?  Hardly – yet.

Dispositive empirical proof that the DFL tax and spend policy is going to tank the economy?  Not just yet.

A sign that Minnesota’s economy can’t possibly be amused?

I’ll bank on it.

Open Letter To Alliance For A “Better” Minnesota”

To:  Carrie Lucking, “Executive Director”, Alliance for a Better Minnesota
From: Mitch Berg, uppity peasant
Re:  Chain Of Command

Ms. Lucking,

The “Special Session” to deal with disaster relief teed up a few hours ago.

Just a hint; it might behoove you to copy your audioanimatronic marionette “Governor” Dayton on any legislation that gets proposed, or especially passed.  The vision of your audioanimatronic marionette our “Governor” proclaiming shock at legislation that the DFL has jammed through embarasses this state makes your chain of command look “not ready for prime time”. 

It’s pretty simple; route things from Governor Ms. Messinger, to you, to handler “Chief of Staff” Bob Hume, to Mr. Dayton.  And spend some time making sure he really knows what’s getting written into law. 

You’re welcome.

That is all.

Scope Creeps

As Gary Gross notes, the DFL seems at the very least to be floating as a trial balloon that they’re doubling down on the warehouse tax

It’s outside the scope Governor Dayton Messinger wanted for the special session. 

I’m torn on this one.

On the one hand, I think that if the warehouse tax goes into effect, it’s going to be a disaster.  And the DFL, and its Praetorian Guard, the media – will spin it – the job losses, the dislocation, the businesses heading across the Saint Croix, the Red, and Duluth Harbor - as a Republican problem because…well…because Gay Marriage, for the Children.  Or something like that. 

On the other hand, this absolutely is the Democrats’ fault.  “Governor” Dayton signed it, I suspect, without even bothering to get Bob Hume to Ask Carrie Lucking to ask Alida for permission to read it reading it.  Being a Democrat, and a couple generations removed from the generation of Daytons who knew anything about running businesses, it didn’t matter to him. 

This is the sort of issue that conservatives – Republicans – should win big, provided that we’re in a party that has the equipment and expertise to fight a message war.

So can you see why I’m worried?

We Warned You. Oh, Yes, We Did.

2011:  As the GOP majority began working to try to tame Minnesota’s government monkey, the DFL prattled “the GOP is raising property taxes!”. 

It was baked monkey doodle, of course.  The GOP re-focused “Local Government Aid” toward its original mission, helping poor outstate communities, as opposed to subsidizing the urban DFL. 

But in 2012, it was one of the DFL’s big chanting points; “Elect us and we’ll lower property taxes!”, by restoring and boosting Local Government Aid. 

And some of us warned you back then - while the DFL would certainly tuck into the job of wrenching more money out of the parts of the state that pay their way, there’d be no guaranteed cuts in property taxes…

…because the state has nothing to do with what counties charge.

Nothing.  Zip.  Nada.  Zilch. 

But the voters – maniupulated by a lot of emotional issues, and not thinking all that clearly – turned the House and Senate over to the DFL.  And the DFL raised taxes, and jacked up LGA payments to their friends in Minneapolis, Saint Paul and Duluth. 

And then what?

What the hell do you think?   Property taxes aren’t going to budge!

Joe Doakes from Como Park noticed it, and emailed:

St. Paul’s budget proposal has no layoffs; instead, there are new hires and expanded services, which the City Council President Lantry attributes to Local Government Aid received from the State of Minnesota.

Two weeks ago, Governor Dayton and the DFL promised that LGA would produce $120 million in local property tax relief instead of new spending.

But DFL politics aren’t driven by actual results.  All that’s necessary, in a state where the media mostly takes its marching orders from Alida Messinger, is that someone says taxes will go down, probably. 

And that’s exactly what’s happening. 

Doakes:

Nope, not in St. Paul. St. Paul taxes stay the same. The LGA gets spent on fun stuff, not boring old property tax relief. Again.

Joe Doakes

And by “fun stuff”, we mean more government employee union jobs. 

