Chanting Points Memo: Targeting The Cities

The “first class” cities – Minneapolis, St. Paul and Duluth – are, predictably, howlin’ mad over the proposal to return Local Government Aid (LGA) to its original purpose – help out poor communities.

Both the GOP-controlled House and Senate this week passed a tax plan that would cut the amount of local government aid that cities across the state are certified to receive this year by 26 percent or $137 million.

Republicans say the effort is needed to balance the state’s budget deficit. But critics say it’s a politically charged move aimed at crippling urban centers — which are largely governed by Democrats.

It’s buncombe, of course.  The cities crippled themselves.

The linked piece – by MPR’s Laura Yuen – is balanced enough, but it’s clearly cribbed this next bit from a DFL or League of Minnesota Cities (pardon the redundancy) handout:

LGA was part of a series of tax reforms in the ’70s known as the “Minnesota Miracle.” It was designed to pay for basic services — from parks to public safety — that cities with greater needs couldn’t cover through property taxes alone. The idea was no matter where you lived in Minnesota, your quality of life would be consistent.

The key part Yuen left out – it was initially aimed at small, poor outstate cities with smaller, aging tax bases.  At the time, the Twin Cities were wealthy – booming, even.

And that’s where things start to break down.

Here’s the quote that set me off.  Saint Paul mayor Chris Coleman said:

“If the leadership of the Republican Party wants to come and look through my budget, tell me how many cops they want me to lay off, tell me how many fire stations they want me to close, tell me how many libraries I’m supposed to close. The fact of the matter is they’re governing in ignorance. They don’t know what we do. They have a mythology of what cities do. They have a mythology of where we spend our money.”

Now, I think Coleman is being tongue in cheek – there are most certainly Republicans in Saint Paul who’d be happy to take him up on that very offer, and none of us have heard from him yet.

But let’s say he has a point; let’s say the Saint Paul budget – notwithstanding its electric cars and loafing employees and brand-new indoor ice rinks in a city that is below freezing seven montsh a year  – really is cut to the bone.   Maybe, in that case, it’s not a spending problem.

Maybe the problem is that Saint Paul – and Minneapolis and Duluth – once prosperous cities, don’t have enough tax base to support the spending they want.

And there’s the problem; the governments of the Big Three cities – Minneapolis, Saint Paul and Duluth – have been doing their best to become poor cities.

Not, perhaps, in the sense that they actually sat down and tried to dive into a vortex of crime and poverty; that’d be a silly claim.  Probably.

But looking at the history of the Twin Cities and Greater Minnesota from the 1960’s through today, it’d be hard to say how the DFL majorities would have governed differently if they had been trying to flense their cities of prosperity and gut them of vitality:

  • Minnesota, driven by the Scandinavian communitarianism which had served small, impoverished communities in the old country well, adopted a highly comprehensive welfare system; in many ways, by the 1980’s, it was the “best” in the country.  DFLers saw it as a sign of advanced civilization; Conservatives rightly noted that if you pay people to do something – in this case, nothing – people will take the money.
  • The state, like much of the country, adopted service-based budgeting; in other words, if you spend $100 on a service this year, and the person providing the service guesses the need will rise 10% next year, then you pay $110 next year.  This was put on auto-pilot, so that in effect social spending could not shrink.
  • In the meantime, Minnesota also become the softest-on-crime state in the Union, a distinction we still hold.
  • The Big Three cities also became warehouses for the poor, both “inadvertently” (“urban renewal” and highway construction gang-raped the property values in the inner cities) and on purpose (centering welfare services in the Big Three cities – partly out of government convenience, partly to build a large pool of voters who were dependent on the DFL’s bureaucracies, either as employees or clients.
  • DFL tax and spending policies – and those of the “Independent Republican” party, which were largely indistinguishable from the DFL – aggressively stripped businesses from the Big Three cities.  Look at a list of Minnesota’s major corporations; the ones that existed in 1970 (3M, Ecolab, the parts of “Daytons” that became Target) have done all their expanding in the ‘burbs, or in other states (the network of plants that 3M used to have in Saint Paul is a distant memory); the ones  that sprouted up since then (United Healthgroup, Best Buy, Medtronic) have all located in the suburbs from the very beginning.   The jobs – and the people who worked at them – moved outside the cities.
  • In their quest for “affordable housing”, the Big Three cities have virtually outlawed “affordable housing” on the private market.  Starting in the eighties, the cities stigmatized small, “absentee” private landlords (Saint Paul DFLers can’t refer to them as anything but “slumlords”).  Focusing on outcomes (“the poor should have nice housing!”), the cities’ bureaucracies essentially made it impossible to rent out housing that didn’t meet the cities’ absurdly high standards (Government-owned housing wasn’t held to the same standards, naturally).  The process is in the process of culminating right now; as a mammoth surge of supremely affordable housing gets foreclosed onto the market, the cities – led by Saint Paul – launched a campaign to actively crush private, market-driven low-income housing.
  • While all this was going on, Minnesota in effect developed two school systems; a blighted, addled, watered-down system in the cities, and a modestly capable one in the ‘burbs and outstate.  The vortex has accelerated, as school choice – charter schools and open enrollment – have taken the families, especially low-income ones, that actually care about education out of the public system.

