(00:00:00) It's six minutes past 11. Hello and welcome to midday on Minnesota Public Radio. I'm Gary. I'm Mike Mulcahy in for Gary. Eichten. I'm not Gary eichten governor-elect. Tim pawlenty is scheduled to name two more Commissioners this afternoon. Of course, the biggest challenge. The new Administration faces is balancing the state budget polenta has promised to stick by his no new taxes pledge, even though the state has to come up with 356 million dollars by July 1st to balance this fiscal Year's budget and then find a way to plug a 4.2 billion dollar shortfall for the next biennium. So far the early stages of the budget debate of put people into two camps those who say the state has to raise taxes to solve this problem and those who say the state spends too much money and it's time to cut back. We wondered whether there is another way. Is it possible for the state to reform the way it delivers services can Minnesota preserve the quality of service government provides, but cut the cost of providing the service we want to open them. They suggestion box this hour and get your idea our guests to help us sort through this public policy. May is as someone with lots of experience and ideas of his own Kurt Johnson is the former executive director of the Citizens League. He was governor Arne Carlson is chief of staff and formerly the chair of the Metropolitan Council. He's now a senior writer for city the city states group. If you want to join our conversation call us at 6'5 12276 thousand 6512276 thousand if you're listening outside the Twin Cities use our toll-free line. That's one eight hundred two, four two two eight two eight one eight hundred 242. 2828 Kurt Johnson. Thanks for being with us today. My pleasure. Now. First of all, let's just talk put out some budget Basics here the the state spending about twenty seven billion dollars during the current two-year biennium and the big spending items K-12 education. That's about 40% (00:02:06) K12 add colleges and First is to it start adding Healthcare and you got most of the (00:02:12) budget and another area that's gotten a lot of talk is sort of the aid to local governments the property tax Aid which I think it is Oprah times like this (00:02:21) is when we remember that most of what the state does with money is to collect it and pass it around. So it gets redistributed to school districts to counties who largely do things the state tells them to do and two cities and of course that all looks like it's a as speakers Wiggum says all that's on thin ice these (00:02:42) days and we know that governor elect pawlenty is said that he can do this without raising taxes. A lot of people are asking whether that's possible. What do you (00:02:51) think? Well, I I want I'd like to distinguish between what I think will happen and what should happen. Okay. I think the most likely thing to happen is that the new Administration would do exactly what it said it would do it will produce a budget. That will be a pretty ugly picture of what happens. If you make spending cuts the centerpiece of your strategy that will set off week after week of hearings with hand-wringing and organized groups storming. The capital reporters will be treated to story after story about all of the dire and Dreadful things that are going to happen. If in fact anybody had the nerve to actually adopt such a budget and that theater in ritual go on for a long time, then somewhere about the time that the trees begin to sprout leaves this little budget bill will Sprout euphemisms and will find little Revenue increase strategies adorned with surcharge language or blinking on and off fees or pushing stuff off into the future. Not a lot of that left to do shoving stuff toward the agencies who have pricing tools. Like cities who can use the property tax or colleges and universities who can actually raise their tuition all those little things will kind of come together to provide political cover. That's the most likely thing and if that's all we get out of the disturbance and inconvenience of this crisis, it's too (00:04:28) bad. What what should we get out (00:04:30) of it? Well, we ought to use this as an opportunity to ask some of the questions that usually only get debated by a bunch of policy Elites and no one else ever hears about where you start talking about things like like the local government Aid formula mean that's 10% of the problem. We're talking about. All right, five people who could explain the formula to you by which this is done. It's got demographics in it. It's got a modern algorithm in it right away, you know, you're not gonna be able to explain it to anybody but it produces all sorts of funny things just for example You know the city of well 33 big cities get 45% of this whole thing. So we've got big war right away with Minneapolis and st. Paul and Duluth being threatened, but then you look all over the state and there's a scattering of cities of all kinds of sizes involved in this 600 million dollar deal Winona gets nine million of LGA it levees only three million in its local taxpayers. Look at Bloomington Bloomington only gets a hundred and five thousand of this LGA fund. They Levy 30 million dollars on the backs of their taxpayers Duluth, which has the same population size as Bloomington. Gets twenty nine million of the LGA fun. They Levy only nine million from their taxpayers. So as some people might put it this formula is just saturated with grandfather clauses things that were stuck in there for all time and you can't get rid of them as a rule. Maybe this is time to bury grandfather on this program with a proper burial with all due dignity, but then set out to say if we're going to have a formula that assist local governments. We need to Define. What's the state interest in a local