Friday, April 10, 2015

Monday, March 30, 2015

With God on Our Side: Religion, Bigotry, and Indiana

In a many dark hour
I've been thinkin' about this
That Jesus Christ
Was betrayed by a kiss
But I can't think for you
You'll have to decide
Whether Judas Iscariot
Had God on his side.

With God on Our Side--Bob Dylan

Need we tolerate the intolerant?  Do individuals have a First Amendment religious right to discriminate or be bigots?  These questions are really at the heart of much current political debate in the United States, most recently with the decision of Indiana to enact legislation purportedly giving individuals a religious right to refuse to serve individuals in their businesses.
Indiana’s new law is only the most recent manifestation of how the religious right drives a political cleavage through contentious issues.  Gay marriage, abortion, and matters of discrimination seem to pit the moral views of some against the personal liberty of others.  They raise questions about the limits of toleration in a free society.
It was not simply Indiana’s new law that made me think about toleration.  A couple of weeks ago I gave my students an assignment where they had to do some analysis with public opinion data.  I did not care what numbers they crunched– simply play around.  In class one student talked of her perplexity.  She decided to see what relationship there was between religious attitudes and support for reproductive rights for women.  She was perplexed to find overwhelming support among self-identified Jews for abortion rights.  She did not understand why until one of my Jewish students told her that within her faith an unborn fetus is not a person until born.  My student was surprised–she did not understand that not all faiths agree with the Christian idea that the fetus is a person.
Similarly, last week I received an e-mail from some individual who had read an article of mine.  He urged me to support a constitutional amendment to declare the fetus a person.  I wrote back and told him that what a woman does with her uterus is none of his, mine, or society’s business.  He wrote back and accused me as being under the delusion of radical feminism.
Both stories speak of the issue of toleration and respect for the choices others make.  They are about why in a free society there are limits to enacting your personal morality or theology into public policy.
Many forget that the concept of toleration is a modern Western European invention, born out of the exhaustion of the religious civil wars and the split between the Catholic Church and Protestants in the sixteenth century.  A theological government that does not respect the separation  of church and state is free to define orthodoxy, foisting upon dissenters, critics, and non-believers their view of truth in the name of God.  The 1598 French Edict of Nantes recognized the right of Protestants to believe what they wish.  British King James II and the Glorious Revolution of 1688 were about the religious toleration.  America’s founding with the Pilgrims and Puritans too were about religious toleration.  All of these historical events speak to a gradual recognition in the West that the church should be separate from the state, individuals should be free regarding what they believe, and that there were limits to orthodoxy and what a majority can compel a minority to believe or do.
The hallmark of a modern free society is balancing majority rule with minority rights.  James Madison declares that to be the case in his Federalist Paper number 10.  Alexis DeTocqueville’s Democracy in America fears the tyranny of the majority, James Bruce’s American Commonwealth  decries the fatalism many face in the fear of majority pressures, and Elizabeth Noelle-Neumann’s The Spiral of Silence describes the power of public opinion to silence and persecute. John Stuart Mill’s On Liberty captures it well when declaring that individuals ought to be free from the opinions of others and that there are limits on what society can compel people to do.
The point here is that there are limits to what political majorities can or should be allowed to do to others.  You can believe what you want but you cannot use the force of law to enact your prejudices into law.  We have a right to be bigots, we just do not have a right to enforce and impose the bigotry upon others, regardless of the reasons or motives.  This is especially the case in using religion as a shield, sword, or excuse to discriminate.
Long ago Bob Dylan wrote a song called “With God on our Side.”  He recounted how too often  religion was used as a justification for all types of evils.  He made a good point. Among the numerous problems in the current debates over gay marriage and rights, or abortion, or even birth control under the Affordable Care Act, is how religion is used to mask or further political ends.  It is first over how some individuals first think that there religious views are correct and how they have a right to impose them on others who disagree.  It is essentially saying that my views should be counted twice–they dictate how I live and with that, how you should live.  It is preempting some who disagree from being able to make their own choices.  “Freedom for me but not for thee” seems to be the stance.
This legislating of morality also seems to accept the legitimacy of imposing my religious views on others, even upon those who do not accept my faith.  I thought we had moved beyond the Middle Ages and the Spanish Inquisition.  Such a position also seems to believe that they have found the truth, the orthodoxy, and not are free to dissent or disagree.  The last I knew no one had a monopoly on the truth.
Accepting that people have a right to their own opinion does not mean they have a right for  your to accept it.  You can believe what you want–ethically and religiously–so long as it does not impact others in a discriminatory way.  That is the limit of your rights.
How does all this connect to Indiana?  Individuals are entitled to think what they want religious–they can be as bigoted as they want and not like gays and lesbians.  However they have no right to let that bigotry become a discriminatory law or policy.  Whether sincerely held or not, no one except for a racist perhaps accepts the idea that there should be a religious exemption to the 1964 Civil Rights Act when it comes to racial discrimination.  Imagine George Wallace claiming a First Amendment Free Exercise of Religion argument to fight integration and voting rights.  There is no difference between that and what Mike Pence of Indiana just signed into law.  While we may need to tolerate the intolerant when it comes to their private views–because the First Amendment protects that–there is no need to be tolerate or endorse those who wish to impose their views on others.

