Tuesday, June 05, 2007

A different way to spend political capital 

The Wall Street Journal (subscribers only) thinks Gov. Pawlenty did very well in beating back the DFL tax increases.
Last month the Democrats who run the Legislature in St. Paul pushed through a big tax and spending increase in their $35 billion state budget. Last week Mr. Pawlenty responded by vetoing all six of the spending and tax bills the Democrats sent him. The usual media and interest group suspects are upset, but Mr. Pawlenty is rallying his own supporters and making himself a defender of the taxpaying middle class.

Not to be too picky, but he actually just line-item vetoed five of the six.
In Minnesota, as in many other states last November, Democrats picked up big majorities in both the state House and Senate. First on the Democratic wish list was a budget plan of the kind now being promoted by the party's Presidential candidates: Offer a few tax savings to the middle class but whack "the rich" with a huge tax hike, and use the revenue windfall to finance teacher pay raises, "universal health care," $200 million in subsidies for the Mall of America, and even a pay raise for legislators.
To be fair, again, the few tax savings were the property tax relief, but as noted before, that was a trade of a yes for a maybe.
The Democratic plan would have raised the state's top marginal income tax rate to 9.7% from 7.85%. That's right up there with California, New York and New Jersey in the top five of confiscatory taxation states. Democrats also proposed a gas tax hike, a new real estate tax, and a tax on cell phones. In all, Democrats wanted to raise some $5 billion in income taxes, and new taxes on gas, beer, real estate transactions, cell phones and even a strange new death tax: a tripling of taxes on hearses. These would have raised taxes by about $2,000 for every income tax filer in the state. The Minnesota League of Taxpayers [more correct, the Taxpayers League of Minnesota --kb] parodied the budget plan as here a tax, there a tax, everywhere a tax, tax.

Every Republican in the House voted to sustain Mr. Pawlenty's veto, and the state GOP, which fractured last year, is unifying around the fiscal debate. "We ran the table on the Democrats," says Mike Wigley, the chairman of the Taxpayers League of Minnesota. "We got no new taxes, no bonding bill for the first time in a decade, and a budget lower than what the Governor proposed at the start of the year." Mr. Pawlenty is under pressure from Democrats to negotiate a new budget, but he holds the political high ground.

One reason Congressional Republicans were run out of their majority was because they lost their "brand" identity as conservative fiscal stewards. Mr. Pawlenty narrowly survived re-election in that dreadful Republican year. Now he's shrewdly expending political capital to good effect to beat back Democratic tax-and-spend policies that could damage Minnesota for years to come. Are Republicans in Washington paying attention?
Someone asked me this morning whether Pawlenty would bring the Legislature back in special session, faked out by the headline on this article in the StarTribune. Despite the whining, I expect the governor to stay strong based on the remarks made by his spokeman Brian McClung last Saturday on our show.

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