budget? One of the things you'd really want to have roughly comparable no matter where people live and there are some things you like courts. Certainly we've said that about schools. But is it Parks do we really want to guarantee the same square footage of Library space and every city the same number of police the same number of parks and recs directors. If the state could Define what its interest is in a local budget and say that's what we will send a proportionate amount of money out for the rest is up to you. You want it you pay (00:06:54) for it. And and if you live in that town and you want it you vote for people you be willing to pay the local tests, (00:07:01) right? And if and if the town comes to a conclusion, you don't like you can move you go someplace that has either higher services and higher taxes or lower services and lower taxes. But as simple as that sound and as sensible as it may appear that would be a revolution for this piece of the Minnesota (00:07:19) budget, isn't it more likely though that the way things turn out politically is that they just sort of roll the problem downhill (00:07:25) and it's well. Yeah, I mean you talked about education the the higher ed part of this budget though. Folks, you know are bracing to get asked to share a big part of this problem. Well, what do we do with that money today? We give 10% of it a little less than 10% to students in the form of financial aid. Ninety percent of it goes to keep really an extraordinary number of post-secondary Institutions going every year. It's nice to have them you can argue the economic development benefit of having them. They're the largest employer in some communities, but it's pretty big for the size state that we have to have that many institutions. Well, do you think that the legislature is going to close any of them not likely is a board going to do it not likely the last time any professional administrator committed. This act was Neils hasselmo with the Waseca campus at the University was probably the last nice moment. He enjoyed as a as an administrative not likely to happen, but what if Under the regime of this crisis. What if we shifted more the money into the pockets of students? And let them choose where to go. Now. What would happen institutions would be forced to raise their prices to make up for the budget shortfall of not getting so much from the state. If you made enough of a shift toward the student financial aid program to guarantee that the low-income kids are not going to get hurt by this proportionately you'd begin to find out which institutions we really need and want we probably over the course of a few years end up with fewer institutions, but the market would have closed them not (00:09:06) politics. So if the students brought the money with them the popular schools would have more money they will be less popular the the school's students didn't want to go to would have less money and eventually it would sort of sort itself out (00:09:18) and some people would say, you know, that's not a good way to decide which institutions to keep on the other hand. What is a good way to decide if we're giving less than ten percent of that money to students today. Is it too big a reform to go for 30? If you got to half you would have a real Revolution. Is that good or bad? We'll never get to talk about this kind of thing when times are good. And there's plenty of money to spread around. Hmm (00:09:46) Kurt Johnson is our guest today and we're opening the midday suggestion box here. If you would like to call in and with ways that you think government could restructure itself to provide all the same level of service about the same level of service for less money Now's the Time to call as Kurt Johnson just said if you're listening in the Twin Cities, our number is six five one two, two seven six thousand 6512276 thousand if you're outside the Twin Cities use the toll-free line one eight hundred two four to Twenty Eight twenty eight one eight hundred two four two. 2828 and Doug is on the line from White Bear Lake Doug. Go ahead. (00:10:25) All right, I guess I've got three points some one. I just don't understand the first point and that is how is it that the government is taking in more money net. New over the next biennium yet. They've managed to outspend themselves by four and a half billion dollars. And in addition to that. My property taxes are going up double digits. I don't understand that. The second point is when you drive along Twin Cities highways and you watch a road crew the other day. I watched a road crew leveling the I don't know the side of the road and there were two people working in 10 watching that's certainly not how I would run a business and at they weren't just watching they were all in their individual trucks. It doesn't didn't make sense to me. Thirdly. I think we should privatize. Some things like handicapped parking spot enforcement same Lane enforcement and let the people at violate those pay for the enforcement of it as opposed to waste precious police resources on (00:11:29) them. So sort of some of those nonviolent or more Civic duties of the police could be turned over to private (00:11:38) companies and ideally on the third Point. What you do is you make the first violation $200 the second violation 400 and the third violation mm. And the private company would split it with the state. (00:11:52) Okay. Well, let's run down some of your questions here and thanks for calling (00:11:56) you better. Appreciate it. I think Doug make some good points Mike maybe one of the people that governor-elect pawlenty should consult is the former mayor of Indianapolis Steve Goldsmith who actually had exactly these kinds of propositions on his hands scared everybody to death at first saying we