Capitol Watch: Walz pettiness over budget surplus

Governor Tim Walz received some very good news this week when they announced the state budget survived the 2023 legislative session and in fact is still delivering more money than even he can spend, at least in the short term. Walz briefly celebrated his victory, using the completely unoriginal phrase “morning in Minnesota.” But as soon as the press asked the first question, Walz reverted to his most comfortable activity: attacking Republicans.

“Republicans want to cut school meals and lower corporate tax rates. They want to ban books!” said Walz.

No Republicans in St. Paul actually said those things, but the truth doesn’t really matter to Walz. It’s a tactic he learned from his predecessor Mark Dayton: Make up an outrageous Republican message before they speak and then react to the message with righteous indignation. Even with good news to share, Walz can’t resist going after Republicans and putting words in their mouth that were never spoken. It’s unnecessary, petty, and reveals a deep insecurity about his agenda and his place in politics.

Forecast says short term surplus, long term deficit

The Office of Management and Budget released the February forecast Thursday showing an improved outlook for the economy and the state budget for the current two-year budget cycle. The state is on schedule to spend $70.5 billion in fiscal years 2024-25 with $60.9 billion in revenue. The difference will be made up with the huge $17.2 billion surplus from last year, leaving us with $3.7 billion on the bottom line.

The forecast for the next budget cycle also improved but still shows the state spending $1.4 billion more than it will take in ($66.2 billion in spending against $64.8 billion in revenue). The Walz administration admits this a “structural deficit” but claims everything will be fine as long as the legislature doesn’t spend the $2.2 billion balance that’s expected to carry over from the current (24-25) budget.

Even though the Minnesota economy continues to deliver tax revenue to the state at surprising rates, it’s hard to ignore the fact that we’re spending more than we’re taking in. I use the word surprising because it’s amazing the economy is still growing after all the tax increases foisted on it since 2013. Corporate tax revenue is projected to rise by $940 million by 2027, allowing Tim Walz to mock Republican arguments against taxing business as “theoretical.”

He’s right. Theoretically, taxing businesses the way we do in Minnesota should result in less activity and less revenue to the state. But Minnesota’s diverse economy continues to be resilient to whatever state government throws its way.

Immigration risk brushed off

In every budget forecast, the state economist includes a slide on forecast risks.

One risk conspicuously absent from this list is the effect of illegal immigration on the country and on Minnesota. The press asked State Economist Dr. Laura Kalambokidis about immigration, and she asserted it is still a net positive for the economy in terms of adding to the labor force. No mention of the cost of illegal immigration on school enrollment, health care (free for immigrants) college tuition (free for immigrants) and crime.

Illegal immigration could turn out to be a huge drain on state and local resources, just like we’re seeing in New York, Chicago and Denver. And the problem will be exponentially worse if the legislature adopts the proposal to make us a sanctuary state. (If you haven’t sent an email to your legislator about this yet, click here).

Gender versus religious freedom 

A stunning hearing in the House Judiciary Committee saw House Democrats and the Walz administration defend language passed last year amending the state’s Human Rights statute. Not exempting gender identity from the religious exemption to the Human Rights Act is preventing religious organizations and schools from hiring staff who adhere to their belief system. This is foundational to our First Amendment rights to religious practice and expression.

While the DFL voting down an amendment from Rep. Harry Niska to fix the problem was bad enough, the rhetoric from three members of the committee should concern people of faith across Minnesota.

Rep. Brion Curran (DFL-Vadnais Heights) gave a bizarre speech calling Niska’s amendment a “direct attack against the trans and non-binary communities.” She went on to say “you can’t respect certain people when you don’t believe they exist.” This is becoming the tired refrain of LGBTQ activists everywhere: “You don’t believe I exist.” It’s not about you, Rep. Curran. No one disputes you exist. We just think churches and religious schools should have the freedom to hire staff that support their beliefs.

Rep. Leigh Finke (DFL-St. Paul) picked up where Curran left off claiming “they are in your schools. Trans kids are in your schools, 100%, every single one of your schools.” It was very telling to hear the DFLer speak of representing the trans community in the legislature as if that’s the constituency — not the people in District 66A in St. Paul.

The most offensive remarks came from Rep. Luke Frederick, who started with “I was raised Catholic.” When someone starts with “I was raised Catholic,” you know they’re going to go sideways real soon. Frederick said the core takeaway from his Catholic upbringing was “Love they neighbor, to accept thy neighbor.” He then accused those who testified in favor of the amendment (representing Catholics, Lutherans, and Muslims) of being judgmental saying, “Everyone who testified today was casting stones.” The Capitol Watch newsletter is not the place to dive into how poorly Rep. Frederick listened to his teachers during his Catholic formation. Let’s just say he insulted people of faith in Minnesota. 

Look for this clash of gender rights verses religious freedom to appear on the House and Senate floor before the end of the 2024 session. 

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