John Tuma’s Capitol Update
As the legislative session opens this week, legislators and Gov. Pawlenty have taken some positive early steps for the environment with the capital investments bill. Hopefully they will take some lessons from the leadership of former Governor Floyd B. Olson in 1933.
“We are assembled during the most critical period in the history of the Nation and our state. An army of unemployed; some 200,000 homeless and wandering boys; thousands of abandoned farms; an ever-increasing number of mortgage foreclosures; and thousands of people in want and poverty are evidences not only of an economic depression but of the failure of government and our social system to function in the interests of the common happiness of the people. Just beyond the horizon of this scene is rampant lawlessness and possible revolution. Only remedial social legislation, national and state, can prevent its appearance.”
-Governor Floyd B. Olson, 1933
Those were the words spoken by Minnesota Governor Floyd B. Olson at the beginning of the 1933 Legislative Session during his second inaugural address. Olson is by far Minnesota’s most famous and productive third-party governor. This Hennepin County prosecutor forged together what became known as the Minnesota Farmer-Labor Party that swept him into the governorship at the beginning of the Great Depression. More importantly, he faced Minnesota’s deepest state financial crisis head-on; it is that kind of courage Minnesota needs again in 2010.
In 1933 Minnesota was fully within the grip of the Great Depression with most of its county and school governmental units facing complete collapse. Olson faced a State Senate and most of the state’s newspapers that were squarely against his policies. Regardless of this, he moved forward with the steely determination that was forged in his character from living in the tough north side of Minneapolis as the son of Scandinavian immigrants. He became a master of using the radio to get around the newspapers and reach the people. He even showed up at Senate hearings to go toe to toe with reluctant senators. A fiery orator, he rallied the people of our state to action. No thought was given to coming up with temporary budget shifting schemes to pass the problems on to the next generation.
When the dust settled from the 1933 session, it was one of the most productive in our state’s history. Because of Olson’s unrelenting pressure, the Legislature adopted the state’s first progressive income tax, reorganized the banking system, ratified the federal amendment prohibiting child labor, passed a two-year moratorium on farm foreclosures, expanded cooperatives, limited hours worked by women in industrial jobs to 54 per week, created 13 state forests, and instituted state protection over what would later become the Boundary Waters Canoe Area Wilderness. His radical successes were so evident and bold that many of them were adopted by the new president of United States, Franklin Delano Roosevelt, who looked to Olson as a key adviser. Some have even speculated that had he not died prematurely from cancer in 1936, Olson could very well have been selected by Roosevelt to be his running mate instead of Truman.
At least as our legislative session starts in 2010 we are not facing the depth of economic gloom and “revolution” of 1933 mentioned by Olson. Nonetheless, as legislators returned to their work on February 4, they face the most significant financial crisis our state has experienced since 1933. Minnesota’s sluggish economy is starting to show signs of turning the corner, but it is going to be a slow recovery according to the state’s most recent budget forecast. Minnesota is facing an additional $1.2 billion shortfall which will mean additional cuts this session. This amounts to about 4% of the overall state discretionary budget. Unfortunately, all budget gimmicks and reserves have been exhausted. Further exasperating the situation is the fact that the estimate for the next biennial budget is a $6.6 billion deficit (including inflation).
As Minnesota faces its highest unemployment since the Great Depression, the top priority expressed by legislative leaders as they kicked off the 2010 legislative session this week was to help create jobs. One of the main vehicles for doing this would be an early passage of the state capital investments bill to generate construction jobs and economic activity. Minnesota’s Constitution does not allow the state to borrow money for the general operation of the state budget, but does allow for limited borrowing to do “capital” projects. Typically this means construction of buildings or purchases of permanent assets. Fortunately for the environmental community, several of our programs preserving critical habitat, building wastewater treatment facilities, and developing parks and trails clearly fit under the definition of a capital investment, and it has become a significant source of our traditional funding. Therefore, in each of the capital investment bills the environmental community has competed with prisons, schools, roads and other state construction projects for a piece of the bonding pie.
Both the House and Senate seemed to be showing some of that aggressive “can-do” nature of Governor Olson by moving quickly at the beginning of this session with their capital investments proposals. On the first day of session, both the House and Senate released their proposed packages and the Senate even passed it out of its first committee. The Senate has indicated they will have their full floor vote on the final package by Wednesday of next week. The House has indicated that its full capital investments committee will pass out their bill next Tuesday with final passage in the week following. This is the most aggressive schedule for passage a major capital investments bill in recent history.
One of the key measures for the Minnesota Environmental Partnership as it relates to the capital investments bill is maintaining environmental projects at a level at least equal to the 10-year average of past bonding bills of 22.2%. MEP feels this is a good benchmark for keeping the faith with the voters’ intent under the Clean Water, Land and Legacy Amendment passed in 2008. That constitutional amendment clearly required the maintenance of traditional sources of funding so that the new dollars actually go to their intended purpose as opposed to just being a temporary fix to a budget crisis. Generally the proposals by the Governor, House and Senate have kept this faith with the voters.
The Governor’s overall bonding bill for general obligation bonds is rather low at $684 million, but he still keeps the faith with the voters by proposing that almost 24% of his package be dedicated to environmental and conservation programs. Unfortunately, his transit proposals are low without any real vision of developing a coordinated transportation system for future generations.
The Senate has just under $1 billion in general obligation bonds with about $243 million dedicated to environmental and conservation programs. The math is pretty easy to determine the percentage at 24.3%. The Senate does improve on the Governor’s transit numbers by providing $30 million, but this is still significantly below the overall need put forth by our friends at Transit for Livable Communities. The House proposal was slightly over $1 billion in general obligation bonds with approximately $257 million designated for environmental and conservation programs. The House also demonstrated the greatest commitment to transit of all three proposals at $50 million.
One of the key differences in the environment area will be how the program and the amount of funding for flood mitigation is handled throughout the state. The Senate has some $70 million for flood mitigation compared to the House number of $60 million. There appears to be significant differences in how the two bodies would structure the funding, with the House more focused on water retention projects. The only reason flood mitigation is part of the environmental community’s initiatives is a significant added benefit that water retention projects have with regards to expanding habitat for waterfowl and other wildlife. This will be an area of major focus for several of our groups.
Minnesota policymakers in the year 2010 are definitely facing the most significant financial crisis since those faced by the state in 1933. Hopefully they will be as productive as our forefathers were in addressing the problem. At least the first steps with this session’s major capital investments bill have been steps in the right direction for the environment and conservation community. Unfortunately, in our caustic political environment there are no guarantees that there will be an easy road ahead. Stay tuned for an interesting, but hopefully productive, session for the environment.