were going to Outsource a lot of things going to contract out even going to privatize this in that he in effect ended up putting things out for bid and the public sector there got its act organized actually win more than half of the bids, but only by changing its ways getting rid of some middle middle management bloat and actually getting the costs down. Everybody's seen that apocryphal scene of the Watchers outnumbering the workers and maybe it happens from time to time but it does make people wonder is this not a good time to ask which of the functions the state does would Better off bid out sourced made a Content made a contract item rather than having employees year-round to do it. I think the toughest thing that Doug brings up though. Is this this Gap that's to me the is perplexing to all of us. I heard the governor elect the other day complaining that that growth was now at a 6.6 percent rate and that was better than it was six months ago some evidence that the recovery is underway, but money's hid it out the door at the rate of 14.4% How in the world can that happen? You get the same bewilderment when you read a story about school districts needing more money and get the 37th paragraph. You see that their property tax revenue is going up by 7% and you know, they got a bump from the state even during bad times in the last legislative session. So you're left wondering how can they be talking about (00:13:43) Cuts? What's going (00:13:45) on? The answer appears to be that? Are spending drivers in the system that are simply racing ahead of the revenue percentages. It's certainly true in the healthcare budget. Right and it appears to be true in the education (00:14:01) budget aren't some of those factors just demographics. I mean you have an aging population more people who need nursing home care (00:14:09) in some cases. Yes. I mean (00:14:11) that's just a tremendously expensive. I know the state has looked into some ways to keep people in their own home and and get care. Is that something the state should be doing more of when faced with a big Revenue problem like this. And is there money there to (00:14:24) be saved? Well, you have to assume there is money to be saved in all sorts of places and that's why you can well imagine what the new Administration is working on now is trying to identify all of those the problem is though even if they add up every good thing they can find this is a bigger number than anybody ever looked at before and it's going to be very hard to make it add up to a Of the four and a half billion that we've been told about doesn't even have inflation in it on the spending side. It does nothing to build back the reserve that's now been depleted from the last sessions actions and there's no real. Hope of getting back to those boomy days of the late 90s and early 2000s because we're discovering now. We were living off of the lucky and smart people who were cashing in their stock profits and we're now in a competition I guess with the state of Oregon for the state's most vulnerable to this volatility and income tax because we are affected by the stock market will what that tells you is it Minnesota's going back to behaving like it has historically more like a value stock not some hot on fire growth stock and we were always kind of a value stock steady slow unspectacular growth and that's where we're headed back. Nothing really wrong with it. Except that. We got used to having more money and enjoying the politics of giving it back to the (00:15:52) folks. All right, let's hear from another caller Joe is on the line from st. Paul Joe. Go ahead, please. (00:15:59) Hi. Yeah, I'm on the road actually and you know, I'm from Maryland originally from Baltimore. We've been here for a couple of years. And one thing I noticed is we had our garbage picked up by, you know, the local government the city picked it up. You know, we got Chief water. They picked up the leaves. We had a lot of services and our taxes are tax basis was much lower and I'm just wondering whether or not if you were to take some of these things which are not private and make them government functions whether or not you by creating a monopoly for the government kind of like the post office you could give more services at a better price because these were all government services in Baltimore and I realize that there's other other issues like, you know quality of life, you know, the schools in Twin Cities are much Better an aggregate than Baltimore but I just felt that we paid far fewer taxes and we had the government performing many more services and I'll hang up and hear the answer off the air. Thanks a lot (00:17:00) guys. Thank you. Well, I don't think there is there is any answer to what Joe brings up except to remind all of us that this is an expensive place to do almost anything maybe take any variable. You want to like the weather mean not very many states have the range of weather temperature that we have that has all sorts of implications for utilities for energy for what happens in the construction and the maintenance of our road system. It's a lot harder here and we as a result of kind of always been a relatively High service and relatively High tax state and even this new Administration is not talking about rolling that back but just finding some way to live within our means the other part of Explanation. I'm sure is that if if there were a way to compare States I'd be willing to bet that Minnesota has the most exquisitely read distributive fiscal system in the country. We move money around in the most complex imaginable ways mostly in the name of fairness, you know Equity trying to make sure that people have what they need, but that means that in these some of these small towns where they're relying on the state's