Replay:MN Governor Candidates Debate At General Mills (CC)

The TwinWest Chamber of Commerce is the organizer of this debate. 350 business leasders have registered, so many that they had to move this debate from the auditorium to the larger General Mills cafeteria.
Candidates include:
Mark Dayton, DFL Party
Tom Horner, Independence Party
Tom Emmer,  Republican Party

Video with captioning added by The UpTake can be found here.

To view our live blog and transcript of this event, please click on the headline or continue reading. To view the live blog in a pop-up window Click Here


Minnesota Gubernatorial Debate, General Mills HQ, Golden Valley, MN 8/26/10

Speakers: Mark Dayton, DFL candidate; Tom Emmer, Republican candidate; Tom Horner, Independence Party candidate; Bruce Nustad, Twin West Chamber of Commerce, Moderator

Bruce Nustad: OK, that gets us right to our debate, and I know today’s debate offers a great opportunity for all of us to hear from the Gubernatorial candidates who are in our vernacular are vying to be Minnesota’s next CEO. At this time I would like to invite the candidates to come to the stage as we prepare for the debate. As an introduction, with so much at stake for the future of Minnesota, the 2010 Governor’s race is extremely important in electing the state’s next chief elected officer. Minnesota faces a projected six billion dollar deficit for 2011 and 2012. The Bruce Nustadbusiness community has a strong vested interest in who will govern Minnesota. And how the next Governor will set forth a pro-business, pro jobs, and economic growth-focused agenda. Now let me formally introduce the candidates. I’d like to start out with the DFL candidate Senator Mark Dayton. Senator Dayton was born and currently resides in Minneapolis, but was raised in Long Lake, Minnesota. Senator Dayton graduated with honors from Yale University, where he played a good Division One hockey. After college Mark taught the ninth grade, general sciences for two years, in New York City public schools. It was there he decided to devote his life to improving social equality and economic opportunity for all Americans. For the most part of 34 years Senator Dayton has been engaged in public service as commissioner of the Minnesota Departments of Economic Development and Energy Economic Development as State Auditor and as United States Senator. Mark has two grown sons. Please welcome this morning Senator Mark Dayton. (applause)

Tom Emmer: To your right next we have the Republican Party candidate Tom Emmer. Representative Emmer was born in South Bend Indiana. He grew up in Edina and went to school at St. Thomas Military Academy. As also a college hockey player, Tom received his B.A. in political science from the University of Alaska/Fairbanks in 1984. He received his Juris Doctor degree from the William Mitchell College of Law in 1988. After practicing law for several years, Representative Emmer founded his own law firm. The next twenty years were spent building his business and serving on the city councils in Independence and Delano. Tom was elected to the Minnesota House of Representatives in 2004 then re-elected in 2006 and 2008. He represents House District 19B in Wright County. Tom is married to Jacquie sitting in the front row here. They have seven children. Please welcome State Representative Tom Emmer. (applause)

And our final candidate today comes from the Independence party. Tom Horner is a native Minnesotan, born and raised in Minneapolis. Tom’s a graduate of the University of St. Thomas. In 1978 Tom joined Dave Durenberger’s staff as press secretary during his U.S. Senate race then served as Chief of Staff to Durenberger until 1985. After returning to Minnesota, Tom and former state legislator John Himle launched the public affairs firm Himle Horner Incorporated in 1989. Tom’s also an adjunct professor at the University of St. Thomas teaching masters courses in corporate communications and public affairs. Tom’s married to Libby Shelton who is here today and they have three grown children. Please welcome Mr. Tom Horner. (applause)

Bruce Nustad: Now onto our debate questions. A little format today. The candidates will have two minutes to answer each question so you will have a fairly fast moving debate this morning. If necessary a candidate may actually ask me for a one-minute followup rebuttal to clarify any misstatements they think made by another candidate about about their positions or the position they have on an issue. I’ll ask for responses in quick rotating order, and today we will start with Tom Emmer followed by Tom Horner then Mark Dayton for opening statements.

Representative Emmer we’ll start with your opening statement. 3:58

Tom Emmer: Thank you Bruce. Thank you all for being here. Thank you General Mills and all the wonderful sponsors that have made this possible. It’s amazing. I look around – what do we have Bruce? 300? 500 people out today? 4:11

Bruce Nustad: 500 chairs in the room.

Tom Emmer: 500 chairs. If you didn’t think this was the most important election of our lifetime, it’d be hard, somebody would be hard pressed to ask why wouldn’t it be.
If you’re willing to get up at this hour of the morning, on a workday, I know it’s the start of the State Fair but to come out and listen to three of us talk about what we believe is the vision for the future of this state. I’m honored and privileged to be one of the people running for this office. You’ve heard my name is Tom Emmer, you’ve hopefully met my wife Jacquie and if you haven’t I hope you take the opportunity to. What’ you’re gonna hear today is that we have a different idea for the vision of this state. While one vision is the old one it is about business as usual in this state, which is simply grow government and continue to tax, We have a different idea. We believe it’s time to look at the business of government, redesign that business from the bottom up. So it delivers the services that people expect in an efficient affordable and sustainable matter. Because I guess Jacquie and I believe that it’s important to turn something over to your kids and ours, something more than just our debt. And at the same time we need to address what really does ail Minnesota and frankly the rest of the United States. Our economic problem. It’s time to make Minnesota business friendly again so that we can start to grow jobs in this state. That’s what this next election is about. It’s about growing jobs, creating new opportunities for not only the Minnesotans that are desperately looking for work today but for the generations to come. That’s what this election’s about. That’s what’s at stake. And again, thank you very much for having us here today. And I look forward to a lively discussion. 5:53

Thank you very much Representative Emmer. And now we will go to Tom Horner. 6:00

Tom Horner:Thank you. Well I also want to thank you for coming out this morning. Thanks to General Mills for hosting us, and thanks to Twin West and all of the other sponsors for making this happen and turning out such a wonderful crowd. You know, I come to this race from two perspectives. The first is the perspective of a lifelong Minnesotan. Someone who has had the opportunity to grow up in a wonderful state, to be involved in the community in so many different ways. And to have a business that was successful. And it’s all of those things that make me very concerned about the future of Minnesota. As Bruce said, Libby and I have three children, 26, 24, 21. I want them to have the same kind of opportunities that have been so important to Libby and me and our family. The opportunities to be engaged in the community. Lee talked about the tradition of General Mills and its involvement in the community, and that’s a tradition for all of Minnesota. To be part of our civic life. And that’s not true in every state, and it’s at risk, as our political discourse becomes becoming more and more polarized, we’re losing those people who want to be involved. The people we need to be involved. And we need to re-engage them. And that’s what it means to be somebody who is a centrist. Somebody who can talk to all parties. Somebody who can engage all parties. And that’s really what it is going to take in the next four years. Whichever one of us is elected Governor, we need to get those 60% of Minnesotans who have been forced to the sidelines back engaged. But I also come to this from the perspective of someone who has run a business. I understand what it takes to meet a payroll, to create a job, to provide good benefits for employees in times of crisis, and in good times. I understand how challenging it can be to run a business in tough economic times. And that’s the perspective I bring. That’s where I think I differ. I’m the candidate who has had to sign the front of a paycheck not just the back of a paycheck. Y’know, this really is a choice of three very distinct perspectives. On one hand you have a candidate who says “If we just tax everything and grow the status quo that much larger everything will be fine.” The other candidate says, “Oh no, let’s just take that status quo, we’ll make it a lot smaller and everything will be fine.” I’m the candidate who’s saying for so many Minnesotans, Minnesotans who are playing by the rules, who are doing all the right things, the status quo isn’t working. And it’s not working because we have two political parties in the Legislature who for the last 10 years have presided over an economy that by every important measure has lagged the rest of the country. We need to change that. That starts with this campaign. I thank you for this opportunity. And look forward to the conversation. 9:05

Bruce Nustad: Thank you Mr. Horner. And I should have said, I failed to point out where your wife is in the audience today. 9:09

Tom Horner: I don’t know where Libby ended up? Where’s Libby? 9:12

Bruce Nustad: Looks like midway back– 9:

Tom Horner: Libby way back there! (Applauds) 9:15

Bruce Nustad: Thanks for joining us today, Libby. Senator Dayton, your three-minute opening remark. 9:19