Saturday, March 21, 2015

The Geography of Twin Cities Race

An earlier version of this essay appeared in the March 18, 2015 edition of Politics in Minnesota.

Why are the Twin Cities so segregated?  This is the perplexing question and title of report recently issued  by Myron Orfield and the Institute of Metropolitan Opportunity at the University of Minnesota.  Why perplexing?  It is because he juxtaposes how the “Minneapolis-Saint Paul metropolitan area is known for its progressive politics and forward-thinking approach to regional planning” with the reality of the educational and residential segregation that exists.  Yet his perplexity should not be a surprise since so many of the conclusions he reached were those similarly found a generation ago, and of which could easily be confirmed by almost any person of color in the Twin Cities, if not Minnesota.
First let it be said the Orfield’s report is outstanding.  It documents a Twin Cities metropolitan region that is racially segregated.  This residential segregation is the product of a coalition of interest groups resisting Met Council plans and legislative mandates, if not also court orders, to disburse low income housing across the Twin Cities.  Instead, low income housing continues to be concentrated in select neighborhoods in Minneapolis and St Paul, along with select inner ring suburbs.  Additionally, educational reforms such as charter schools and choice which are supported by those who have vested interests in these ideas, have reinforced and enhanced the housing segregation.  Together, there is a housing-education interest group complex enabling the status quo, hostile to integration, pursuing policies that are producing residential-education segregation and the outcome disparities among students.
Orfield writes a report full of surprise about this, yet should he have been?  Back in 1996-97 the Institute on Race and Poverty, the predecessor to the Institute of Metropolitan Opportunity before its name was changed, was headed by john powell.  I worked there and was the principal writer and  project coordinator for a wonderful team that issued a report “Examining the Relationship Between Housing, Education, and Persistent Segregation.”  We found that the Twin Cities was among the  ten most segregated metropolitan regions in the country.  It was a region  where race and income were stratified by geography.  By that, we had already charted through the 1980s and 1990s that there was a heavy concentration of poor and racial minorities in selected urban and first ring suburbs.  We also found that the causes of this segregation were many, including exclusionary zoning, persistent private housing discrimination in terms of racial steering, residential  mortgage lending, and rental markets.  Our research on the Twin Cities paralleled that by national scholars who looked at other regions of the country.  In effect, the Twin Cities was not exceptional from trends found elsewhere across the country.
We additionally found that federal housing policy, school policies, siting of low income units, the way school district lines were drawn, political fragmentation, and frankly personal preferences–whites not wanting to live near people of color–drove the segregation. Yes government policy contributed to the discrimination, but there were powerful private preferences and market forces that also drove the segregation. For example, we found in a survey that we commissioned  that half of Whites described their ideal neighborhood as mostly White, whereas twenty percent of African-Americans preferred a neighborhood nearly or mostly non-White.  Questions about current neighborhood composition and current and ideal school patterns yielded similar answers demonstrating distinct preferences for Whites and African-Americans.  In short, Whites did not want to live or go to school with Non-Whites whereas African-Americans preferred more integrated options.
The causes of residential and school segregation were a consequence of both clear  governmental policies and choices, but also a product of individual and market preferences.  But where our study went further than the Orfield report was in at least four  ways.  First, we were willing to say something he was not–Twin Cities metropolitan segregation was a product a racism, individual, institutional, and societal.  Beneath the veneer of the ostensible progressivism of the area there was a clear racist animus.  Ask many people of color in the area and they will tell you that Minnesota Nice masks Minnesota racism.  Second, our study more so than Orfield’s looked at how segregation is a product of the intersection of race and class.  Third, our unit of analysis was the census track and not the metropolitan unit, giving us a better neighborhood by neighborhood study than the Orfield study.  Finally, our report offered several recommendations in terms of changes in state law and other policies to address the segregation.  Unfortunately, these recommendations were largely ignored.
Race and class worked together then and still do now to broker the segregation in Minnesota.  We noted how back in the early 90s Minnesota and Oregon had the highest percentage of their African-American populations attending predominantly minority schools.  We looked at rents that priced all poor people out of most suburbs and neighborhoods, with the special impact it had on people of color.  We documented the concentration of poverty, the disappearance of mixed income neighborhoods, and a series of failed public policies that did nothing to address discrimination.  We also pointed to then how the evidence showed that charter schools and vouchers did little to address school achievement and desegregate.  We found everything that Orfield discusses in his report, yet we did it a generation before he did.  We noted back then that the research was already clear in that  school vouchers, choice mechanisms, and perhaps even magnet schools were failing and would fail to address school performance or desegregate.  Yet as Orfield alludes to, powerful interest groups and political and perhaps academic careers and reputations are at stake in supporting these failed policies.
The power of the Orfield study is in linking the policies to interest group politics and in telling a story that brings our report up to the present.  It is a study that further confirms that little has been done to address what we called the “persistent segregation” in the Twin Cities in the nearly twenty years since the Institute on Race and Poverty issued its report.  One can only hope twenty hence another report will have documented a change in policy to reflect the increased racial diversity that the metropolitan region is experiencing.  Maybe it will also be a study that reports that the failed  housing and educational policies that we have thus far adopted since the 1990s were abandoned.