generosity the folks don't even know what things cost. So the good news in what we're about to go through is people are going to find out what things cost because they're going to be asked do they want to pay for it? Here's the fee. What do you say the bad part it is about it is it's going to be more than people are going to be willing to pay in many cases and it will change life as we've (00:18:36) known it. Well are there some obvious targets out there? I mean are there things that government is doing that? It probably just shouldn't be doing that (00:18:45) that's popular to assume but Not easy to make a very authentic list of that. I think you can more easily make a list of places where bureaucracy is stagnant where government practice is stuck in an old way of doing things the commissioner Charley Weaver now about to be chief chief of staff Charley Weaver provides a pretty good exhibit in the streamlining that was done with driver and vehicle services. Now being more customer-oriented getting the product out the door a lot faster than we were used to have used to go and stand in these Dreadful lines and then you'd wait for six weeks. Now you can do it in about a minute and a half on the internet and stuff comes in about a week and they're doing that with fewer people. Now, there must be lots of opportunities to do that just on the administrative side of how government operates. Bad news is it hasn't got that isn't going to add up to any significant percentage of this budget (00:19:52) problem. Hmm. All right, let's hear from another caller Abdul from Minneapolis. Go ahead, please you're on. Midday (00:19:59) High good I mean day. Hi. My name is Abdul and I have concern about the cuts that have been talked about. My concern is the the I'm a people that recently came to this chick with the last 10 years and thinks that brought this estate the workforce of the state and mostly minorities from Africa and other parts of the world where the jobs and the housing and and the group education quality of the state and it seems to me that with the incoming Administration is pharmacist because on things like education that there will be no issue or the funds that are not on the steak instead that every I need every civil and and public services will be vulnerable of this Cuts. I wonder what would happen if we lose our Workforce or if we lose our senior citizens planners because of cuts and all that and then I want to raise the issue which if we can raise taxes on on like has taxation on cold in have their station on like increase taxes on cigarettes and have the license kept teeth that were who do use the back put them back and and the way they were before or do things like temporary taxation within that within the next two years or economy showing it promising that the economy will go and we will be on a the way we wore may be better. Okay, but (00:21:40) let's see if we can address some of that. He's calling for tax increases. Of course Governor pawlenty says That's not going to happen. (00:21:47) That's right. I think that Abdul represents a lot of people who said who would say I can make a list to the things that you could tax. Mmm governor-elect pawlenty visited a school. I think in Winona and the school kids had been figuring out a budget and how to balance it almost anybody can do that. There is however an almost incurable tendency to make a list that doesn't touch yourself too much, you know, tax tax somebody else tax that other thing that I don't use but I think Abdul does bring up another very important point. It's pretty deeply seated in the Minnesota culture that we're not going to hurt schools. And one of the biggest scrambles were going to witness is how in the world you can protect not only the level of funding that schools are getting today, but the fiscal reform the property tax reform that put more of the official bird On the back of the state to actually provide that minimal floor that our constitution is yours and you know without immigrants coming to urban areas of America most cities would have lost population in the last decade a lot of cities did not and the influx of immigrants explains a whole lot of that and they do rely upon plugging into our education system to learn the language in to refine skills and most of them who move here have a very high ethic about not being a drag but being a productive part of this American society so you can well understand Abdul's concerned that maybe all this is going to get cut and this door that looked open is going to get slammed in a lot of people's faces. I don't think that's going to happen. But some other things are going to go away to (00:23:36) protect it. All right Kurt Johnson is our guest today on midday and we'll have more in just a minute as you consider year-end tax planning will hope you'll think about a contribution to Public radio the year-end gift can reduce your income taxes and at the same time support NPR programming call 1-800 to to 728 11 or visit Minnesota Public Radio dot org for more information and Minnesota Public Radio invites you to the Ninth Annual Twin Cities food and wine experience. You can sample exotic foods from around the world and sip from hundreds of Fine Wines. The event also features a cooking demonstrations and wine Seminars the Twin Cities food and wine experience at the Minneapolis Convention Center runs from January 31st through February 2nd tickets purchased at Lawns and Byerly's include a complimentary set of riedle wine glasses MPR members receive a three dollar discount when ordering exhibition Hall tickets online at food wine show.com, and now that we've done that bit of business, it's 29 minutes before the hour Greta Cunningham is here with an update of the latest news Greta. Thanks Mike. Good morning. This