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Capitol View®
Mike Mulcahy

Daily Digest: Out of the blue, into the black

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Good morning, and welcome to Friday. The budget forecast is out and everyone at the Capitol agrees on everything, right? Not so much. Here's the Digest.

1. Forecast shows surplus. Gov.-elect Tim Walz and a divided Minnesota Legislature will have a $1.544 billion surplus to work with next session as they craft the state's two-year state budget. State budget officials released the latest economic forecast Thursday, kicking off what will be a busy budgeting year in St. Paul. The surplus is welcome news, but it won't necessarily make crafting a $48 billion state budget any easier. Republicans say the surplus is a result of economic growth spurred by recent state and federal tax cuts, and more tax relief should be on the table next session. Democrats say their priorities will be more spending on education, health care and other programs, which Minnesotans elected them to do this fall. (MPR News)

2. Surplus sets up session fight over health care, gas tax. The projected surplus led legislative Republicans to say Thursday that DFL proposals to raise the gas tax should now be off the table. But Democrats, including Walz, aren’t budging. Walz will use this forecast to assemble his first two-year budget proposal, which is due in February. In responding to the surplus news Thursday, he was vague on what might be in that spending plan. But he made it clear that the gas tax increase he campaigned on to pay for transportation projects was still in the mix. “This is the type of infrastructure investment and planning that should extend beyond administrations to get this right.” Walz said “generational investments” are needed in education, health care and transportation. He said the people he talked to on his recent listening tour agree. Walz said one-time spending of surplus money isn’t enough. “We are not laying down red lines in the sand. What we’re saying is that Minnesotans were very clear throughout this tour that infrastructure and infrastructure investment was a major priority for them. Long-term investments are going to have to make that happen.”  Republicans disagree. They say there's plenty of money for transportation without raising taxes. Senate Majority Leader Paul Gazelka, R-Nisswa, said the surplus shows that state government can live within its current resources. He said this is not the time to be considering a gas tax increase. “I’m thinking about where the people are. We care about what the people have to pay. And if they have to pay more at the pump, we don’t want that to happen. Now that we have this kind of surplus, I think we can navigate around that.” Gazelka said instead of raising taxes the Legislature should consider cutting them. (MPR News)

3. Ongoing health problems make final weeks in office bittersweet for Dayton.   This was not exactly how Gov. Mark Dayton wanted to spend the last weeks of a last turn in public office. His voice labored and his mobility severely limited, the two-term governor and 40 year figure on the Minnesota political stage appeared Thursday in one of his final news conferences. It was his first extensive appearance in public in more than a month. Dayton’s main objective was to highlight a fiscal turnaround during his eight years at the helm -- from a $6.2 billion dollar deficit when he came in to a $1.5 billion projected surplus to hand off to his successor, fellow Democrat Tim Walz. “It shows a remarkable recovery from the financial shambles when I took office eight years ago,” Dayton said. Dayton’s personal recovery from a pair of October back and spine surgeries is far from over. One procedure damaged his lungs and ability to breath without some reliance on an oxygen tank. “My lungs have improved but they are still not nearly what they were before. Whether there will be a permanent recovery remains to be seen,” the 71-year-old said. “It’s not the way I would wish to go out as governor. That’s the biggest disappointment.” Dayton said he had visions of touring the state to check in on projects or programs he helped usher in. (MPR News)

4. More on the finalist for U of M president. Joan Gabel, the sole finalist for the top job at the University of Minnesota, has forged a reputation as a down-to-earth, approachable leader. As a provost at the University of South Carolina, she has been tested by protests over student and faculty diversity, concern over rising costs, a push to innovate more with fewer resources and two hurricanes — issues that, except for the hurricanes, are bound to consume the next president at the U as well. A former attorney, award-winning business law professor and dean, Gabel, 50, has brought a collaborative style and low-key charisma to tackling academia's challenges, some who know her say, though her efforts are a work in progress. "I saw her grow in her role," said Marco Valtorta, who chairs the USC faculty senate. "She has become a very confident academic leader." (Star Tribune)

5. Law change leads to headaches for Medicare recipients. A change in federal law is forcing hundreds of thousands of elderly Minnesotans to replace their health plans that supplement Medicare coverage. Medicare is the national health insurance program for people age 65 and older and some disabled people. Many buy supplemental insurance to help pay the portion of health costs Medicare does not cover. About 350,000 Minnesotans are losing their Cost plans. And at advanced age they now have to sort through options that would be complex and confusing for anyone. “Beneficiaries that previously never did anything during open enrollment now have to make a change for the first time in many, many years, if ever,” said Minnesota Board on Aging Health Policy Analyst Kelli Jo Greiner. The board’s Senior LinkAge line is having trouble keeping up with demand for help, she said. “It’s not only confusing, it’s very frustrating.” (MPR News)