So over the course of forty years, the DFL’s policies have denuded the Twin Cities of everything – jobs, primary education, quality of life, affordable places to live – for anyone that isn’t already thoroughly comfortable or, by the opposite token, a government client.

Opponents of the current system say that cutting LGA will expose the urban DFLs’ free-spending wastrelcy to their taxpayers.  But it’s worse than that.  It’ll expose the extent to which the DFL administrations have not only cooked the golden goose, but then let it go bad in the refrigerator.

6 thoughts on “Chanting Points Memo: Targeting The Cities

  1. Maybe, in that case, it’s not a spending problem.

    Maybe the problem is that Saint Paul – and Minneapolis and Duluth – once prosperous cities, don’t have enough tax base to support the spending they want.

    But doesn’t that mean that is IS a spending problem?

    the ones that sprouted up since then (United Healthgroup, Best Buy, Medtronic) have all located in the suburbs from the very beginning.

    I have heard unofficial chatter from people far more connected than I at UHG, that it would not be out of the realm of possibility for UHG to move their HQ (as recognized by legal and financial circumstances), to one of the East Coast locations if things got too hostile for business in MN. That would be a HUGE blow to MN State revenues.

  2. On a lighter note…

    wastrelcy

    I have never heard this word before, so I had to google it. You are responsible for google hits #2-6. Good job 🙂

  3. You’re hitting all the high notes, Mitch. Music to my ears.

    One quibble: the hockey rink built in the park at Northdale Rec is an OUTdoor rink. They laid pipes on the ground then poured a huge slab of concrete over it. The industrial-sized refrigeration unit sits next to the rink. The rink is used during hockey season same as an ordinary rink, not year-round.

    The whole thing cost a cool million but was absolutely crucial to the delivery of essential services in St. Paul because, as you know, we occasionally have a January thaw that results in soft ice on the rink and interferes with kids’ hockey. Can you imagine the horror, the anguish, the childhood trauma?

    I’ve never seen them but I’m reliably informed that the companion rinks at Phalen and Highland are identical.

    Now I concede that a lousy $3 mil for refrigerated outdoor hockey rinks is a drop in the bucket for a classy outfit like the City of St. Paul. But my back-of-the-envelope scratching leads me to believe that all the property taxes paid by me and all my neighbors on this block FOR THE NEXT 20 YEARS will not be enough to pay for our new rink. We need help. We deserve it.

    It’s too bad there isn’t any fat in the budget to cut but hey, we have our priorities, you know. Elk River, Deer River, Thief River Falls should just pony up and shut up.

    .

  4. Outstanding analysis Mitch, you absolutely nailed it on the head. LGA was never intended to be a permanent wealth transfer.

  5. Bill C;

    Buddy, you have hit the nail right on the head and UHC isn’t the only company considering that move. There are reasons that companies like 3M established a beachhead in Austin, TX, Medtronic and Mayo did so in Arizona. Most recently, Moneygram International, a corporation born and grown in MN, moved their corporate HQ to TX. Of course, the upper management of the company that purchased MGI, were all from there, but I know a couple of high realtors that were looking for houses for them here, when they suddenly changed direction.

    I dare say that every MN based company with global reach, either has or is at least considered moving their HQ out of here.

  6. Pingback: Shot in the Dark » Blog Archive » It Was Mayor Coleman’s Idea

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