just crossed the wire President Bush has named former, New Jersey governor Thomas Kean to head the Timber eleven Commission, of course, Henry Kissinger was due to take that post and has decided not to take that. We'll have more on that story coming up on the news. The White House is continuing to criticize Trent Lott even though it's staying out of possible efforts to replace him as Senate GOP leader. Spokesman Ari Fleischer is calling Lots recent comments that suggests its sympathy for segregation quote offensive and repugnant lot is making an appearance on Black Entertainment Television today to discuss his remarks u.s. Democratic. Senator. Joseph Lieberman says, he needs some time to consider what he calls an awesome opportunity Lieberman spoke to reporters on Capitol Hill today and said, he's considering whether to run for president in 2004 Lieberman was Al Gore's running mate in 2000 and has said he wouldn't run if Corps decided to seek the Democratic nomination, but last night Gore announced he won't seek the White House in 2004. Lieberman says he'll talk to his family and friends before making a decision and announcing his plans the buses trains and Subways are To run in New York City today as top negotiators for Transit workers and management resume their talks. They're focusing on wages. The transit workers have temporarily suspended. They're threatened strike flood watches and winter storm warnings continue in Northern California. But region is seeing a mixture of rain wind and snow weekend storms brought heavy rains and winds reaching 100 miles per hour in Regional news. Governor-elect. Tim pawlenty will name to appointments to his cabinet today plenty has already appointed his finance and Human Services Commissioners transition Chief Charley Weaver says pawlenty is actively seeking applicants from the private sector Weaver says one of today's appointments is a woman who's leaving a private sector job the forecast for Minnesota today calls for Cloudy Skies Statewide. Some occasional snow is possible in the west with accumulation of around an inch. There is a chance of some light snow developing in central Minnesota sometime this afternoon and highs today will range from 25 to 35 degrees right now in Duluth. It's clouding and 21 Rochester reports cloudy. Eyes and 22 degrees and in the Twin Cities Cloudy Skies a temperature of 23 degrees Mike. That's a look at the latest news. Thanks Greta. You're listening to midday on Minnesota Public Radio. I'm Mike Mulcahy sitting in today for Gary eichten. And our guest is Kurt Johnson were talking about the state budget and the 4.5 billion dollar shortfall the state faces talking about whether there are ways to improve the way we provide services and try to save some money by getting things done. Maybe about the same they are now maybe a little less than they are now without causing a great deal of pain and living within that within that Revenue that we're getting if you want to join the conversation six five one two, two seven six thousand is the number to call if you're in the Twin Cities 6512276 thousand outside the metro area call toll-free 1-800 to for to 2828 one eight hundred two, four two two eight two eight months go right back to the telephone. Rebecca is on the line from a Township. Hello, Rebecca. (00:27:46) Hi. Hi. I was just calling first to as you talking about cuts and everything. You know, I think we're all operating on a premise of the government is bad and I don't know that it's necessarily true because I think it provides quality of life for us the conversation that we're not having that I don't think we're having is what are the values of minnesotans? I think they've always been strong education and the environment and education meaning k12 and higher ed. It's made of strong as a state and cutting higher ed is not going to do it any favors. The other piece is that property tax piece of everything is going to get pushed to the property tax level. It's going to really hurt people on fixed incomes and we have many and it's not as simple as I'm picking up and moving out of their area. We're not Mississippi and I don't want to pretend like we should be we need to maintain our Minnesota values. And that's it. Thank you. Okay. Thanks Rebecca. (00:28:34) That's I think Rebecca is the quintessential Minnesotan prepared probably to pay whatever it takes to keep the kind of system going that we have but that doesn't mean that there isn't some waste in the way we were doing things and it doesn't mean we might not get a more powerful result out of reorganizing the way we do some things which is the Great Value in both the crisis and the promise that the new governor has made not to Simply raise the price of government to the people to fill in the Gap but to ask some pretty tough questions about what are the Alternatives here. And as I said before the The only way we get a bad outcome here is if we go through this period of theater and ritual and then just end up kind of masking the differences and adding a little bit here and here and patching and fixing we really ought to use it to rethink. How do we express these values that minnesotans whole like Rebecca, but get results that everybody feels like you is worth paying for. (00:29:40) Well, let's let's talk a little bit about the K-12 area because that I don't think somebody pointed out nobody ran for re-election this time in the legislature proposing to cut money for education. In fact, most people said they wanted to spend more on education, right and that now there's no more to spend Tim pawlenty says, let's hold education harmless. Well, that's 40% of the budget and then the finance commissioner designate Dan McElroy came in and said no what he means is hold harmless the money going into the