Mark Dayton: Well this is a remarkable turnout. Now I understand why it took longer to get into the parking lot this morning than it will to the State Fair in a couple of hours. Thank you for your interest. Thank General Mills for hosting us all today, one of the really great Minnesota companies, one of those that has been such an outstanding corporate citizen. And I certainly want to pay my respects to George and Sally Pillsbury, Pillsbury now being a part of the General Mills family. Charles Pillsbury their son was my best friend growing up. And now in the interest of full disclosure, they’ve both informed me they’re supporting Mr. Horner for Governor, 9:55

(audience laughs)

Tom Horner: And as I told Mark, when Sally is on your side… 9:59

Mark Dayton: As do, as are some of my cousins, both because they probably disagree with some of my philosophy, and also because they’ve known me longer than anyone else. Their son George was my brother’s good friend growing up and just to show that it runs in the family one day we were serving pancakes for Saturday morning breakfast at our house and young George came into the kitchen and make sure we were using Pillsbury flour before he’d eat any. And fortunately we were. But this election is about the future of Minnesota. We all agree on that. It should be about the future of the state. For ourselves and our children and our grandchildren. And the Minnesota that was described as the Minnesota Miracle a state that was successful for the private sector where we had excellent services in the last 20 years, and I would point out it was not under a DFL Governor during that time has really hit bumps in the road. We still have tremendous people all over this state but they’re not employed. We still have people all over the state that are trying to get into colleges and universities in this state and finding them unaffordable because of high tuitions, among the highest in the country. We have young people growing up here that are consigned now to going to school only four days a week because their school districts can’t afford to provide school five days a week. And overcrowded classrooms. I taught in my first year out of college in a public school in New York City on the lower east side. I always said it’s the toughest job I ever had and I learned one thing very quickly. It takes a lot of skill and dedication to become a good teacher. And secondly I learned you cannot reach individually 32 children in a classroom. So when I go to Rochester Minnesota, a fairly affluent part of our state, and I go to an elementary school there where they speak seventeen different languages and dialects, and they have 36 children in a fifth grade classroom with only one teacher, I know that we’re not making the investments necessary to be successful in the future. When I was Commissioner of Economic Development back under Governor Rudy Perpich, I would ask businesses: in an era of progressive taxes in this state, why are you locating, why are you expanding here in Minnesota? And the answer was always number one: well-educated, hard-working productive citizens. That’s been the key to our success in the past, it’s the key to our success in the future in this global economy. So when we’r e not making those public investments, and we’ll get into later about how we need to improve the quality of education, I hope, but also we also need to fund education in this state, and we’re not, we’re disinvesting in education, as we are in our infrastructure, as we are in the essential services that people depend upon to want to live here, to want to raise their families here, and that’s why yes we do need a new direction but it’s not continuing the practices of the past, it’s a better direction for the future of Minnesota. 12:25

Bruce Nustad: Thank you Senator Dayton. Thank you all for your opening remarks. We have a series of preplanned questions today and we’re going to start out with the heavy question relating to the state budget deficit. Our candidates are actually probably sick of answering this question but it is an extremely important question so we’ll start out with that. I’m sure no matter where your campaign takes you for the next 68 days if you don’t count today Minnesotans are concerned about the projected six billion dollar deficit for the next biennium. Most Minnesotans including business leaders feel the magnitude of the deficit has the strong potential to impact job growth. We know that the bulk of the state budget goes to education, about forty percent, health and human services at about 30%, and local government aid at about 10%. We know in the area of revenue, that about 36% comes from income taxes, 24% from local property taxes, and about 20% from sales taxes. As Governor, which areas would you look to cut spending? And/or increase revenue as you make tough decisions about the state’s budget? And how does government service redesign fit into those plans? For this first question we’ll start out with Senator Dayton. 13:30

Mark Dayton: Two minutes, is that correct? 13:31

Bruce Nustad: Two minutes, correct!

Mark Dayton: Well, I’ve set forth a plan, some may not agree with it, but it’s a straightforward plan. And Mr. Horner to his credit this week did so the same. We have some honest disagreements. I want to raise revenues primarily by making the income tax more progressive, asking the richest Minnesotans to pay their fair share of taxes as they did under Governor Arne Carlson and have not done since. Mr. Horner wants to raise the tax on clothing, and on an unspecified number of services, which I assume would have to include legal services, accounting services, haircuts and the like, I hope he’ll spell that out soon. Representative Emmer, still with 68 days and counting, waiting for your plan, sir. I hope you’ll present it here today. (To audience) You know if you running a business, were hiring one of us to be your CEO, and your business were looking at a projected 16% operating deficit over the next two years, I don’t think you would hire somebody who wouldn’t tell you what his plan was. And I think we’re it’s long past due where we should receive that plan. and its specificity of where those cuts are gonna be made. As you pointed out, 95% of the state budget, 48% actually goes to education, 30% to health and human services, much of which is mandated, most of which is needed by our citizens, much of which goes to senior citizens, 9% to property tax relief and local government aids, 5% to public safety, 3% to debt service. That’s 95% of the state budget. So anyone who pretends that they’re gonna be able to eliminate 3 or 4 or 6 billion dollars without having significant negative effects on the people of Minnesota I think frankly is just not being forthcoming. Do we need to redesign government? Absolutely. And I hope we’ll get into some of the redesign in terms of reducing the amount of duplicative and triplicative reporting requirements, the paperwork, the overlapping jurisdictions of government. I intend to dig in from day one. And streamline government, make it more responsive, make it more effective, make it more responsible to the citizens of this state. But still that leaves six billion dollars to be cut out of the budget or raised in revenues. And we need to be honest with you, should be, about where that’s gonna occur. You can check my Web site, www.markdayton.org, for the details of my proposal. 15:41

Bruce Nustad: Thank you Senator Dayton. The question to you now Representative Emmer. How do you look at the tough decisions and how does redesign fit into your plan? 15:49

Tom Emmer: Well first when we talk about a plan there’s only one plan that’s been offered. It’s just a different sources of revenue that my colleagues want to point to. It’s the same plan that’s been offered in this state for decades. When the state of Minnesota runs out of money the politicians look to the hard-working men and women in this state to the businesses of this state and say “You’ve gotta pony up some more money.” That’s exactly what the plan is. In the case of Senator Dayton his plan is to tax the middle class. In the case of my colleague Mr. Horner, his is to spread it out across everybody. Now let’s talk about redesigning government before we just simply practice the same old worn out time old plan of tax and spend government in Minnesota. The Minnesota Miracle if you will of the 1970s was a tax and spend model. People need to understand in this state that guess what? Government right now out of our general fund is spending roughly 30 billion dollars. We will have almost 3 billion more in revenue next biennium. The next Governor and the next Legislature in this state will have more money next biennium than they do this biennium. In other words if we kept everything the same which I am not suggesting at all and we chose not to spend another nickel after the next biennium the state of Minnesota would have a surplus based on projected revenues. The $6 billion deficit comes from the fact that government’s not satisfied with a 7% raise. Government prefers a 17% raise. It’s time that we start a new program in the state of Minnesota. It’s time that we start a new program in the state of Minnesota. It’s time that we start to look at what government has, let’s figure out what our priorities are, let’s fund our priorities, and purchase those priorities with the funds that government has. It’s about me being more efficient, it’s about using the taxpayers’ money for the priorities they expect, and then let’s get the economy growing. Let’s bring jobs back to this state by giving Minnesota the opportunity to compete not only in the region but internationally. 17:51

Bruce Nustad: Thank you Representative Emmer. Mr. Horner. 17:53

Tom Horner: Well,

Bruce Nustad: How will you look at the tough decisions, how does government redesign fit into your plans. 17:58