At any rate, I’ll claim a big win here – taxes in Saint Paul won’t drop, and they’ll probably rise.  Taxes in Minneapolis and Duluth will also stay the same, although there will be more “services” that serve precious few at exquisite cost.

The DFL lied.  And it’s you, the taxpayer, that’s paying the price – being taken for a ripe suck at both the state and (most) local levels. 

The funny part?  The DFL’s apparatchiks are still claiming taxes are dropping, even though they aren’t. 

It’s almost like they don’t expect the regional media to fact-check them, or give any coverage to those who do.

Black And White And Green And More Black

Doug Grow – DFL stenographer and reporter for the Joyce-Foundation-supported MinnPost - is convinced that the GOP is lying about the effects of the Warehouse Tax.

Exhibit A?

Grow writes about the Red Wing Shoes’ opting out of building a new distribution center in Red Wing; it’s something we wrote about here in SITD a few weeks ago.  

According to Grow, the GOP’s line is wrong because the executives involved didn’t step out on stage and burn an effigy of Tom Bakk as the cameras rolled. 

Business Is Hard:No, really; asked if the tax was the sole reason Red Wing Shoes deferred its expansion…:

Sachen couldn’t say that it necessarily would have.

Would the project definitely go ahead if the tax were eliminated?

Sachen couldn’t say that was necessarily the case, either.

He did say that the company, which has a facility in Potosi, Mo., is “in talks with Potosi.” But again, he wouldn’t say that there’s a direct link between the tax and the warehouse project.

Who’da thunk it; a businessman whose business depends, on a certain extent, on not pointlessly pissing people off over politics in this rent-seeking environment, gave an honest answer; there are many reasons that a company does or does not go ahead with an expansion.

Which on the one hand means there’s not a smoking gun hovering over “jobs that won’t be created” leading back to the DFL’s Warehouse Tax (point for Grow).  And on the other hand, it means that there never will be that smoking gun. (Take a point away from Grow). 

By the way – Democrats get hurt when conservatives say they don’t understand economics or business.  Reading this next bit, one would have to say “hurt” is probably less appropriate than “chastened”:

Additionally, it should be noted that the Red Wing Shoes warehouse wouldn’t create jobs — other than construction ones in building the warehouse. Rather, it would allow Red Wing to consolidate its current the five warehouses into one facility. Those warehouses, by the way, employ about 80 people, a number that would not increase with a new warehouse.

Er, yeah. 

Making the business – and the efforts of those 80 existing warehouse workers – more efficent gives the business more profit.  Which gets used to hire more people, design more shoes, improve existing products…heck, even just make staying in Minnesota more tenable.  Which means those 80 warehouse jobs stand less risk of becoming 40, or 20, or 0 warehouse jobs. 

It’d also speak to the long-term commitment on Red Wing’s part to keep those jobs in Red Wing, rather than someplace else. 

Leave The Gotchas To The Comedians: Of course, it’s not just Doug Grow.  Dave Mindeman of mnpAct thinks he’s got the DFL Warehouse Tax’s MNGOP critics over a barrel:

In addition, Rep. Garofalo apparently missed the June 28th Star Tribune clarification on where the tax actually applies…..

Myron Frans, state revenue commissioner, said Dayton has asked him to study the issue, and he has spoken with Red Wing officials about their concerns. He said the tax only applies when the producer or manufacturer purchases warehouse or storage services from another firm.

Garofalo offered no other examples of a potential problem. Thus the Red Wing Shoe factory will NOT be affected by this tax.

In other words, Rep. Pat Garofalo is, as usual, making it up.

And Mindeman deigns to condescdend:

I would hope this legislator will someday learn to get the facts right before making another condescending statement of inaccuracy.

Um, yeah.

Garofalo has actually worked in the private sector.  I know this because we worked for the same company, once upon a time; it was he that actually introduced me to the Drudge Report back when we were both minions at a local Fortune 500.

And he knows – as all of us who work in the private sector and pay attention to things do – that businesses rarely make decisions based on single factors, or on short-term stimuli.  Running a significant brick-and-mortar business (shaddap, consultants) is the ultimate long bet; it involves considering everything; access to the needed workforce, communications, supply chain, price to get product to market, taxes…

…and long-term outlook. 