classroom. (00:30:11) So what does that mean? Well, this gives us something that's a maybe a whole other hour show but I don't think there's any question in the minds of most people that school districts could use more money than they've got. I don't know too many people who think that school administrators waste money or the teachers aren't a good buy. On the other hand, we're dealing here with a system that's having trouble delivering results when this new federal law whatever you may think of it the No Child Left Behind really gets into full implementation. A lot of Minnesota schools aren't going to look as good as we thought they did once we start looking at some very tough comparisons about the percentages of kids that aren't even making it to the minimum. I mean look at what just the report just a couple of days ago in which we finally had the courage to move the math test for teachers from the level of Mississippi all the way up almost to Arkansas's level the mean it's worth taking a look at what we're doing and there's a whole school of thought emerging in Minnesota and you got to remember that. This is a place that has provided the nation with a lot of policy innovation in the last 15 years or so. This is the place the that started talking about choice. First in the mid-80s. This is the first place to allow the high school kids to go on to college at the same time and get credit in both directions. This is really the place that the standards movement kind of began and it's the birthplace of charter schools. Will what's next. Well, there's a there's a growing body of thought in this state that maybe we can't get the schools. We need by fixing the ones we have. And that what we need to do is to allow even more Innovation allow teachers to start schools allow teachers to own schools. Not not cut off the money to the ones we've got it's like a large army and we will feed it and we need it but that we need to continue down this Innovation track which gets you out of the Trap of thinking that the only way to make education better to spend more money on it if that's where the conversation inexorably goes. If somebody doesn't say wait a minute let's talk about how can we get substantially better results than we're getting today particularly for the kids who are failing and falling through the cracks. Let me ask you (00:32:42) about another school of thought which is that the state spends about 40 percent of its budget now on that K12 chunk, but only about 2% on sort of the Early Education and you know when you go into a school and you try to work with kids who aren't doing well it almost Seems that it's because they aren't red to when they're little when they're at home that their families they're coming from don't have that sort of learning or reading as a value. Would it make some sense for the state to transfer some of the money? It's currently spending on k12 and and try to get to those kids more early and would that save money in the long (00:33:22) run? Well, it would certainly seem to be sensible to front-load where there's some evidence that you do get a different result. And there there's a lot of research around showing that the investment in those early years does pay off if in if that early childhood education is really education. I think part of the difficulty is that there isn't real a real consensus about what the program ought to be. You know, some people think that Head Start is the same thing as that in the Head Start people say wait a minute. We don't do education, you know, we do preparation for habits to get into school. However, they describe it. We don't have a Just about that at this point but one thing is for sure at the other end. We're reaping the Harvest of failure ask somebody in a college or university what percentage of the freshman class is in effect taking stuff. They didn't do in high school growing part of the college curriculum is what is euphemistically called remedial education where people are trying to get enough math in enough communication skills to handle the first college level course. So something needs to be better front-loaded than it is today. The incentives aren't working. Hmm (00:34:36) Kurt Johnson is our guest he is has a long resume a former executive director of the Citizens League worked as Governor Arne Carlson is Chief of Staff chaired. The Metropolitan council is now a senior writer for the city-state's group and we're taking your calls and questions as well. Let's take another call Tom is on the line from Coon Rapids Tom. Go ahead. (00:34:58) Thanks for taking my call. One of the previous callers talked about Way workers and them standing around and it sort of triggered the thought in my mind that most of the highway construction workers are actually private contractors misleading up leads on to a couple of other interrelated points. Probably the biggest one is that government and business are fundamentally different and what their purpose is and that governments provide services for the constituents and that businesses are there to make a profit and the profit motive does not necessarily guarantee efficiency. It simply means that there's one dollar more coming in than going out. My concern is that with the move to increasingly privatized government services, it would not guarantee efficiency and lower taxes, but really would necessarily add an extra level of government bureaucracy. Just to keep the contractors honest. Good (00:35:47) question. Well, what about Thomas he makes a good point the people who've had the best experience in government at Contracting out for things of the ones that have taken the approach of saying we have to decide first. What it is we want. What are the goals here if you don't know what the goals are you're not going