Tom Horner: Absolutely. First of all just let me respond to a couple of comments. I always find it interesting when Senator Dayton goes after the proposal to reform the sales tax. The last time you ran for Governor, Senator, you proposed an expansion of the sales tax. And in fact, ironically, one of the areas you proposed to put a sales tax on was legal services. Last time you ran for Governor. I’m not proposing that. I don’t think we ought to tax business to business services. I do think we need tax reform. And that’s my proposal. How do you change a tax system that was created in the 1960s and 70s that isn’t working very well today? We need tax reform. We need reform that is going to incent investments in new businesses in research and development, in job creation. All of you out there who are in business understand that we can’t just abide by the status quo. That the last 10 years, the last 6 years when Representative Emmer has been in the Legislature, have not been good for business. We haven’t grown the economy because we don’t have the resources for investment. We’re not willing to make the tough decisions. I am. I’ve laid out a very specific plan. And it does call for tax reform. It calls for lowering the rate of the sales tax, broadening the base, we are going to expand it to more things, but I also put in there protections for low income to address the regressivity, something Senator I didn’t see in your plan when you ran for Governor 12 years ago. Just an expansion on your side. But we also do need to deal with the spending side. But we also do need to deal with the spending side. We need to make reductions. We need to move away from subsidies that aren’t producing value. JOBZ. Ethanol. And unlike my colleague to the right here, when we were in Farmfest, I told those farmers we were going to have to move away from ethanol subsidies. I didn’t hear that from Representative Emmer. But we also need to make investments. In early learning, in older adult services, in innovation. We need to move to a budget that starts with the question of “What for” not “How much” What are the outcomes we want to achieve. And I have a very specific plan with funding for all of these things laid out in detail. 20:05

Bruce Nustad: Thank you Mr. Horner. Senator Dayton has asked for his one-minute rebuttal. 20:09

Mark Dayton: Well I am older and I’m wiser than I was 12 years ago. (audience laughs) And Mr. Horner you talk about raising taxes on the middle class. The consumer purchases of legal services and accounting services, and again you use more things, so I guess until you specify. But your proposal requires you, your own figures, raise 2.8 billion dollars by expanding the sales tax to these unspecified services. And I think you should tell people where they’re going to be paying more, and that is a tax on middle class people. That’s a tax even with a lower income protection. On working people, on upper income people as well. I do want to just respond to the accusation I’m going to raise taxes on the so-called middle class. My tax proposal would increase income taxes on individuals earning actual income of $152,000, after deductions real taxable income of $130,000, $173,000 of actual income for households. Most Minnesotans do not consider that to be middle class. 21:11

Bruce Nustad: Mr. Horner has requested his one-minute rebuttal. Go ahead. 21:14

Tom Horner: Well thank you very much. And I’m glad to see that Senator Dayton has gotten a LOT wiser. Because he also has changed from his previous Gubernatorial contest when he supported employer mandates for health insurance. To force small businesses to purchase instead of true reform. He also now says that he’s for a stadium. The last time he ran for Governor he wasn’t for a stadium. So I’m glad to see Senator you’ve gotten a lot wiser in your intervening 12 years. But let me also just point out the distinction. Senator Dayton says that he’s going to tax wealth. No he’s not, he’s taxing income. And there’s a very big difference. We took a look at what does it cost, what does it take for somebody to have a taxable income of about $150,000. That couple is paying $50,000 in taxes already. When you take away the mortgage, investments and insurance, in IRAs, in college education, costs frankly Senator that you don’t have to worry about. That family doesn’t have wealth. That family has about $20- $25,000 left over in discretionary income. That is the middle class Senator. That is the family we should be supporting and embracing. 22:25

Bruce Nustad: Thank you Mr. Horner. We will move on to our second question, it’s a bit of a technical question. But it reinforces the fact that the business community believes the state needs to make strong investments in our infrastructure for us to be strong. It’s a question relating to the state bonding bill. Well, traditionally the Legislature would not take up a bonding bill in this next legislative session, but there seems to be an appetite in the House and the Senate to do so. What is your position on the size and the scope of future bonding bills for the state? Including important projects such as the Twin West-supported Southwest Light Rail Line And other capital improvement projects that support strong communities and vital commerce. For this question we’ll start out with Mr. Horner. 23:03

Tom Horner: Well. Thank you. I mean I think our investment in the infrastructure is one of the most important things we need to do in Minnesota. And that has been abandoned in the six years that Representative Emmer has been in the Legislature. Representative Emmer has voted against every single bonding bill that has come before the Legislature. That’s a travesty. We do need to make investments. I’ve proposed that in 2011 in the context of a responsible budget, again, all of it detailed where the investments are coming, where the cuts are coming, that we ought to have a bonding bill in the neighborhood of about $400 million dollars. Money that we can invest in road improvement, money that we can invest in bridges, money that we can invest in economic assets that are going to grow our future. And we do need to look at transit options. We do need to make sure that we are a state that offers a variety of ways in which people can move to jobs, in which we can get folks not just in the metropolitan area moving more efficiently and with less congestion but also around the state. We need to think of transit as a statewide challenge. How do you move people in smaller communities from community to community to get to the jobs. To where the job centers are. Those are the investments that we need to make. And all of it’s going to take money. And all of it is going to have to come from – from you folks. And so we need to be smart about how are we using your money wisely to make investments for the future. That’s the proposal that I’ve put on the table. 24:37

B; Thank you Mr. Horner. Same question to you Mark Dayton. 24:42

Mark Dayton: Well I would propose that we have a bonding bill next year rather than wait until the traditional even numbered years of the legislative session. I propose a bonding bill in the neighborhood of a billion dollars. We rank 34th among the states now in our debt services, about 3% of our state budget. That’s prudent. But we also need to put people to work in this state. And we have projects that are needed in terms of public infrastructure all over this state. In fact the real pent-up need that we need to address. I would focus on so-called shovel ready projects. Governor Pawlenty vetoed about three hundred million dollars worth of those projects, including 19 early childhood learning centers, improvements there, major projects for the downtowns of St. Cloud, Mankato and other areas. And those projects would have first priority. A billion dollars of public investment and public infrastructure is estimated to create about 28,500 jobs. Those are people in the building trades in Minnesota today where we have high unemployment in that sector. Who are sitting on benches, waiting on unemployment lines. Who would have, had Governor Pawlenty been responsible, be working today. And they will be working next year or shortly thereafter if I’m Governor. In terms of the light rail that’s another aspect of capital investment that the state needs to make. Frankly, in conjunction with the federal government during, giving the cost of those projects. Would that we had some 40 years ago recognized the wisdom and foresight of the, one of the early Metropolitan Councils in terms of the need for light rail, public transit system of that kind, but we hadn’t, we didn’t then. And we’re going to need to proceed now even though they are more expensive, they’re going through more densely populated areas. It’s gonna take longer. But again if we’re talking about 50 to 100 years into the future that along with buses which is still the most flexible and probably the cost-efficient form of public transit have to be key parts of our investment strategy. 26:37

Bruce Nustad: Thank you Mark Dayton. Tom Emmer. 26:40

Tom Emmer: The – it’s interesting to listen to the discussion. The first off the question is based on the premises that you get to decide what you’re going to spend before you decide what you’re going to spend it on. I’m sorry but I come from outside of government. If we did that at our kitchen table we’d be done very quickly. First you have to figure out what your priorities are. Then you have to figure out what you can afford. And there is a certain balance. I hear, ‘I’ve proposed a billion dollar bonding bill.’ Well ladies and gentlemen it’s easy to spend somebody else’s money. But you’ve gotta keep in mind, that every dollar you pull out of the private sector is a dollar that cannot be used to generate new opportunities in the private sector. If you don’t have jobs growing in the private sector, you are not going to grow revenues for the things that you expect to purchase with government. There’s a disconnect that somehow the money’s just going to continue to flow even if we are not growing our private economy. Bonding should be used for our priorities. It should be used for public infrastructure, those long-term capital improvements that you and I can look at our kids twenty years from now and say “That was something we did which adds value to your quality of life and your economy today.” It is roads and bridges and when we talk about the light rail I think we have to recognize that transit is a very important part of our transportation formula. But you’ve gotta look at where you get the highest value for the dollars that you put in. Unlike my colleagues I actually take the bus. I pick it up at Wayzata and I take it to the Capitol. And it actually is a very wonderful form of transit. And we should be looking again, where do you get the highest value for your dollar? Is it on the light rail that’s going Northstar? When you add capital expense and you add operating costs we’re subsidizing forty dollars a ride right now. Let’s look at where we get the highest value for our dollar. And maybe it is rail. But let’s be open to understanding, it’s about mobility. Moving people and goods and let’s do it with the highest value, highest return 28:45