Friday, March 20, 2015

Mall of America v Black Lives Matter: The Difference Between Civil Rights and Free Speech Laws

The Mall of America (MOA) is private property.  So are the other shopping malls in Minnesota.  One may not agree with that legal fact but that is the law in this state.  This means that owners of shopping malls have a right to deny the public access to their property for the purposes of exercising free speech rights but that does not mean they can deny them access on the basis of race.  This distinction seems to be lost in the dispute regarding the trespass prosecution in the “Black Lives Matter” case.  A basic understanding of federal and state constitutional and civil rights law clarifies this issue.
There is no debate that subject to some time, place, and matter restrictions, the public enjoys broad First Amendment expressive rights on public property.  In the proverbial town square the public has a right to criticize the government or make any other political statements it wishes.  The Fourteenth Amendment’s Equal Protection clause guarantees that this right cannot be denied on account of race.
But shopping malls are not town squares.  In Lloyd Corp. v. Tanner, 407 U.S. 551 (1972), the US Supreme Court ruled that there is no First Amendment right to distribute handbills or express political messages in shopping malls.  Malls are private property and the owners may exclude or prevent the public from distributing or expressing their political views their.  However in  Pruneyard Shopping Center v. Robins 447 U.S.  74 (1980) the Supreme Court also recognized that while there is no federal First Amendment right of the public to use malls for political purposes, state constitutions may afford such a right.  That is the case in California.  In New Jersey its Supreme Court in New Jersey Coalition Against War in the Middle East v. J.M.B Realty Corporation, 138 N.J. 326 (1994) ruled that shopping malls had become the “functional equivalent of downtown business districts” and therefore  owners could not interfere with reasonable expression of free speech rights as protected by the state constitution.
The Minnesota Supreme Court did not follow New Jersey when it ruled in State v. Wicklund 589 N.W.2d 793 (1999) that the state constitution did not guarantee the free speech rights of the public at MOA.  It rejected claims that extensive government involvement in the planning and financing  of the MOA made it a public entity and it turned back arguments that the mere holding open of private property to the public for any purpose make it public property.  The Court also rejected the functional equivalent argument of the New Jersey Supreme Court.  The Court may have gotten it wrong then and perhaps conditions in the last 16 years have undermined the validity of that precedent making a new challenge ripe.  But as of last year, Wicklund is still the law.  No one, regardless of race, has free speech rights at MOA.
But just because MOA can limit the public from exercising its free speech rights, it may not exclude individuals on account of race and gender.  The 1964 Civil Rights Act is clear on this matter.  MOA is a public accommodation under federal law and case such as Heart of Atlanta Hotel v. United States, 379 U.S. 241 (1964) are clear that businesses and establishments may not discriminate on account of race.  In Roberts v United States Jaycees, 468 U.S. 609 (1984) the U.S. Supreme Court ruled that even under Minnesota’s anti-discrimination law, many clubs and associations would be barred from banning individuals based on gender and race.  Federal and State law is clear–if the MOA were to decide to ban individuals from their premises based on race they would be acting illegally.
There is thus a difference between federal and state anti-discrimination and free speech law.  This is important because it does not appear that MOA barred Black Lives Matter from protesting because of their race.  If they did then shame on MOA and they ought to be sued for civil rights violations.  Instead, they barred the group because current law did not give Black Lives Matter a right to free speech at MOA.  When the group demonstrated there against the wishes of MOA that was trespass under current law.  Whether they should be prosecuted is a different matter.
But what is critical to understand is the purpose of the Black Lives Matter protest at MOA.  Were they protesting against MOA racist policies, against a State Supreme Court ruling liming free speech rights at the mall, or against Ferguson and racism in general?  Again, Federal and State law make it illegal for MOA to discriminate on account of race.  If that is the allegation, then the protest  of MOA’s policies is powerful and ranks along side of Rosa Parks sitting at the front the bus and therefore Black Lives Matters was within its rights to do.  But if the protest were to challenge current state law about the status of the MOA as a private entity that can restrict free speech rights (such as to protest Ferguson), then this is not an issue really about race but about expressive freedom.  This  is an entirely different issue that really is not about race and unfortunately current law does not support Black Lives Matter.
The Black Lives Matter protest at MOA entwines and confuses issues of race and speech.  Whether we like it or not the law treats civil rights and expressive freedom differently.  Understanding how the law differentiates between the two, along with clarifying the motives and goals of both MOA and Black Lives Matters, is critical to understanding the difficult questions in this case.

Saturday, March 14, 2015

Rebating the Nonexistent Minnesota Surplus: Dumb, Dumber, and Brilliant Politics

So Keith Downey and the Republican Party of Minnesota are running ads saying they want to give back all of the $1.9 billion state surplus to Minnesotans.  Quiz time.
    This idea is:
    a)    Something they actually believe.
    b)    A way to make Kurt Daubt and the House Caucus ideas seem reasonable.
    c)    A smart political move.
    d)    A fiscally dumb idea.
    e)    All of the above.