to get any more efficiency and no more Effectiveness out of Contracting out then just letting a full-time staff. Do it inside the wall of government. So mean there is that experience to draw on the difference between the public and the private sectors on this. I mean, the private sector still does run on a profit motive. You don't make enough of it you are going to go away. Government doesn't go away. But the government equivalent of that profit is something called credibility and if government is not operating in a way that makes sense to the people paying the bills that instills faith that your money is being used wisely in the services that are being provided and the policies that are being made make sense and do good. You lose that credibility. You're just as much trouble as a private business that can't make a profit. (00:36:59) All right, let's take another caller Frank is on the line from a Moorhead Frank. Go ahead please (00:37:05) here's some quick thoughts II was a ambitious working person till I was 47 and I had I lost a business and and I had to quit being a productive person because the Ada is so impossible to access. And so finally I had to go on services and now the good taxpayers are paying social security for me and all these other expenses because I was finally told by lawyers. You need to quit working. You're just this just isn't working. So that's two things what the Ada doesn't work. Number two. Now taxpayers are paying for me. I didn't want to quit working. I've tried for five years to get an appeal to Governor to the governor of Minnesota and can't get past his Commissioners. The next thing is the forms. There's a form in Minnesota called the combined application form for cash assistance food stamps and Healthcare. They all use the same form. I don't know how many times a year. I have to go in and completely fill out the same form in the same office with the same case worker for different programs. And and I have no changes in my situation. It's just a total waste and then because they have to do this so many times the workers make mistakes and I figured as a business guy thinks that at least 3 hours of people's time taxpayers time is wasted every time a case worker makes a mistake and if a person is out here trying to work and Beyond any of these Services, they can't do it because they have to go to the office so many times and fill out these forms. And the final thing is if every case worker in the social services system in Minnesota had to send a hand-signed apology to a client when they make a stupid mistake, we'd be amazed at how many millions of those letters would go out and I think something would change. That's all I (00:38:50) got. Okay. Thanks Frank, you know Frank's story reminds me of something that happened. Me a long time ago when I first came to Minnesota and was a young college President in the community college system then and I was amazed at some of the rigmarole you had to go through in the forms you had to fill out in the steps bureaucratically had to do for what struck me to be something straightforward and simple and a wise state official took me aside. The first six months I lived here and said you need to understand something about state government 90% of it is organized to try to prevent fraud. And it is a kind of cumulatively risk-averse culture government people get in the most trouble by making mistakes and the mistakes become embarrassments the embarrassments lead to political difficulty. And so you've got this layer after layer of procedures and forms and checklist all really kind of to try to make sure people don't do something illegal. Don't misbehave in bad ways and so forth that is pretty bewildering to somebody that's trying to use a system and thinks of himself as a customer. He does bring up something else though that I think is important to this debate. How much of the cost is excessive regulation whether we're talking about what the state imposes on its own nursing home industry, for example, or what the state imposes on K12 school districts mean how many little things when you add them all up turn into have large dollar cost may be one of the things that the Dozen or fifteen states that have the most severe difficulty with this ought to do is gang up on Washington and say it's about time for you guys to pay for what you order us to do. So if you're ordering all this testing through the No Child Left Behind Act pay for it, if you're ordering a certain level of Medicaid expenditures for people who can't afford their own Healthcare pay for it. If you're ordering all these things having to do with nursing homes that strike most sensible people maybe is going to much too far. I mean things like saying you got to Have several weeks of training before you could assist somebody in a feeding process. Even if you're a relative when you talk to the folks in that industry, you hear story after story that makes Frank's anecdote seem mile. Well, maybe it's a good time to have the state's gang up on Washington and say you start paying for the stuff that you caused us to have to do (00:41:28) we're talking about how to make Minnesota state government work a little better work a little more efficiently. If you're listening in the Twin Cities and would like to join the conversation. The number to call is six-five 12276 thousand 6512276 thousand if you're outside the Twin Cities call toll-free 1-800-221-9460 2828, you know, just talking about all the bureaucracy and forms and regulations. It does remind you that Health Care spending seems to be driving a lot of this the expenses both for the state to fur government and in the private. Sector where we've seen, you know doubled the return of double-digit increases in health care premiums is it time to look at a