Bruce Nustad: Thank you. Since you all mentioned transportation in your response let’s do a followup question related to transportation. Twin West is a great advocate for transparency when it comes to transit and transportation projects. As a business community we know it’s important to built transit and transportation infrastructure to capacity where goods and services can be moved around the state in an efficient manner. In support of this Twin West happened to support the raising of the gas tax in 2008. Now that we have the opportunity for additional revenues into the transportation system, how do you propose ensure that we get the best value for investment at the state level? And we’ll start out with Tom Emmer. 29:23

Tom Emmer: Well, I think first off you have to make sure that when you have a low bidder like we had on the 35 I35 bridge we had two low bidders from Minnesota that produced bids that were not only solid but they were value oriented And somehow we gave that bid to somebody outside of the state of Minnesota. That should never happen. And I think you have to change the way we evaluate bids from the start. Second I think you’ll hear from all three of us, I’d be surprised if you wouldn’t, that these should be made available to the general public. They should be online so people in general public can access it, whether you’re an individual citizen or a business so you can actually see what the cost is, what the projected completion dates are, so that you get an understanding of whether or not you’re getting value for the dollars that you’re paying, the tax dollars that you’re paying. And lastly, it’s gotta be based on where do we get the biggest bang for our buck. Where do get the highest return for our dollar. Where do we move the most people and where do we have the most flexibility in case times change. When you put in permanent infrastructure you can’t move it as easily as when you have infrastructure for instance a bus system that is can be nimble if it’s operated correctly. Again, I’m gonna keep harping on it. It’s highest value. And it’s about jobs for the long term. Because the other thing with some projects is what is the liability out 20 30 50 100 years? I mean we’ve seen that it’s not the capital expenditure that you build the infrastructure with, it’s the maintenance cost and the long-term financial liability. We have to be looking more than just at the next election. 31:10

Bruce Nustad: Thank you. Mark Dayton, your thoughts on how do we get the best value out of our investment? 31:15

Mark Dayton: Well first of all if you want an illustration of the consequences of the failure to make sound public investments in the future of our state, you only have to look at our transportation congestion in the metropolitan area. I mean it is just catastrophic. And in greater Minnesota having driven all over this state for the last several months the deterioration of our highways there has the same effect on people. On the ability for businesses to get their goods to markets, their ability to get their employees to and from work, to get themselves to and from work. The safety aspects of the loss of lives, and the cost to businesses, not to mention the tragedy to families from these failures. So those who you know just consistently say that government should do nothing at all but want to run it, need to recognize that now we have after 20 years of a failure to keep pace with the investments that were being made in the 1980s where according to MnDOT, a $65 billion dollar backlog of needed transportation projects. And I can attest when I was a Senator, people came to me from all over the state for limited amount of federal money. I mean, these are urgently needed projects. These are ready to go. These are constricting business growth all over the state. We need to do what a number of other states are now doing, which is issue highway construction bonds, they’re called Garvey bonds. They’re backed by part of the federal Highway Trust Fund revenues, particularly the increase. It’s great to go pay as you go, as we have been able to do in the past, but when you’re $65 billion dollars behind, and you’re constricting social and economic vitality, we have to make increase those investments. Georgia is completing in I believe it’s about 8 years what it would have taken 26 years if they hadn’t been able to fast forward accelerate these projects. We need to complete projects in one or two construction seasons rather than in six and seven by doing them piecemeal. And there’s no more critical area where we need to make public investments, responsible sound ones, have a professional Department of Transportation run by a professional to make good investments if we’re going to make a better future for this state. 33:19

Bruce Nustad: Thank you Mark Dayton. Tom Horner your thoughts on the best value and how we get it for our transportation dollars at the state level. 33:26

Tom Horner: Sure I mean first we have to be honest with people and lay out what the scope of what the dilemma is. And it’s fine, Senator, to talk about Garvey bonds, but in fact Minnesota has looked at those and they don’t provide much value for the state and you can talk to transportation experts who will say the same thing. We just need to be honest. We need to be honest Representative Emmer to say that we should have increased the tax the gas tax in 2008. It was the right thing to do. It was the right thing when we need to make investments in the infrastructure. And having listened to your answer on the bonding bill, I think what I heard you say is you’re going to continue your perfect record of opposing every bonding bill, because you didn’t say you were going to be for anything. So we do need to bring transparency, we do need to make investments.
And so a couple of things that I think are important. One is I’m glad Representative Emmer has adopted my idea to set standards, to set accountability, to set measures, and then post it on the Web site. Make people aware. Now again, that takes an investment. You don’t just hire a 25-year-old and say “Create a Web site for me and we’ll make everything accountable.” You need to make an investment in the IT. You need to make an investment in broadband around the state so everybody can see it. So everybody can access it. So that it has some meaning. And on the $65 billion dollar shortfall Senator, I agree with you. But we don’t just do it in traditional ways and say “Let’s divide the money by 201 the number of legislative districts and do a little bit in every district around the state.” The reality is we have $15 billion dollars in money that we know about. We need to set priorities. We need to set outcomes. We need to take that $15 billion dollars and say “What are the most important investments we can make for the economic assets?” And it may not just be in the metropolitan area. It may be highway 14. And then you take the next tier of priorities and you say “How are we going to fund these?” It may be user fees. And it may be a higher gas tax. And then you take the rest of them and you say “Hey, they don’t fit into our priorities. They don’t meet the outcomes that we need to set for the state.” And that’s how you move to outcome based budgeting. Not with a lot of philosophy. With hard decisions. With leadership. 35:37

Bruce Nustad: Thank you Mr. Horner. Our next question relates to health care. Uncertainty is one of the strongest obstacles as all of us know in the room here to economic recovery especially when businesses are looking to hire. Several months ago the federal government passed a significant healthcare reform package that contains phase-in dates and provisions that are difficult I think for small businesses to digest and get their arms around. In light of that uncertainty created by health care reform, including the potential for taxes and mandates, what will your administration do to help lower or control healthcare costs or increase premium predictability for businesses? We’ll start with Senator Dayton. 36:17

Mark Dayton: Well I’m not a fan of the what came out of what came out finally out of Congress in Washington. Although any Governor as long as that’s the law is gonna be challenged to work within that framework and to as Governor Pawlenty should be doing now to request the $263 million dollars that is available. We need to finance aspects of state government so they won’t have to withhold the refunds on capital equipment expenditures and others. We need to bring in the federal Medicaid money for a net investment, a net expenditure of $188 million dollars which is already factored into the budget. We can get $1.4 billion dollars in federal money for the elderly and low-income Minnesotans and provide them with better quality health care and equally importantly provide hospitals especially in greater Minnesota with the financial stability that they can afford to provide those services to those the least fortunate of those among us as well as to our all other citizens. So in terms of job creation and rural economic stability one of the key things that needs to be done is to stabilize that aspect of funding. And if it is not paid that way, you and others will pay through higher insurance rates indirectly. I support national single payer health care. I think we’ll get there eventually somewhere along the line Because when United Health Care reports a quarterly profit of over a billion dollars and by its own financial reckoning pays only 81 cents for every dollar of health insurance premiums it takes in for health care, and Medicare which is far from perfect pays 97 cents of every health care dollar for health care. That difference between 81 cents on the dollar and 97 cents on the dollar is one of the reasons that health care and health insurance are unaffordable for increasing numbers of Americans. And I know the other 2 of my colleagues here will be delighted to take shots at my at that philosophy. But the fact is we will find in the next decade health insurance is increasingly out of the reach of most Minnesotans and the cost of health care, even with insurance and certainly without it, is increasingly so, and that becomes an economic burden on businesses. And it’s a real job stifler. 38:26

Bruce Nustad: Thank you. Mr. Horner your thoughts on costs and predictability. 38:30