    The  answer is (e), all of the above.  Why is that the correct answer?  Examining the politics of the budget surplus and how the DFL are just about ready to get out-maneuvered politically by the Republicans on it tells one a lot about state politics and the fortunes of the two parties.
    Let us begin first my declaring that rebating the surplus is actually something that Downey and most Republicans actually believe.  Rebating the surplus is really a continuation of  the party mantra for the last 35 years which has stressed tax cuts as a Republican solution for almost every problem confronted.  Economy in a funk, cut taxes.  Economy doing well, cut taxes.  Need better roads and bridges?  Cut taxes.  Expensive housing?  Cut taxes.  It is a one size fits all answer but it has been a successful one for the GOP fortunes.  Their base loves the idea of tax cuts and many actually do believe that it is the best way to help the economy.  When GOP Keith Downey was a legislator he never met a tax cut he did not like, and no surprise that he along with many other Republican legislators believe that the best thing for the state of Minnesota is simply to rebate all of the money back.
    Yet even if it is an idea that Downey does not actually believe, it is a terrific way to make Speaker Kurt Daubt and the Republican House caucus proposals look good.  Their ideas various call for cutting taxes, spending more on education, and also using the money to repair roads, bridges, and highways.  These are all great ideas that appeal both to their base who want tax cuts, but also to rural constituents who feel that too much spending is going to Twin Cities mass transportation.  Spending on education is a good priority that appeals to swing voters, and it is also a way to help undermine  some of the equalization formulae that try to rectify imbalances in tax bases across Minnesota school districts.  The problem with their proposal of course is that $1.9 will not go very far toward paying for many of these projects.  Additionally, so far the House has not been clear in that the big winners of  their proposals, especially the tax cuts, will not be working or middle class Minnesotans. 
    But nonetheless, the call for rebating all of the surplus is politically brilliant.  The public hears surplus and thinks the government has too much of my money, I should get some back.  The  idea of rebates sounds terrific–mailing checks to voters or giving them rebates at a time when Minnesotans are doing their taxes.  It was a tactic used once by Governor Ventura and the legislature back in 1999-2000 and it was popular.  Everyone loves Santa Claus; everyone loves people who give us gifts.
    Tax cuts have been a staple message of Republicans for decades and there is no reason to think why it should not continue to be a successful message into the future.  It is a great wedge issue against Democrats.  How can they oppose giving the people their money back?  If the DFL does not support it they are just the tax and spend liberals we know they are.  They are the party of big government and extravagant state office buildings, refusing to help working Minnesotans out by sending them a few hundred dollars back.
    But rebating is simply dumb on so many grounds.  One again needs to point out that of the $1.9 billion the first billion does not exist.    If all of the current programs funded by the state are continued at their same spending level into the next biennium it will cost the state another $1 billion to fund them because of inflation.  In order to reap this first billion as a surplus one needs to cut one billion in spending first.  Second, the surplus is only a surplus because of the tax increases. Cut the taxes and the surplus disappears.  There is no structural surplus.  Third, the other $900 million is hardly a surplus either.  With Dayton having proposed a $40 billion biennium, that $900 M is barely 2%.  If we think of the total real obligations that the State has for the next two years which includes both what Minnesota pays for along with the federal government, real spending obligations increase by tens of billions of more dollars.  That $900 M is nothing.  Assume any serous federal budget cuts or another shutdown and the state is still on the hook and it has no money as a cushion.  Or assume that there are other natural disasters that  occurs and a special appropriation is needed.  Or simply assume a slowdown in the economy or even that the surplus forecast is off just a percent or so.  Suddenly that $900 million is gone.
    The margins for error are great here.  Giving away this remaining $900 million is bad accounting.  Generally accepted accounting practices declare that organizations should have contingency funds or accounts set aside.  It should be a certain percentage of a budget.  The exact size of the contingency depends on risk, but a 5% contingency of an entire budget is not out of line.  Thus, smart budgeting suggests that saving this remaining $900 million would be good accounting.
    On top of which, the last time the state gave away it surplus was back when Ventura was governor.  The state of Minnesota went from an approximately $4.5 billion surplus in 1999 to a multi-billion dollar deficit in 2002.  To this day Minnesota has yet to recover from the stupidly of this move along with the changes in budgetary law that have continued to create the fiscal problems  that face the state.
    Thus, the correct answer is all of the above. Those of you who gave this as an answer can go to the head of the class.

Sunday, March 8, 2015

Counseling Justice: What Advice Could an Attorney have given to Martin Luther King, Jr. at the Edmund Pettus Bridge?