Red Wing – and Laurence Transportation in Red Wing, who also held off on a warehouse expansion that will be directly affected by the DFL’s Warehouse Tax – is betting against Minnesota in the long term, given the way the climate looks now.

And since Mindeman wants to play the “they curiously ignored a Strib article” game, it’d seem he missed one too; Navarre is up and moving to Texas.  It warehouses products – providing the “value add” that the state is taxing – and also works in e-commerce, which is getting slapped by the DFL’s Amazon Tax. 

So it’s gone:

That was the first time the 30-year-old Minnesota firm had said publicly that it planned to move not just some of its warehousing operations but also its headquarters to the site of its recently acquired Speed FC e-commerce operation based in Texas. Navarre acquired Speed FC Inc. last November for $50 million in cash and stock.

Was it just the DFL’s Warehouse Tax?  Or the DFL’s Amazon Tax?

No.  But both of them, and other changes to the state’s business tax code, had to look ugly to a business that’s already losing money – money that will probably be made up by consolidating operations in a lower-tax locale alone. 

If you’re one of the almost 300 employees being pink-slipped, do you think it makes a difference?

They Also Think Penelope Garcia Is Like A Real Investigator: Back to Grow’s column, where in a quote of Governor Dayton’s chief of staff Bob Hume, he shows that…:

  • he is aiming his piece at economic low-information voters, or…
  • …he’s an economic low-information voter himself:

Hume is commenting on Garofalo’s call for a special session to get rid of the tax.  If you work in the  private sector, see if you can spot the clinker:

Bob Hume, the governor’s deputy chief of staff, made it clear that a special session is not in the offing.

“This is a stunt, not a solution,” Hume said in a statement. “The Legislature is coming back more than a month before this tax would take effect, which is more than enough time, if revenues permit, to review and possibly revise this tax.”

A whole month?  To make a decision affecting the profitability, well-being or survival of a business?

These decisions get made based on long-term outlook.

And while the state’s long-term outlook is subject to debate, let’s remember that when the DFL-shilling media says things like…:

To date, though, the Minnesota economy is humming at a far healthier rate than the economies in such business-friendly states such as Wisconsin and South Dakota.

…that the economy still largely reflects Republican policy, set when the state had responsible two-party rule (shaddap about Ventura) between 2002 and 2012.   The DFL’s tax and spend orgy still hasn’t largely gone into effect; even the first of the taxes have been wending their way through the process for about a week now, and the worst is yet to come.

Get back to us in a year. 

Around election time, preferably.

The “Wreck Everything” Legislature

Before the 2012 elections, the DFL tried to call the previous, GOP-run legislature a “do-nothing” legislature.

Leaving aside the obvious – the government that governs best governs least – it was a lie. The 2011-2012 legislatures accomplished some useful stuff – hobbled by a “governor” who was fully-owned by extremist special interests and some very un-conservative detours like the Vikings stadium.

But as we wait at the halfway point of a session of one-party government, what does the DFL have to show for their unfettered power?

  • Business taxes – especially the warehousing tax – that lop a serious chunk off of Minnesota business’ bottom line, and that already have businesses heading for the exits.
  • Two extra billion dollars taken out of the productive parts of the state’s economy.  Remember – Minnesota’s GDP is about $267 Billion.  Another two billion is nearly a percent – on top of the 30-odd billion in state spending that the state already sucks out of productive use.  Imagine having an additional 1% of your productive income taken out of circulation – $500 a year if you make $50K.   It’s not chicken feed. 
  • A home daycare system saddled with useless graft to the public employee unions, and with its revenue further cut by the state’s move into all-day kindergarten – which adds virtually nothing to kids’ education, but does create lots of new union jobs that pay dues to the DFL. 

And all of that at the end of a session that wasted months arguing about DFL social-domination issues (gun control, gay marriage) and power-acquisition. 

In exchange for what? 

So far, nothing but damage.

I’ll take “do nothing”, thanks.