Tom Horner: Absolutely. And Senator I will oblige you. I don’t think single payer system is the way to go. I don’t think a government-run system is the way to go. But I also don’t think that turning it over to charity care is the way to go. Minnesota does have a good system. But we do need to recognize that if we don’t make investments in health care, the cost doesn’t go away. It’s a tax on all of you. A tax on businesses, a tax on individuals, a tax on the property if you live in Hennepin and have to pay for HCMC as a result of the horrendous decisions made by the Legislature this year. It’s a tax that we pay. And we’ve gotta figure this out. And I think we do a couple of things, and again you will see all of this in specific detail in my budget at Horner2010.com. And so a couple of things. First we need to invest in prevention. We need to make people healthier and help them be healthier. And hold them accountable for their own personal health behaviors. Some of it is around investment in what communities can do. Some of it is good public policy. In my budget I do suggest that we increase the tobacco tax. There is no good public policy that supports cheap cigarettes. Tobacco costs two billion dollars a year in excess medical costs. We ought to encourage people to quit. Particularly when we have state of the art cessation programs. Start the transition to an older population today. There will be $140 million dollars. We ought to encourage people to quit, particularly when we have state of the art cessation programs. We need to invest in older adult services. Start making that transition to an older population today before the crisis is upon us. And that’s in my budget. We do need to take the early opt-in to Medicaid. It will be $140 million dollars. That’s in my budget. Because only when we get more people covered can we do true reform. And ultimately, true reform is going to come down to personal responsibility, managed chronic care, when 5% of the population consumes 50% of the cost we have to manage that, And we have to drive quality over outcomes. Hold the whole system accountable. But ultimately one of the things that people don’t look at is we need to better understand where the costs are and then hold everybody accountable for driving change and reform quicker. 40:39

Bruce Nustad: Thank you Mr. Horner. Representative Emmer. 40:41

Tom Emmer: Well there is a distinct difference. On the one hand you have the politics as usual thing thing that we’ve had in Minnesota. We’ve got great people. This has got nothing to do with what party you represent. It has to do with whether you have a belief that people can be responsible for themselves and if given the right choices are able to make those decisions on their own or if government’s gotta take care of all of us. We talk about a government health care plan. There is nothing that government does better than we do in the private sector, when given the opportunity when government gets out of the way. And then we talk about creating a system where government’s gonna tell people how they should be healthy. I think when we talk about what we’re doing going forward, well-meaning people in this state back in the early seventies tried to take a great healthcare system and make it better. We aren’t going to point fingers. We just have to realize that three decades later it’s it’s not gonna be the answer for the long term for the state of Minnesota. When it comes to where we’re headed in this state, we have got to look at putting people in back charge of their own healthcare decisions. Obamacare, as it’s been called, the government system that’s been promoted for the next Legislature, the next Governor, is going to be an issue. Absolutely. It’s frozen hiring in a lot of businesses that don’t realize or don’t understand quite yet how it’s going to impact them. Reality: we may not have enough money to put it all into place. And we don’t have the infrastructure, government doesn’t have the infrastructure to do it. So the next Governor better lead. And you lead by giving people more choices. We should allow people to make choices as to what their coverage is going to be. We should empower them. To shop one of the 1300 health insurance products all across this country. We should give individuals the same right to deduct their health care insurance premiums that right now we only give to employers. You do these things and not only do we, are we able to celebrate the 90 to 94 percent of people in this state who do have access to health insurance, but you will drive cost down by creating more choice giving more people more real responsibility over themselves. That’s where we need to head. 42:45

Bruce Nustad: Thank you Representative Emmer. Tom Horner has requested a one minute rebuttal. 42:49

Tom Horner: Yes. So I just want to point out, Representative Emmer, that choices are meaningless when people can’t exercise those choices. The program for low income, for the most vulnerable Minnesotans, GAMC, than you passed this year, is dealing with people who have incomes of $8,000 or less, and assets of $1,000 or less. When you say to them, “Oh just go into the private market and don’t worry, we’re gonna make that private market bigger by bringing in a lot of insurers,” that’s no choice. When you say to them, “Just go to hospitals and they’ll take care of you,” that’s no choice. That’s an unfunded mandate that falls on the people on this room. In higher insurance premiums, in higher property taxes in Hennepin County. In higher medical costs that all of us (COUGH, 43:49) pay out of pocket. You’ve gotta be real. You have to have the leadership to stand up to these issues and say “Here’s a vision, here’s the budget, we’ll make the tough choices and get it done.” Not through rhetoric, but by bringing people together and finding good answers. 43:54

Bruce Nustad: Representative Emmer your one-minute rebuttal. 43:57

Tom Emmer: You know it’s interesting when you get into these situations. The rancor, the aggressiveness. I’ll just tell you what I do believe. We had In the last biennium roughly 40,000 people that were running at $400,000 dollars, ah $400 million for the state of Minnesota. They are the poorest of the poor. They suffer from all kinds of terrible afflictions. Chemical dependency. Chronic illness. We couldn’t sustain that. And we want to provide some type of safety net. No, I would agree the solution that was passed in the Legislature in the last session was not the ultimate answer. And it will be revisited come next Legislative session. What’s the answer? I believe the answer going forward is let’s get government out of the business of brokering charity. Let’s allow the clinics, the hospitals, the doctors of this state who want to provide that care, give them the ability to keep more of their hard-earned income by providing the care that’s necessary to this population. Let’s take government out of that picture and let’s incent people to do what they already want to do. 44:58

Bruce Nustad: Thank you. Next question relates to education reform and workforce development. And I should have mentioned earlier that the questions today were derived from Twin West Business Agenda it’s a policy document we have at the Twin West Chamber that you’re welcome to check out online candidates. This question actually though was submitted by one of our members, the Wayzata Public Schools Legislative Action Committee. The strength of the E through 12 education system is vital to the state’s future economic growth and development. Minnesota like most states around the country is experiencing an academic achievement gap between certain ethnic and socioeconomic groups. From a workforce development perspective we know it’s critical to have students proficient in basic skills and better yet well acclimated to science technology engineering and math. The question is, what changes to the state’s E through 12 education system would you advocate in order to meet the learning needs of all students? And how does education reform fit into your plan? We’ll start out with Tom Horner. 45:55

Tom Horner: Well thank you and I would expand that a little bit. I don’t think it’s E through 12, I think it’s E through forever. And we need to be thinking about education as a seamless system from cradle to grave. People are going to need lifelong learning today. They’re going to need the opportunity to refresh their skills, to develop new skills, to learn new trades in the economy that’s going to exist. And we need to make that investment. And again, when you look at my budget, there are specific dollars set aside for all these things that I’m going to talk about. So first of all, look at the opportunity we have next year with a new chancellor of MnSCU, a new president of university, a new Governor, to have a statewide conversation on what do we want out of higher education in this state. And put everything on the table. The alignment, the systems, the bricks and mortar, and make decisions. Because we need strong vo-tech schools, we need strong community colleges, we need strong four-year institutions. But you start with outcomes. And the outcome we need in Minnesota are more Minnesotans with some level of post-high school education. We have right now about 40 percent who have some kind of two-year or four-year graduate degree. We need to bump that up to 60 percent. We need to make sure that in our communities around the state, that their community colleges, vo-techs, are tied to the regional economic assets that they have in their area, so that they can grow and flourish. But when you back it all up you see we can’t afford a high school graduation rate that is 60 percent and falling among some of our communities. So that backs us up to say we need to make an investment in early learning. Not just lip service to it but money. Real money. Even in a $6 billion dollar shortfall. We need to invest in early learning. We need to invest in reform. We need to make sure that the Education Minnesota rules on seniority are not the rules that determine whether or not we can have innovative programs in our schools around the state. We need to put teachers in charge of the schools. We need to make sure we have great principals who are running the schools and working with the teachers so that we can close the achievement gap, improve the quality of education, and get more value for every dollar we spend. 48:06