What should a lawyer have advised Martin Luther King, Jr. 50 years ago as he contemplated crossing the Edmund Pettus Bridge?  Posing this question as we witness the anniversary of this act of defiance and in the shadow of Ferguson, Missouri raise compelling questions not only about civil disobedience in America, but only about the connection between law and ethics and the role that attorneys have in advising their clients and in participating in the promotion of social justice.  I confess at the start I do not have all the answers, but the issues here are vexing.
    The connection between law and ethics and civil disobedience has deep roots.  There is Antigone’s burying of her brothers in defiance of the orders of Creon the King.  Socrates challenged Athenian democracy when it ordered him to stop philosophizing.  Jesus and early Christians confronted the Romans as they practiced their faith. St Augustine once proclaimed: “Lex iniusta non est lex”–an unjust law is no law at all.  Natural law believers contend that human law must be based on some natural laws or rules of justice, and thinkers ranging from St Thomas, Thomas Becket, to Lon Fuller have argued that there is an inner morality to the law.  At times human civil law is simply unjust, raising a compelling case for civil disobedience.
    American history is replete with cases of civil disobedience.  Colonists dumping tea into Boston Harbor was as much a political statement about independence as it was a protest against a tax they did not like.  Henry David Thoreau refused to pay his taxes, opting for jail as a protest against slavery and the fugitive slave laws.  And civil rights protestors and those opposed to the Vietnam War too defied laws they deemed unjust. 
    As philosophers John Rawls and Robert Dworkin  argued, the core of civil disobedience is disobeying those laws which you feel are unjust–not simply any law to make your point.  It made sense for Rosa Parks to refuse to sit at the back of the bus in that she was directly challenging the law that discriminated against her.  The Greensboro Four in 1960 sitting at a Woolworth’s lunch counter and demanding service as a protest against segregation laws also defied the law they wished to challenge.  Even King’s march across Edmund Pettus bridge was a legitimate challenge to segregation laws as its defiance was integrally connected to the racial discrimination they were challenging in 1965.  In all these cases breaking the law was meant to protest that law while at the same time highlighting a bigger cause. 
    The purpose of civil disobedience is to bring attention to the  injustice of the law with the goal being to bring about reform.  Because that is the goal, some contend civil disobedience should not be prosecuted.  Whether that is the case can be debated.  Will the civil disobedience be successful and is the cause is just are only a couple of issues to ask.  Will breaking the law send a sufficient message to the majority to change the laws, or will the civil disobedience lose part of its potency by knowledge that one is not risking prosecution, are tactical and political questions that do not lend themselves to simple answers.
