Mid-Week Capitol Update for April 9, 2008

Special mid-week Capitol Update from lobbyist John Tuma:

“We live in a political world.
Where wisdom is thrown into jail.”
Bob Dylan (aka Robert Zimmerman from Hibbing, MN)
Oh Mercy, 2003

The governor’s veto of the capital investments bill caught most of the Capitol watchers by surprise.  Not so much that he vetoed the bill but the manner in which he did it.  Given the fact that we are living in a “political world” up at the Capitol, it is just another twist in the ever-changing march to the end of session.  Nonetheless, it created an interesting change in the drama, which is something the governor has learned to do so well over the years.

Most Capitol watchers were identifying only three options the governor had with the capital investments bill.  The first was to veto the whole bill (I was in that camp) to make the Legislature go back to work on it with some suggestions.  The second was to line item veto the bill down to around $825 million, which would put it within the long-standing three percent of the general fund cap.  The third option was to let the bill become law without his signature.

The last option was most unlikely because it signaled surrender on his part.  I personally did not take the “line item veto of the bill to $825 million” option seriously because it did not give him a good negotiating position for the supplemental budget bill.

I have to give one to the governor for finding a fourth option no one really thought about.  He probably would have been given a line in old Bobby Dylan’s song back in 2003 had he done it earlier.  The governor chose to line item veto projects down to $717 million, which is some $108 million less than that required by the three percent cap.  You could actually hear the political sting through the Capitol, particularly from those legislators who reside in St. Paul and took the greatest brunt of the extra cuts.

A big chunk of this veto was $70 million for the Central Corridor Light Rail Line.  No matter how anyone spins that line item veto, it certainly smacks of political positioning.  But remember we do live in a political world at the Capitol.

The governor never specifically stated in any of his press releases or his speech that this was related to payback for the transportation override, but it was not lost on most metro legislators.   He called the Central Corridor a “local project.”  This was odd given his support for the project in his original proposal to the Legislature a couple of months ago.  My understanding is that negotiations were moving along with a vision to completion of this project that will bring in over $400 million in federal funding.  Don’t let facts get in the way of a good political play.

Therefore, the fourth choice the governor has invented is one that narrows the set of issues to be negotiated in a final global compromise over the supplemental bill and the remaining bonding projects.  The Legislature certainly has the authority to put together a supplemental package that will make up the $108 million of bonding.   If the $70 million for Central Corridor is a given, the question is to what will Legislature have to agree.  Will there be adjustments and other projects, and how will they spend the additional $38 million in available bonding?

Another question is how, if at all, to fund the Vermilion State Park.  Remember the State does not have to include funding for the state park until after the purchase agreement is signed.  The governor has indicated he would be satisfied with some authority to use LCCMR growth to fund “user fee bonds” as opposed to general obligation bonds for the park.

However, the governor definitely deserves praise from the environment community for protecting many of our “Minnesota’s Great Outdoor Traditions” proposals from becoming “line item” casualties.  These projects survived the line item veto pen quite well.  Our bonding cluster definitely felt the governor’s line-item vetoes maintain the integrity of our “Minnesota’s Great Outdoor Traditions” proposal.  MEP did lose a couple of our collaborative agenda park proposals, namely the St. Paul Great River Park and Springbrook Nature Center.  It is possible these could come back in final negotiations, but the vetoes clearly put them at severe risk.

Therefore, the surprise fourth option has definitely narrowed the issues the Legislature must focus on with the governor in the final negotiations.   Certainly the St. Paul legislators are taking it hard, as they should.  They will definitely be a factor as the final deal plays out.  Nonetheless, given the narrowing of the issues there is a possibility the Legislature could complete the session much quicker than they would have if the governor had vetoed the whole bonding bill.  Stay tuned for more details on a busy week in the Friday update.