Bruce Nustad: Thank you. Same question to you Tom Emmer. 48:09

Tom Emmer: The, those are good points. And I think I would go a little farther when we talk about our education system. We have great students. And we have a lot to be proud of in the state of Minnesota. But we’ve got a lot of work to do too. We are no longer, our children are no longer compared with Wisconsin, Iowa, North and South Dakota. They’re being compared internationally. Whether we like it or not, our children internationally are falling in the middle of the pack. It’s not about just throwing more money at it, it’s about where we put those investments. I do believe in early childhood investments. We’ve got a lot of money going there already. It’s just not focused in terms of where should that money be spent, where do you get the biggest bang for your buck. You know, New Horizon Academy’s a great example. Some of you may be familiar with New Horizon. They opened up one of their academies on Rice Street with some in partnership with some local businesses, because businesses understand that we can do all the government redesign we want, we can create all the new jobs that we want, but if we don’t have the labor, the workforce, to drive that new system that system we won’t succeed. So what they do at New Horizon tells me that it takes about three years to fill one of these academies. In this case on Rice Street I’m told it was filled in six months and there’s a waiting list. We have not been succeeding when we attack the achievement gap in this state. It is unacceptable that a child in Battle Lake for instance gets $5,000 dollars roughly under the state’s formula while a student in Minneapolis gets $15,000 dollars or more. Plus the results don’t show that the more money we spend gets us the result we want. When you have a four-year graduation rate in Minneapolis of less than 50 percent clearly we’re not doing the right things. Science shows that a child’s brain is wired for learning before the age of five. Let’s be more focused on what we do with that three- and four-year-old level. Let’s get those kids ready to compete when they get to the classroom. That will attack the achievement gap. And then let’s make sure that we have the workforce that will drive our economy in the years to come. 50:10

Bruce Nustad: Mark Dayton, how do we meet the needs of our students and how does reform fit into your plans? 50:13

Mark Dayton: Well we need to refund then we need to reform. We agree that early childhood education is vitally important. And it is, but in fact Minnesota has been reducing its funding for early childhood education. And that’s had, the fact that we are one of the poorest states in the nation in terms of the participation of our 3- and 4-year-olds in these early childhood opportunities. And as former Republican State Senator leader Duane Benson is working with Minnesota business partnership companies to find the best strategies and then to fund those, he’s telling those businesses, many of you, that these are investments in your future workforce. That are essential again for the longterm vitality of our state. I voted against No Child Left Behind in Washington. It’s excessively burdensome testing. We test children now in Minnesota in third, fourth, fifth, sixth, seventh, eighth, tenth, and eleventh grades. And there are even procedures on what to do when a third or fourth grader is so anxious about the test that they they, excuse me, but they throw up on the test. That’s what we’re stressing kids out. We’re preventing teachers from teaching for results that aren’t available to the schools until after the end of the school year. And then comparing this year’s fourth grade class to last year’s fourth grade class which is an invalid statistical comparison. Instead we need to do individual, what they’re doing in St. Croix school district or Lakeville. They’re doing a one-minute reading out loud diagnostic test in the first week of second, third, fourth grade. They can determine which children are reading below grade level. If they have the resources they can provide either individual or small group remedial work. And if that child stays in that school the whole year in 85 percent of the cases that child is reading above grade level by the end of the year. That’s life transforming. We need to re-fund education because real student aid per pupil has been cut by the state by an average of $1300 per student under Governor Pawlenty’s two terms. And that means overcrowded classrooms. It’s also one of the principal reasons that property taxes have gone up all over the state, more than doubled in the last decade in fact. We need to get rid of bad teachers, we need to get rid of bad principals, we need to look at our curriculum and make sure kids are prepared for the future. And I could go on and on and on but I’m out of time. 52:19

Bruce Nustad: Thank you Senator. A question in the area of public employee pension reform, kind of a hot issue right now. There’s widespread belief that public pension systems for government employees including teachers are not financially sustainable. There’s evidence in many of the systems that we see including the talk around the Minneapolis employee retirement fund, which identified about a seven hundred million dollar problem in its fund, and the Minnesota Teachers Retirement Association which estimated during the legislative session that it needs about two hundred million dollars. This issue is especially concerning to business owners where pension systems changed years ago from a defined benefit system to a defined contribution system. What can we do to fix the current problem and prevent it from growing in the future? We’ll start with Representative Emmer. 53:04

Tom Emmer: Well, first you have to change, government has to reform itself the way the private sector has. You know, it’s more than just pensions, Bruce. We look now, you’ve seen some of the studies hopefully that have been coming out that shows on average a person who works in the private sector in a job similar to that of somebody who’s working in the private sector is making on average thirty to forty percent less. That’s not right. More importantly when you look at government employees – and by the way these are good people. I don’t fault them. It’s human nature. They should try to do the best that they can do. But this is where the imbalance comes in. Not only do our public employees make on average thirty to forty percent more than private sector employees in the same positions or similar positions, but then they have healthcare insurance that’s gold-plated healthcare while people in the private sector are lucky if they’re keeping theirs. And then you get to the pension aspect. Those defined benefit plans, they get the guarantee of their future. While the rest of us, if we’re lucky enough to have a 401k plan are watching it ride the rollercoaster of the market. And we’re either delaying retirement or we’re wondering whether we’re ever going to be able to retire. You have to look at this as a longterm issue that has to be dealt with. At the last Legislature it was very disappointing. Yeah we made some changes, just tweaked it a little bit. But there was no longterm structural reform so that the debt is still there and I’ll give you one of the reforms, the so-called reforms that was passed. When you have for instance a mortgage and you’ve got 20 years left and you’ve got a certain amount of debt that’s under that mortgage, guess what. If you just extend that mortgage to 40 years all of a sudden it looks a lot better. That was one of the things we did with the public employee pensions last session. That’s not the answer for longterm structural reform. The answer for longterm structural reform is to have defined benefit plans – defined contribution plans like the private sector. 55:11

Bruce Nustad: Senator Dayton, your response to that question. 55:15

Mark Dayton: Well, years ago companies like General Mills provided pensions for their employees, and they knew if they worked hard all their lives, and made their career with that company, they would have a secure retirement income. And now, most companies have gone to a defined contribution and employees are on their own. And you ask employees, especially after the vagaries of the stock market the last couple of years, where their retirement savings have dropped by 50% or more, and all that insecurity, if they think they’re better off under this new system, I’d be surprised if a lot of them would agree. If you talk to a woman up in Two Harbors whose husband died after working 31 years for U.S. Steel, and she was told by the company that because of the intricacies of their plan which she wasn’t aware of, she’s now going to receive only $51 a month. And she looks at me with tears streaming down her eyes and says, “How do they expect me to live on $51 a month?” It made me appreciate why a defined benefit plan is something that people who have it aren’t willing to actually give up very readily. Because it’s retirement security. People who work all of their careers in the public sector, they don’t make a lot of money in total and they don’t have a lot of retirement income. But they have secure income. They’ve bargained for those retirement benefits. As they’ve bargained also for their health insurance. And the school districts in this state buy health insurance on the private market. Just like companies do. And try telling a woman who’s a clerk at a school who can get the best policy possible for herself, a single mother and three children for $20,000. But she only makes $18,000 a year. So she has to insure herself as the breadwinner and hope her three children don’t get sick. Ask her if that’s a gold-plated plan. Do these plans need to be actuarially sound? Yes, in fact when I was with the State Board of Investment and Governor Carlson headed the state board of investment they were. And again with a downturn of the market they’ve lost some of that actuarial security and they made changes in the last session about two point one billion. If that doesn’t work we’ll have to do more. But I think to denigrate people because they want retirement security is really misguided. 57:22

Bruce Nustad: Mr. Horner, your thoughts on our pension, government pension system. 57:28

Tom Horner: Well, this is another one of those areas where we’ve heard great stories and no solutions. First of all, I do want to say, Representative Emmer, I have to be honest, I haven’t heard that statistic other than from you that public employees are making thirty to forty percent more than private sector workers for comparable jobs. If that is true, and I have no reason to doubt your veracity, if it is true, shame on you, who have been in charge, to allow that disparity to grow. There’s the problem. So we do need to make a transition. Everybody agrees. I mean we all acknowledge that we have to start making a transition with younger workers coming into our public workforce to go to a defined contribution plan. And we can sit down and make that happen. But look. Here’s the honest answer. For those people who are close to retirement, those people who have banked on these plans, we can’t pull the rug out from under them. The largest public employee fund estimates that in ten years, the best case scenario is that we’ll have sixty cents on the dollar to pay off the pensions. We need to find those forty cents. And there are only three solutions, regardless of what my friends say. The employees can pay for it through higher contributions, the retirees can pay for it through lower benefits, or we can pay for it through higher taxes. And the reality, it’s going to take all three. Let’s be honest. It’s going to take all three, it’s going to take sitting down with public employees, with unions, with interest groups, and figuring out how to do this. And there’s the challenge of the next four years. The Democrats, they’re not going to challenge the public unions. They’re not going to challenge them to come to the table and be part of the solution. But the Republicans aren’t going to challenge Minnesotans to do what’s right. We need a Governor who’s willing to do both. 59:18

Bruce Nustad: Representative Emmer, your one-minute rebuttal. 59:22

Tom Emmer: Yeah. It won’t take a minute. You left out an important one. Y’know, this is the thing that we complain about. And I’ll take responsibility for being in the Legislature for the past six years. But take a look at some of the ideas we’ve offered to eliminate gridlock. Trying to get the Legislature, give the Governor a different tool other than unallotment. Give the Governor the opportunity to declare a fiscal emergency. And that’s simply defined as your revenues are not going to meet your expenditures. And then force the Legislature to come up with a balanced budget within 45 days. Imagine a world where the Governor has a budget out by the end of January and the Legislature has one out by the middle of February. There’d be a lot more work that’s done that’s credible. But you left out the most important one. It’s not just asking for the good people of Minnesota to pony up more money when they’re struggling trying to pay the mortgage, put food on the table, when a lot of them are unemployed. It’s about reducing spending in government and starting to be responsible with our government, not just constantly going back to the well, which quite frankly is drying up. 1:00:25

Bruce Nustad: Mr. Horner!