    But what if King had come to an attorney in 1965 and asked whether he should break that law.  What should an attorney have done or said?  The contemporary ethical rules for lawyers known as the Rules of Professional Conduct were not in effect then, but assume they were, what do they permit?  The preamble admonishes attorneys to be zealous advocates for their clients while also recognizing that they have “a special responsibility for the quality of justice.”  One hopes that in advising a client one also promotes justice.  Moreover, Rules 1.16 and 3.3, as well as 1.6 collectively  and individually prohibit an attorney from assisting or advising a client to break the law.  Generally a lawyer’s first obligation is to counsel a client to conform to the law–to obey.  But lawyers may advise clients that a law may be unconstitutional but nonetheless also inform the client about the risks of challenging the law.  Similarly, a lawyer may advise a client contemplating civil disobedience about the consequences of disobeying the law and still represent the client afterwards.  Given this, there would have been no problem for an attorney advising King on his options, including what might happen if he crossed the bridge.
    But there are two additional issues here.  Should an attorney have told King to defy the law and march, and what about if the attorney marched with him?  These are tough matters of conscience and ethics.  On the one hand if the attorney thinks the segregation laws (or in this case an injunction) is unjust, should the lawyer counsel breaking the law?  One answer is that if the attorney truly believes the laws are simply unjust (but not illegal) it would be unethical from a lawyer’s ethics point of view to advise breaking the law.  More importantly, an attorney taking this position may not be acting as a zealous advocate for the client.  Such attorneys may be zealously advocating for a cause or they may be pressing their moral views upon a client, but they are not zealous advocates for their  clients.  But even if the moral views of the client and the attorney align, it may be the case that the attorney is no longer able to act primarily with the best interests of the client in mind–there may be a conflict of interest.  In the end, it is not about the attorney’s conscience when advising a client.  If an attorney believes that the law is unethical and wishes to civilly disobey, he or she may do so and cross the bridge, but  at that point one probably should no longer be advising King as an attorney.  The attorney is now a participant in the disobedience, not advising in the matter.  It may be difficult to cross the bridge and advise King at the same time.
    Conversely, is it ethical to advise clients to obey unjust laws?  Would it be wrong to advise disobeying laws connected with supporting an unjust society?  Should an attorney have advised Thoreau to pay his taxes?  For John Brown to raid Harper’s Ferry? Or today, would it be appropriate for an attorney to tell  protestors to block clinics because abortion is wrong?  Is it okay to advise illegal protests against Ferguson and racial discrimination in America?  No one says that lawyers should be indifferent justice; they should do their best to promote it.   But these issues raise a difficult problem of reconciling ethical rules that attorneys are supposed to follow with obedience to the law and ultimately the principles of a just society.  I am not sure what I would have done as  an attorney advising King in 1965.  I hope I would have gotten it right but it is not clear exactly what getting it right actually means.

