Capitol Watch: Four positive signs from St. Paul

Capitol Watch is taking a break from all the negativity and polarization in state government to bring you four positive developments we’ve observed in St. Paul. Next week we will return to our regularly scheduled criticism.

Bipartisan agreement to end earmarking funds for non-profits

All eight members of the new House Committee on Fraud Prevention signed a letter to their colleagues asking them to limit grants in appropriations bills that specifically name the recipient. Until recently, there was an unwritten rule against naming grant recipients in bills. Grants typically went to state agencies or other entities who could set criteria, review applications, and provide oversight after the fact. The Office of the Legislative Auditor has been warning the legislature for years to end the practice of naming grantees in legislation and now a bipartisan group of legislators is heeding that call.

Before the ink dried on their joint letter, Sen. Bobby Joe Champion introduced a bill to appropriate $1 million directly to one of his legal clients (Champion practices law). The group, called 21 Days of Peace, was recently denied funding from the City of Minneapolis after their violence interruption workers were charged with felonies in connection with a March shootout. The grant to 21 Days of Peace is exactly the kind of thing the legislative auditor has been warning about.

We nominated Minneapolis violence interrupters for a Golden Turkey Award in 2021.

Governor Walz ordered state workers to return to work half-time

Gov. Walz sent a memo to all state employees telling them they must return to the office at least two and a half days a week beginning June 1, 2025. Most Minnesotans reacted by saying, “Wait, what? They’re still working from home?”

It was a surprising and welcome move from a governor who benefited from millions of dollars in campaign contributions from state employee unions. And the unions are not happy with the decision. A few hundred showed up to protest his house on Summit Ave last week. Walz said he wanted to improve collaboration and foster a better organizational culture by getting employees back in the office at least 50 percent of the time. He also might be trying to help St. Paul Mayor Melvin Carter keep his downtown alive, considering how much St. Paul depends on state agencies for its vitality.

Attorney General Keith Ellison, Secretary of State Steve Simon, and State Auditor Julie Blaha had a press conference this week pledging their fealty to the unions by allowing their workers to continue working from home, even as the rest of society returns to the office. Whatever the reason, it’s the right policy for state employees to return to work.  

House DFL Leader Melissa Hortman threw cold water on hockey arena funding

The top Democratic leader in the Minnesota House spoke out recently about a proposal to refurbish the Xcel Energy Center in St. Paul:

“The days of large state expenditures for professional sports is probably over. The Minnesota Vikings at the U.S. Bank Stadium is probably the last time you’re going to see that for a while due to fiscal conservatives on the Republican side and social progressives on the Democratic side.”

This is good news for anyone opposed to using taxpayer funding for professional sports teams, including our very own Martha Njolomole, who wrote this week:

Setting aside the high price tag, there are several reasons for Minnesotans to be concerned with this proposal.

First, with Minnesota facing a potential $6 billion budget deficit, the state cannot afford to allocate funds to frivolous expenses. Under the state’s borrowing guidelines, the bonding bill for this year will be capped at $700 billion. Any funding to Xcel Energy Center would likely have to replace other, more essential, infrastructure projects.

What’s more, it is particularly questionable that taxpayers are being asked to subsidize the facility of a sports team worth over a billion dollars and owned by a multi-billionaire.

For decades, proponents have argued that facilities like Xcel Energy generate economic activity and, therefore, deserve public subsidies. That idea, however, does not stand up to empirical scrutiny. Research evidence suggests that subsidies for stadiums, particularly, often cost taxpayers more than they are worth.

House, Senate and Walz are talking about budget cuts

As we wrote the last two weeks, none of the parties to this year’s budget negotiation has presented a structurally balanced budget. But all three parties are talking about real cuts to state programs. Gov. Walz was even heard defending his budget by explaining to the press his “cuts” are actually reductions to the increase in spending for certain areas. Welcome to the rhetorical world of Republicans in Minnesota for the last 40 years! The only time the state budget was actually cut was during the Pawlenty administration, and all of those cuts were backfilled with federal stimulus funding.

But this year, everyone at the capitol is at least talking about the right things, such as the fact that human services and K-12 education are the main drivers of spending growth in the budget. The next big fight will be about tax increases. Walz’s budget includes an expansion of the sales tax. The budget targets put forward by Senate DFL also include a tax increase of some kind (they haven’t provided details yet). The House targets do not assume a tax increase.