Tom Horner: And let me just quickly rebut that if you go to Horner2010.com, you’ll see my plan to reduce spending in government. If you go to tomemmer.com…(Horner silence, audience laughs) 1:00:38

Bruce Nustad: Next question. Thank you Mr. Horner. It’s our final question of the day. It’s before our closing remarks. And it relates to the attitude, the general attitude toward businesses. This question was submitted by Twin West Board Chair Steve Wise of Cass Screw Machine Products. We’ve all heard stories about neighboring states and how they treat their businesses not just like cherished citizens but as good cultural components of society and contributors. As Minnesota’s next Governor, what will you do to improve the business climate, encourage business expansion and job growth, and attract new businesses to the state? It is the million dollar question today. For the answers we’ll start with Senator Dayton. 1:01:17

Mark Dayton: A few years ago this month I was up in Thief River Falls. I met with the self-described very Republican mayor of Thief River Falls, and he expressed his frustration, because there are two companies up there, DigiKey, which employs about 2,000 people, and they’d actually like to add about 900 more jobs up there if they can get the infrastructure improvements to the airport, and ArcticCat, and he couldn’t get a stoplight on Highway 59, where 4,000 people almost come to and from work every day. And he couldn’t get the time of day from the Governor or the Commissioner of Transportation. So I said, “Well, I know where the Governor lives, I’ll write him a letter.” And I did, and he bucked it ot the Commissioner, who responded a month later in the middle of September, and informed the mayor that he couldn’t get up there until three months later in the middle of December, and then finally did and according to the mayor flew up there in a chartered plane for probably half the cost of the stoplight. To tell him that unfortunately that was not in the transportation plan until 2013. Well I went back several months ago to check up. Well now they’re studying it for a year. And nothing is happening. And I met with the chief executives for DigiKey. To let them know if I’m Governor they don’t have to come to the Capitol to try to get that. I will go to them. And I promised them that if I’m Governor there will be a stoplight in the bonding bill next year and the day after I sign it I’ll come up with a shovel and start digging the hole myself. And I will. That’s the kind of hands on assistance I learned from Governor Rudy Perpich, who was the best jobs Governor this state ever had. In fact back then when we had progressive taxes, back when anybody in this state, anyone in this country, anywhere in this world, that he could identify that had a job to be provided in Minnesota, Rudy was on a plane, he was on the phone, and that’s what I’ll do as Governor. We need to sell this state, we need to be as proactive as we possibly can, we need to let businesses know as we did with the Star Cities Economic Development Training Program when I was the Commissioner, how the local governments coUld identify business opportunities right in their own communities, which are always the best sources of new job creation, and if I’m Governor I will go with those local development officials, chambers and others, every one of those businesses and let them know they’re important here in Minnesota. We want their jobs right here in this state. 1:03:20

Bruce Nustad: Thank you Senator Dayton , Representative Emmer, your response to that question. 1:03:24

Tom Emmer: Well first, Senator, DigiKey, I don’t know if you’re aware, but it’s a great employer as we both know up in the Thief River Falls area. I don’t know if you’re aware but DigiKey is a sole proprietorship. And the taxes that you proposed would not only preclude DigiKey from expanding but may very well have them packing up and leaving. It would hit them dramatically hard and I hope that you talked to them about that. The first thing that you have to do is redesign government so it’s efficient. Eliminate all the duplication in government. We’ve got several agencies in this state that have all got rule-making authority, jurisdiction that overlaps, and now they’re all competing for the ability to enforce their rules as well. You’ve gotta make Minnesota a one-window stop for business. And it’s gotta be predictable so that when someone comes in with an opportunity they know how much it’s gonna cost and how much time it’s gonna take. Second you must reduce taxes. I mean I love when I hear all the time, “You’ve gotta give more.” Folks, look at Rhode Island. In June Rhode Island, with a moderate Republican Governor and a Democrat-controlled Legislature passed across the board income tax cuts. Took five tax classifications, reduced ‘em to three. Took the top taxable rate, reduced it by almost forty percent. When asked why, because they had to stop the outflow of jobs from Rhode Island. Next you gotta eliminate excessive and unnecessary regulation that’s frankly is stopping this state from expanding having opportunities expand and bringing new investment and jobs to this state. You’ve gotta create an attitude that Minnesota is open for business. Minnesota welcomes your business. Minnesota wants to do whatever is necessary to help you realize your opportunities. But we gotta change this idea that in Minnesota government is the one that can tell you best how to invest your money. We’ve gotta give you the opportunity to do that because people, if given the right opportunity, the right incentive, will grow better opportunities for themselves, and then it’s that old adage: a rising tide lifts all boats. 1:05:27

Bruce Nustad: Tom Horner, how do we improve today’s business climate? 1:05:30

Tom Horner: Well first of all, I absolutely agree that we need tax reform. We do need to allow businesses to make investments in research and development, for small manufacturers to have the ability to purchase capital equipment without having to pay sales tax, to reduce the corporate income tax. Eventually I’d like to get to not just taxing small businesses, but give those sub-S and LLCs and others the opportunity to hold back some of their earnings. Retain it in the company so that they have the money for investment. But here’s the problem Representative Emmer. Is that on one hand you say “Don’t worry, revenues are going to grow, we’ll just grow our way out of this mess.” And then you turn around and say, “But we need to cut taxes.” You can’t use the same dollar several times over. You can only use the dollar once. Unless you put it into the private sector and they leverage it. That’s what my proposal does. So do I want to raise taxes? Of course not. Who likes to pay taxes? Do we need to raise taxes as a responsible measure of leadership? So that we can reduce taxes in the areas that are going to leverage those dollars and create the jobs? Absolutely. And that’s what my specific plan is. But it also says, Look. We do need to streamline the permitting process. We ought to have not just a single window, we ought to allow everyone who’s applying for a permit a single application on a Web site and every agency, every local, state, county, goes to that same application with the commitment that in non-extraordinary circumstances, six months, you’ll get an answer. Secondly, we need to invest in research at our two- and four-year schools. Both basic and applied research as a separate line item in the budget. So that we’re creating the new ideas, innovation, technology, that the private sector can commercialize in a tax environment in which we have investment capital available. We need to create make sure we have the talent pool that’s necessary, the infrastructure to build on our regional assets, broadband, it is important, it’s not just a speedy kind of thing. And we need leadership. We need leadership to make all of this happen. To bring the parties together. To make the tough decisions. 1:07:36

Bruce Nustad: Thank you very much Mr. Horner. That actually brings us to the end of our formal questions for the day but we do want to allow each of the candidates a three minute closing remark block. We’ll ask you to give why you believe you’re the best choice to be Minnesota’s next Governor and what type of legacy you’d like people to remember. It’s hard to think of being elected and going through your term already but what type of legacy do you want people to remember you as for your time as Minnesota’s CEO? Again each candidate will have three minutes for the closing remark and we will start with Mr. Horner. 1:08:08