Saturday, February 28, 2015

The Politics of the Minnesota Budget Surplus (Or why it is bad news for Minnesota)

Perhaps the worst thing that could have happened to Governor Dayton’s political agenda was for the
    The first point to consider is that there is not really a $1.9 billion dollar surplus.  It is much lower than that.  The last fiscal forecast from November 2014 which projected about a billion dollar surplus did not exist.  It did not because factoring current spending obligation in, inflation largely erased it.  By that, assuming a normal rate of inflation the $1 billion surplus would have been eaten up by current spending commitments. In their more candidate moments, both DFLers such as Ron Latz and Republican Kurt Daudt admitted that, but nonetheless everyone at the Capitol chose to ignore this.    The only way there is a surplus of $1 billion for the coming biennium is if there is agreement to cut $1 billion from the current spending.
    Let’s then cut $1 billion from the current $1.9 billion projection and we are left with $900 million.  This is sort of a surplus.  Why sort of?  Look at the fiscal forecast.  The surplus is largely a product of forces beyond Minnesota’s control.  A growing US economy, decreasing fuel prices, and a rising dollar.  These are macro and unexpected structural forces that can rapidly change.  Fuel prices rapidly went down and they could rapidly accelerate again, triggering economic events that affect the fourth reason for the revised budget forecast, higher individual income and sales taxes.  Minnesota’s economy is doing better, perhaps for some reasons attributed to state economic policy, including increasing income taxes on the wealthy a couple of years ago, but also for reasons having nothing to do with state policy.
    The remaining $900 million is a surplus so long as current economic conditions continue and so long as current tax rates do not change.  If one cuts taxes then this will pressure the surplus projection downward, and if the economy does not continue to grow along the way projected then too it will go down. Moreover, while the fiscal forecast projections into the biennium beyond the next one too offer a structural surplus, it too is based on assumptions about taxes and economic conditions that may or may not continue.
    But the fiscal forecast also misses something important–depreciation on state assets and deferred maintenance.  What is not calculated here are deterioration of state assets such as roads, bridges, water and sewer systems, and parks.  They all need maintenance.  Lost of value to them due to wear, tear, and deterioration have not been considered.  Yes they should be considered part of a capital budget and not an operating budget, but the state operating budget does not do a good job of factoring in necessary or delayed maintenance.  Factor them in and there is really no surplus.
    In many ways, Dayton is correct.  We still need a long term solution to generate the revenues to repair state infrastructure.  Proposals to use the state’s short term $1.9 surplus are both inadequate and short term.  That amount of money just does not cut it to address the current infrastructure needs of the state, let alone also allow for tax cuts, more K-12 spending, and all the other ideas on the wish list by many.
    So here is where the bad news for Dayton kicks in. He wants a structural solution to infrastructure along with other new commitments on spending.  All are worthy.  Yet news of a surplus has all but ended any hope of tax increases and a structural solution.  At least this is what Speaker Daudt has said.  It was already near impossible for the governor and the DFL to get tax increase before, now it will be impossible.  At the same time there will be pressures to cut taxes, which now doubt there will be  bi-partisan support for.  What we have here is a recipe for budget foolery and gimmickry that reminds me of the last time we had a huge surplus–1999.  Back then Ventura was governor, the DFL controlled the Senate and the GOP the House.  The economy was humming along and the surplus was near $5 billion.  Taxes were massively cut and money given back to all.  Then the economy tanked and it has taken until now–16 years–to recover.
    Now is not the time to talk of permanent tax cuts or rebates.  Nor is it the time to think of a  brief budget surplus as a long term solution to delayed maintenance and infrastructure costs.    Nor are one time cash infusions going to change state graduation rates or educational disparities or the rising costs of higher education.  Yet this “short-term-less-than-meets-the-eye” surplus will obscure  all of this, thereby making it more difficult for Dayton to achieve either his short or long term objectives.
recent fiscal forecast to now project a nearly $1.9 billion surplus for the coming biennium.  While money in the bank is not normally thought of as bad news, in this case it is, and it portends a possibility that his political agenda and timely agreement on a state budget could be derailed.