Dayton, Horner clash over budget fix

Talk about it

ALEXANDRIA — Two of the three major candidates for governor shared their views on education, eco-nomic development, local government aid and the state’s budget woes Monday night in Alexandria.

DFLer Mark Dayton and Independence candidate Tom Horner both agreed the state faces huge challenges ahead with an aging popula-tion, pressing transportation needs, inadequate education funding and rising health-care costs.

But they disagreed sharply on how to handle many of those problems.

The biggest contrast was in their budget plans. Dayton wants to raise the income tax on the state’s richest house-holds while Horner favors an increase in “consumption taxes” on products such as cigarettes, while extending sales taxes on items such as clothing and certain ser-vices.

The Alexandria Area Eco-nomic Development Com-mission and the Alexandria Lakes Area Chamber of Commerce sponsored the forum.

Republican Tom Emmer, the other leading governor candidate, was unable to attend because of commit-ments in the southern part of the state.

More than 200 people at-tended the two-hour event at the Alexandria Technical and Community College. Tom Jacobson, assistant city attorney, moderated the dis-cussion.

After three minutes of opening remarks, Dayton and Horner were given a series of questions from a three-member panel, which included Rick Paulson from Douglas Machine, Julie Critz, director of teaching and learning from School District 206 and Alexandria Mayor Dan Ness.

Horner appeared the more aggressive of the two. At one point, he criticized Dayton for “not saying no” to any of the funding questions that were asked. He added that Dayton’s plan to solve the state’s budget shortfall by eliminating waste, tax fraud and abuse “doesn’t add up” and amounts to the “same tired answers” that were presented 12 years ago.

Dayton’s sharpest criti-cism was aimed at Horner’s “regressive” sales tax ideas, which he said would hurt the middle class. Dayton also said that Horner’s plan to eliminate ethanol credits and grants for wastewater plants would harm the state’s business climate.

Here’s a summary of the candidates’ views on the topics that were discussed.

Education

Both candidates found fault in the federal “No Child Left Behind” Act and said sweeping reform is needed.

Horner said the act con-tains so much structure and rigid requirements, that it doesn’t engage kids or moti-vate teachers. He said the program should be replaced with one that offers more flexibility and a greater in-vestment in early education.

Dayton said the act, which he opposed as a U.S. senator, was a “broken promise” by the federal government to support education. It was supposed to provide states with 40 percent of funding for special education but in reality, provided only half that amount, he said, adding he tried to increase the fund-ing seven times in the Senate but was unsuccessful.

Dayton said that the act also imposes testing re-quirements – 61 mandated tests for students in grades 3-11 – without financial back-ing.

When asked how they’d create new revenue streams for K-12 education, Dayton said his plan to raise taxes on high incomes would pro-vide adequate funding with-out relying on shifts. He said shifts amount to nothing more than reaching your hand in someone’s pocket and taking their wallet.

Horner said that the shift in education funding was a bipartisan effort by the De-mocrats and Republicans who didn’t want to deal with the state’s $6 billion shortfall. He said the state needs to “act big” with sustainable, long-range approaches to education funding.

While addressing higher education needs, both Day-ton and Horner agreed that education should be viewed as a lifelong learning proc-ess.

But once again, they dis-agreed over funding.

Horner said that the state should consider a realign-ment of the two- and four-year colleges and re-examine ways to reduce costs.

Dayton said increasing the taxes on the state’s top 4 per-cent household incomes was less regressive and less pain-ful to the middle class than Horner’s plan to increase sales taxes.

Horner responded by say-ing that his plan was sup-ported by economists as be-ing better than Dayton’s or Emmer’s. He added that within Dayton’s own party, leaders such as Tom Bakk and Ann Rest supported a sales tax approach.

Local government aid (LGA)

Both candidates said they would continue LGA at the present levels.

Horner said the formula needs to be examined so that the right communities are receiving the right amount of aid. He said local govern-ments should be exempt from paying state sales taxes and that should be calculated into the LGA.

