This legislative session could've been a contender

As this session of the Minnesota Legislature comes careening to a close, the rush will be on to define what happened.

Republicans will say they held the line on spending, but ignore that it came at the cost of adding to public debt. Gov. Mark Dayton and Democrats will brag that they worked across the aisle to streamline business permitting. But they failed to secure bipartisan cooperation on the issues most important to Minnesota's economic competitiveness.

The session isn't over, and legislators might still be able to pass some minor tax legislation, may agree on a bonding bill and might even find accord on a Vikings stadium bill. But when it's all said and done, a session that could have been historic too often was histrionic.

Stubbornness and short-sightedness on both sides make this session the "coulda, shoulda, woulda" Legislature.

Start with tax reform. There "coulda" been at least the start of reform this session. Minnesota's taxes are uncompetitive, unfair and unsustainable. In spite of a decade of cuts in state taxes and expensive incentives (like JOBZ) to spur job creation, Minnesota is creating new jobs at a pace significantly slower than the national rate. It's clear that the formula for growth has to be more strategic than just cutting taxes.

It's easy to blame the "no-new-taxes" Republicans, and they deserve their share. But Dayton's "tax-the-rich" insistence also fails the test of leadership. Clearly, Republicans never will accept Dayton's demand to tax the rich by adding a fourth tier to the state's income tax (and there are legitimate policy grounds for that view). Yet, Dayton persisted in demanding that concession from Republicans.

Instead of gridlock, reform could have been built on principles Dayton shares with many Republicans -- a tax system that is simpler, rewards investment and reduces the cost of doing business in Minnesota. This common ground could produce good policy and achieve some important priorities. Take Dayton's issue of taxing the rich, for example.

Streamlining the tax code -- a Republican priority -- could lead to eliminating or capping some of the credits and deductions that disproportionately favor the wealthy. This "coulda" been accomplished had Dayton offered thoughtful leadership rather than partisan rhetoric.

Given our state's ongoing fiscal challenge, the Legislature "shoulda" tackled true spending reform. Dayton, too, has favored the status quo over innovation. Still, the larger badge of failure here rightly should be pinned on Republicans. The GOP's single-minded focus on reducing the size of government leads to a misguided belief that any dollar cut from government budgets is a dollar saved.

Reality tells a different story. Look at the outcomes the devotion to spending cuts is producing in the state's two largest spending buckets, health and education. Sadly, Minnesota was the only state with a "statistically significant" increase in the number of uninsured children between 2008 and 2010, according to a Georgetown University study.

A similar trend is occurring in education. The four-year high school graduation rate among Hispanics and African-Americans is less than 50 percent, creating one of the worst racial disparities in the nation.

Less healthy and undereducated children are long-term cost drivers -- a reality supported by common sense and reputable studies. The Republicans' shortsighted approach to government spending is costing our state its future.

There are sound solutions to all these challenges. The 21st Century Tax Reform Commission, the Budget Trends Study Commission and the Minnesota Citizens Forum on Health Care Costs chaired by former U.S. Sen. Dave Durenberger are among many bipartisan studies that provide road maps for innovation. The bottom line? Minnesota doesn't suffer from a lack of good ideas, but from a lack of political leadership.

Throughout this legislative session, policymakers' questions too often have focused on how much Minnesota is spending or taxing. Better answers would have come from a different question: "What are we getting in return?"

Dayton and the Legislature "coulda" started on tax reform and "shoulda" made progress on linking spending to outcomes. There still is time for both sides to offer leadership. Absent that leadership, we may look back in 10 years and regret what the state "woulda" been if only policymakers had made the tough, though right, decisions today.

----------------

Tom Horner is a public-affairs consultant and was chief of staff to U.S. Sen. Dave Durenberger, R-Minn. Tim Penny is president and CEO of the Southern Minnesota Initiative Foundation and is a former Democratic member of Congress. Both are former Independence Party candidates for governor.