Tom Horner: Well, thank you very much. I really appreciate the opportunity to be here, to to lay out the differences, and as you see, they are very clear differences. But there are also differences in consistency and continuity. I’m impressed that it took Senator Dayton a decade to change some of his core positions. Representative Emmer seems to do it from debate to debate. And that’s not what Minnesota needs. We need a clear vision. We need a clear focus on where we’re going. And so let me spell out what I think are the major differences. I don’t think that that we’re going to grow our way out of a budget problem if we don’t do the right things. We can have economic growth, we should have economic growth. But every expert that has looked at this problem, including the budget commission two years ago that took a look at it, co-chaired by a conservative legislator, a conservative commissioner, of one of Governor Pawlenty’s departments, said “We’re not going to grow our way out if we don’t make the tough decisions.” Expenditures are going to overwhelm revenue. We’re not going to have extra revenue sitting around in the bank account. But we’re also not going to tax our way out of this. We’re going to reform our way out of it. We’re going to make smart decisions. We need tax reform in which we do put the dollars back into the the economy through investments that you, the job creators, make. When you kill job creators, you kill jobs. And taxing small businesses, not creating true reform, for our great corporations, not allowing the money for investments in research and development, in growth in new jobs, not allowing Minnesota to be part of the economy as it is going to be, not the economy as it was. That’s a losing proposition and we can’t afford that. So let me tell you what I’ve laid out, and I hope you do go look at my plan because it is specific. Have I mentioned Horner 2010.com? Tax reform. We need the dollars to create new jobs, new opportunities for investments, new businesses that will grow and create those jobs. Secondly, we do have to have spending cuts. We do need to make government more efficient and effective. And I’ve laid out some specific spending cuts. But we also need to make investments. In education, in health care, in our infrastructure, broadband as well as our bricks and mortar, and roads and bridges. We need to do all of these things, and we can, and we can do it responsibly, and we can do it in a budget that is under control, where dollars are being used more wisely. But we also have to be honest with with Minnesotans. Look, you may have seen the headline in the morning paper about how all three of us support the Vikings’ plan. Weeell, I guess to an extent we do, but I’m the only one that has put details on the table as to how we’re going to pay for it. Senator Dayton says, “We’ll wait until the crisis hits and then hope we can do it.” And Representative Emmer says, “Well, if we can find the money maybe we’ll do it.” That’s not supporting a Vikings stadium. We need to have the courage to say “Those are important assets.” We need to be bold, we need bold leadership, and I need bold voters. So I’m asking you for your support, and I very much appreciate the opportunity to be here with you this morning. Thank you. 1:11:21

Bruce Nustad: Thank you Tom Horner. Next for closing statement we’ll go to Mark Dayton. 1:1123

Mark Dayton: Who will be the next Governor of Minnesota? Who will be the best Governor for the future of Minnesota, is for all of you to decide, and for your fellow citizens to decide on November second. I think Minnesota voters are very pragmatic. And that’s why these debates are excellent opportunities for all of you to assess us and decide for yourselves. We will lead this state in different directions, and it’s for you to decide and others, who will make this a better state in a way that best represents your interests and those of your family and your fellow citizens. Because none of us are islands unto ourselves, we’re interdependent. Government is We the People. It was founded on that premise and that’s still all it is. And everything it is. And it is a way in which we collectively make decisions that we think will ultimately are going to best serve our state and our nation. And the fact that we have different points of view is the greatness of our democracy. And the greatness of our electoral process. I have proposed, and I give Mr. Horner credit also, for proposing in a fair amount of detail, and you can visit his Web site and visit mine as well, how we’re going to balance the next state projected deficit of 5.8 billion dollars. We didn’t create that deficit. Nobody likes to raise taxes, I couldn’t agree with Mr. Horner more. But the reality is, either absent job growth which will occur hopefully but slowly the econometric forecast predicts, we have to raise revenues or you have to cut spending. As you pointed out earlier, as businesspeople you know how to deal with numbers. 95% of the state budget goes for 48% education, 30% health and human services, 9% property taxes and local government aids, 5% public safety and 3% debt service. That’s 95%. So one of the reasons I think Representative Emmer won’t tell us what his budget’s gonna be is because it’ll expose the fiction that somehow this is just gonna happen without serious consequences to people. But it’s not gonna happen as Governor Pawlenty’s budget fictions have without raising property taxes. A recent study showed that Minnesota businesses actually paid more in property taxes than, and then next in sales taxes, than they do in corporate income tax. And when property taxes have more than doubled in this state, and to think Representative Emmer if you want to limit aid, local government aids as you propose, that that’s not gonna raise property taxes all over the state (COUGH, 1:13:45), and then at the Almanac budget exercise you said you were gonna cut state funding for education, K–12, by 19%. And if that’s not gonna mean more overcrowded classrooms, poorer quality education and higher property taxes as well, it’s just fiction. And you deserve the facts. You deserve those facts from all of us. I will raise revenues, I’ll do it progressively, and then I’ll invest that money first and foremost in education. Because that is our future. We can talk about it, we can reform it, but we also need to fund it. That’s just the hard truth. You can’t cut state funding for education by thirteen hundred dollars per student in real after-inflation dollars and expect better quality education. You won’t get it. You can’t make tuitions unaffordable all over this state in our public colleges and universities for hard-working Minnesotans and their families and their children, and expect quality workers for your businesses in the future. We need to invest in education. That’s our future. 1:14:34

Bruce Nustad: Thank you Mark Dayton. Tom Emmer, your closing comments. 1:14:37

Tom Emmer: Thank you again. Thank you General Mills and all your partners and sponsors, thank you Twin West for having us. And thank you, Senator Dayton, Tom, thank you for allowing me to be part of this. As I said yesterday, it’s an honor and a privilege to be with these gentlemen and present our differences of philosophy where we would take this state. And there is a significant difference of philosophy. And I do appreciate the attention when I get it on how we differ. And I’m sure we’re gonna have a lot more of this in the next 68 days. And we’ll give you a little bit more as we go along but we’ve given you a lot already. And here’s what you need to know. Do we continue business as usual in this state, or do we take a new direction? Now some would say, Well, you’ve had a Republican Governor, you’ve had Democrats in the Legislature, controlling the Legislature for the last six years, how can you say it’s a new direction? Look, the ideas that we’re talking about in this state probably would not have sold eight years ago or four years ago or maybe even two years ago. God bless our current Governor for trying to hold the line in our current Legislature for sticking with what has been this Minnesota Miracle’s model of government from the 1970s. It’s a tax-and-spend model of government. We shouldn’t be pointing fingers, we should be talking about how we got here. Good people with good intentions thought they could make Minnesota a better place. You know what’s happened? We now have a government that is so large it’s literally starving the private economy. We have lost our balance. The future is not just raising taxes. It’s not doing things the way we’ve done them in the past. You can’t say that you’re taxing the wealthy when you’re gonna hit every small business in the state of Minnesota. And take it from somebody who’s been in a small business. I know what that’s like. I know what it’s like to struggle to meet a payroll on Friday and understand that nobody guarantees me the next one, so it’s gonna be two more workin days til Monday. And politicians for years in this state have been talking about “Well I’m gonna raise these taxes and I’m gonna take these and cut these.” It doesn’t work that way. Minnesotans don’t have a lot of trust for politicians anymore. Take it from somebody who’s been outside of government my whole life and been in the state Legislature for the past six years. I think we’re more connected to Main Street than my colleagues. Here’s what people in Minnesota are expecting from their government. They’re expecting their government to take a hard look at itself. Take a hard look at how it delivers services that people expect. Make sure those are done efficiently and then guess what. Put people back in charge of their future, put people back in charge of their opportunities. What I want to be known as is the guy who was part of a group that created the new Minnesota Miracle. The Minnesota Miracle of the 21st Century. That is where you have Medtronic expanding in Minnesota. 3M expanding in Minnesota. You have Marvin Windows expanding in Minnesota. That would be the Minnesota Miracle that we should all strive for. That will bring jobs to the state that our families so desperately need. That will once again drive our economy and pay for the things we expect from government. Thank you for having us here today. 1:17:40

Bruce Nustad: Thank you very much. Let’s give our candidates a round of applause. (audience applause, candidates thank each other) I want to thank each of our candidates for sharing their valuable time to educate the business community and the voters on their positions on so many issues that are important to Minnesotans across this state. Thank you so very much. 1:18:11

 

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