Horner said the state needs to look beyond LGA in ad-dressing rural Minnesota needs, such as helping nurs-ing homes. He said that 28 percent of the nursing homes are in jeopardy of closing.

Dayton said he’d fund LGA at the current levels through the 2012-2013 biennium.

He said that cities have had to deal with LGA cuts by cutting services and pressing needs. Alexandria, for ex-ample, didn’t hire two police officers and it cut back on repairing streets, Dayton said. He added that studies have shown that every $1 cut in LGA results in property taxes going up 67 cents.

Both Horner and Dayton said they’d work to reduce unfunded mandates.

Horner said he’d propose a three-year sunset on all man-dates so the state could evaluate them and decide which ones to keep and which to discontinue.

Dayton said he would seek a bonding bill of $1 billion to pay for projects that would generate construction jobs.

Horner said that asking taxpayers to support a $1 billion bonding bill goes too far in light of the economy. He supports a $400 million bond bill that would place a priority on bridges, roads and academic projects.

Health care

Horner said that Minne-sota’s General Assistance Medical Care (GMAC) be-longs in the “hall of shame.” He said the program doesn’t save healthcare costs and instead just shifts the burden on local hospitals.

Both Horner and Dayton said that instead of GMAC, the state should allow people an early opt-in for the federal medical care.

Both Horner and Dayton said that one way to cut medical costs is to allow eld-erly people to receive care in their own homes instead of going to nursing homes.

Horner said that nursing homes need to be reim-bursed at a rate that meets their costs. He said they should also be given more flexibility in licensing to open beds up for those need-ing less intensive care.

Manufacturing and

economic development

When asked how the state could make Minnesota’s manufacturing industry more competitive in a global economy, Horner stressed the importance of seamless lifelong learning – breaking the “silos” of K-12 and two- and four-year colleges – to provide the training and skill sets the industry needs.

Dayton agreed that educa-tion should be a lifelong process. He said it was im-portant for the state to invest in colleges so they could meet manufacturers’ needs.

Both Dayton and Horner had problems with the state’s tax-incentive pro-gram, Job Opportunity Business Zones (JOBZ). They pointed to a state audi-tor’s report that showed the program mainly shifted jobs and dollars into other parts of the state instead of bring-ing in new businesses.

Horner said that JOBZ should be phased out and replaced with investments in education and infrastruc-ture. He also wants to elimi-nate sales tax on capital equipment purchases and create new incentives for businesses to invest in re-search and technology.

Dayton said that the state’s infrastructure needs are lagging. He said that the state needs to invest more in seamless broadband cover-age.

Horner said that the state can’t just rely on a gas tax to meet infrastructure needs. He noted that the Minnesota Department of Transporta-tion said the state needs $65 billion to meet those needs in the next two years but only $15 billion in funding has been identified.

Judicial system

When asked what their plans were to adequately fund the judicial system, Dayton said that Chief Jus-tice Lorie Skjerven Gildea was correct when she said that any further cuts could break down the system. As governor, he said he’d urge the chief justice to submit a budget, which he would pre-sent to the Legislature.

Horner was critical of the idea. He said that as gover-nor, he wouldn’t give any department a blank check.

State budget

The candidates were asked to present their two or three top ideas to raise state reve-nues.

Horner said that his con-sumption tax plan could raise revenue while offering protection for low-income families by exempting cer-tain items like groceries, prescription drugs, chil-dren’s clothing and medical services.

He added another source of revenue would be to close deductions that favor the wealthy.

Dayton said that besides taxing the top wage earners, he would reform tax resi-dency laws by taxing those who spend a third or half of the year in Minnesota.

Dayton said he’d also go af-ter those who evade taxes.

When asked how they’d reduce spending, Dayton suggested outsourcing state contracts, reducing man-dated testing in schools and streamlining state govern-ment.

Horner said that Dayton’s ideas to eliminate waste, fraud and abuse don’t go far enough. He said the state has to make hard decisions to rein in health care costs and the looming problem of pub-lic pension plans.

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