Eggs For The Omelet

The Warehouse tax is going to cause all sorts of damage – and some GOP legislators want to do something about it:

Reps. Tim Kelly of Red Wing and Pat Garofalo of Farmington said lawmakers must act soon because the looming sales tax on warehousing services is already prompting businesses to delay planned warehouse expansions.

But the DFL could scarcely care less:

But a spokesman for the Democratic-Farmer-Labor governor dismissed the request as “a stunt, not a solution.

“The Legislature is coming back more than a month before this tax would take effect, which is more than enough time, if revenues permit, to review and possibly revise this tax,” Bob Hume, Dayton’s deputy chief of staff, said in a statement.

Hume is speaking like a bureaucrat and party stooge who thinks the private sector is the same of a hip club in Northeast Minneapolis.

The tax is already killing jobs!

Kelly said two large Red Wing businesses are delaying expansions because of the tax, and the prospect of losing those new jobs calls for quick action.

Stephen Lawrence, president and CEO of Lawrence Transportation Services in Red Wing, said a 6.5 percent sales tax on his company’s services would put them at a competitive disadvantage with firms in neighboring states, none of which has a warehousing tax. He said his business is considering building facilities in Wisconsin.

Governor Dayton was apparently waiting for Alida Messinger to tell Carrie Lucking what he was supposed to say about this.

 

Governor Messinger Dayton: “Eat The Poor!”

Governor Alida Messinger Mark Dayton, 2011:  ”Rorra rammma hassa humper thunt”.  (Translation:  We’re only raising taxes on the top 1%)

Govenor Alida Messinger Mark Dayton, 2013:  ”OK, poor people gotta pony up too!

The DFL’s current tax plan not only raises taxes on all Minnesotans across the board, but actually raises taxes on the poorest Minnesotans by more than the wealthiest.

2013 Minnesota Tax Bill Incidence Analysis by minnesoda238

Down below is the key table, showing net tax hikes by income “decile”:


That’s right – not only did taxes rise more for the bottom 20% than for the top 10%, but under the DFL plan taxes rose more for the bottom 10% than for Dayton’s friends, family and neighbors in the top 1%!

To add stupid insult to pointless injury – the report (prepared by Dayton’s employees) notes that the taxes on the lower deciles might drop because of “property tax relief”.  But that assumes that city and county governments will pass “their” local government aid raise on to taxpayers, rather than plowing it into more spending – an assumption that history shows is too stupid even to laugh at.

This is the change you hoped for, Working Minnesota?

Hello Steeltown; Goodbye, DFL

Jamestown, North Dakota.

15,000 people.  At confluence of the James and Pipestem rivers, about 90 miles west of Fargo.  Home to a state hospital and psychiatric prison (which sounds like something the MN DFL would build for Republicans, but it’s really pretty normal), a school for the profoundly handicapped, a college (my alma mater, as it happens), and a whooole bunch of agricultural businesses…

…and, soon, an iron mill.

A North Dakota company plans to build a $60 million iron producing plant near Jamestown, N.D., using iron ore concentrate from Minnesota.

A subsidiary of Bismarck-based Carbontec Energy Corp. called E-Nugget North Dakota LLC has unveiled plans to churn out 100,000 metric tons of iron annually using North Dakota sugar beet residue in the mix instead of coke coal.

It’s an interesting project; the plant will extract ore from tailings from the old iron mines up north that used to be economically un-feasible to extract.  There are millions of tons of now-usable ore piled up up north.

It’s Minnesota ore, and the research has Minnesota ties…:

The E-Nugget iron making process was developed by Carbontec and Michigan Technological University over the past five years, including large-scale batch tests at a Minneapolis facility, John Simmons, president of Carbontec, said Monday. The company already has plans to expand to a 300,000-ton plant if the startup goes well.

But the plant is being built in North Dakota.  Granted, it’s Jamestown, which – as it’s been throughout most of it’s history – has been safely tucked away from excessive prosperity.  100 miles east of the oil fields and their jobs, and 90 miles west from cha-cha, booming Fargo (yes, I said “cha-cha Fargo”; it makes sense in context), Jamestown is one of few parts of North Dakota that isn’t overheating economically so far.

But it’s not Flint or Newark or Cleveland.  It’s not even Minneapolis, much less Grand Rapids or Virginia, unemployment-wise.

So why there?

Simmons said the Jamestown site is well-situated because of easy access to sugar beet residue feedstock and also because it is adjacent to a Great River Energy power plant and directly on the BNSF rail line. He said the iron ore concentrate could move from the Grand Rapids area to North Dakota in rail cars that move western coal east but generally have been empty on their return trip west.

“We can get the right quality material from Grand Rapids and the rail routes make sense,” Simmons said.

So let’s get this straight;  Jamestown ND, which is about 90 miles from the sugar beet waste, and probably 300 from the iron ore tailings, gets the plant.

Why’s that?

Magnetation expects to start construction on a fourth plant northwest of Coleraine this year. That plant will produce 2 million tons of concentrate [that's the part you dig up, before you process it into iron] annually and will be ready to feed a new Indiana pellet plant the company now is building to supply partner AK Steel with iron ore for its furnaces by 2015. That new Itasca County facility is expected to employ another 160 people. The Coleraine plant ultimately will shift to get its ore from traditional open pit mining. (The company has shelved plans to build a recovery plant at Calumet.)

 

Simmons noted Carbontec also created an E Nugget Minnesota LLC and considered building the plant in Minnesota using wood waste from logging sites as the reductant or binder. He said the company chose North Dakota instead, in part because it’s so much easier to get permits in North Dakota.

Score one for the DFL Environmental Lobby!  More jobs exported to North Dakota!

Let’s let that one sink in; between taxes and permits, it’s cheaper to ship rock 300 miles than it is to process it in Minnesota.

Thanks, Minnesota DFL!

The Mulligan Session, Part II

The same DFL employees who gave us “E-Pulltabs” as a means of supplying “the state’s share” of an extorted payoff to an out-of-state billionaire for his real-estate upgrade (which fell 95% short of predictions, as predicted by certain right-wing bloggers) are going to try to take a mulligan and get it right on the second try, says this piece from the MinnPost’s James Nord:

The governor’s proposal would increase the cigarette tax from $1.23 per pack to $2.52 per pack – a larger jump than the 94-cent target he’d earlier proposed — and would require retailers and wholesalers to make a one-time payment on existing inventory that would funnel $24.5 million into the stadium reserve account, solving the shortfall there.

Where have we seen this before?

Oh, yeah – cigarette taxes never, ever raise the money they’re supposed to.  They rarely get 2/3 of the way to their goals.  Ever.

And a “one-time tax on existing inventory?”  Look for a fire sale on smokes the week before the tax goes into effect, and for chain convenience stores to shuffle inventory out of state pronto.

Then, if electronic pulltabs or linked bingo games fail to produce the revenue necessary to fund the state’s appropriation bonds for the stadium ["if" - heh.  Ed], the commissioner of Minnesota Management and Budget would have the authority to direct revenue from a closed corporate income tax loophole toward the stadium.

Frans said that closing the “tax avoidance loophole” would prohibit the current legal practice of some Minnesota companies that avoid paying full corporate income taxes on sales they make by shielding themselves through a subsidiary in a different state. He said more than 20 states have similar regulations in effect.

Dear Mr. Nord:  Not that I’m going to tell you how to do your job, but did you happen to ask Mr. Frans what states those were?  And how they’re doing in terms of business climate?  How well “closing” that particular “loophole” worked?

Remember – these are the same people who said “E-Pulltabs” would…y’know…work.

That measure is projected to bring in $26 million in the first year and roughly $20 million annually after that, although those totals could change as the conference committee works out the specifics of their compromise.

Frans said with the new contingency plan, which would also be backed up by current taxes on suites and memorabilia if for some reason it doesn’t perform, officials are ready to close the book on the shaky stadium funding issue.

“We believe it’s reliable, it’s consistent,” he said.

The Messinger Dayton Administration ”believed” a lot of things that didn’t turn out to be true.

If only we had an institution, with printing presses and transmitters and websites, staffed by people who see themselves as part of a truth-seeking monastic order, whose job it was to tell the public about these things.