national fix for healthcare again, or is that the the political Waters just too spoiled from from the last (00:42:22) tribe? Well, a national fix would certainly seem to be desirable but I don't think anybody's heard yet a national fix that attracts anything close to a consensus. I mean this has to be the only thing in our society which in terms of its economics exceeds the absurdity of the way the American airline industry runs, we Healthcare economics are on their face kind of absurd imagine if you and I were told that we could sign up for this program and then we could as we were hungry decide to go out and eat at restaurants, but we get to pick the restaurants we go to we can sign and be a club of an expensive one or a fast food or whatever and we're going to send the bill to somebody else. And they've got to Bear the risk for whatever we run up in a food tab. That's kind of what we do with this and because there was this cultural backlash against managed care you now have had a shift back toward the preeminence of the patient being able to choose the provider. I want to be able to get the doctor. I want to get at the place. I want to get him and it's a pogo deal. I mean the enemy is us we are overusing the system. We may be causing more actual Health Care Problems by seeking care. We don't need then we have problems with people not getting enough but we really do use the system and if you're going to use a system the costs are going to go up and they are going up at a multiple of inflation these days. (00:43:58) All right, let's take another caller. Jim is on the line from Lakefield Jim. Go ahead. (00:44:03) Hello. My name is Jim. I'm from Lakefield, Minnesota down here and I was in calling in regards to your solution for supplement money to local governments as you explained earlier Duluth gets nine million yet. They get another 29 million. I live in a small town where we get about Ray's 600,000 from our own taxes and an additional probably five-and-a-half 550,000 coming in from state government to assist with that now recently that's been shrinking. How would you go about making everything fair and equal all the way down to individual job levels? For example, right now? We have Personnel that are probably getting paid the equivalent of another person of the exact same job and they're getting in a population that has twice as many people see what I'm saying. How do we go about allowing larger government to come in to the local government to control such a thing yet not have it. So overbearing that it does take away from the quality because you know, people are inherently in my person, you know, kind of greedy so they're always going to want the bigger Buck but how do we get them to take a job in a smaller town and still do a really good job? That's thank you. Well, it's a tough (00:45:23) issue Jim. I don't know that anybody has an answer to that. Some towns are probably not going to make it through another decade or two just because they just don't have enough economic viability to support them, but it's always been the Minnesota way to give every Community every chance we can and to be fair and try to distribute assistance according to ability to pay. But these are times in which those values are going to collide with reality and there just is not going to be enough money to perpetuate the system. We've got and not merely nobody can explain to you the way the formula actually works you'd like to believe it. It's all proportionate and all based on Equity. But when you get really close to it, you find there all sorts of little quirks to it. And now we got a new Finance commissioner representative Dan McIlroy who hails from Burnsville that has a history of getting very little local government. Aid and is always on the contributing end of the regional tax base sharing program. So in Den mcilroy's heart there probably is beating the Minnesota fairness impulse, but in his head I'll bet he's thinking, you know, the rest of the communities can live just like, Burnsville. (00:46:48) And even beyond their own even if you eliminated all the dollars spent on local government AIDS, so it wouldn't solve this 4.5 billion dollar problem. (00:46:57) No, and there's a think I think it's a speakers find a saying if you want to solve it. You got to think about big numbers you'd have to raise the sales tax to nearly 10% You'd have to put a 37 percent surcharge on the income tax all things that are politically Unthinkable. So while we all want to talk about this in and have our favorite approaches the thing people probably should remember is that this thing is so big That it's going to require us to do things. We have never done before. And we can either decide to be positive about that and be confident and get the best result possible or we can just go in and fight with each other and let the most powerful people in the fight. Hmm. (00:47:46) Let's hear from another caller. Jack is on the line from Richfield Jack. Go ahead. (00:47:50) I think the thanks for taking my call. This is kind of a micro Crescent versus the macro issue that you guys are talking about. But a friend of mine had worked for a moose like institution and Moose Lake was being closed down it was being turned into a prison and he worked for the state and he transferred to a different job in the st. Paul and the process though the state picked up his closing costs all this moving costs. So the state picked up about $10,000 worth of costs. Now, I know a couple of other people at the state who have moved around the state from job to job when they get bumped and what I'd like to know is if this type of movement as common and just how much Does that cost us when state employees move and from different town to town? Thank you. (00:48:39) Probably not four and a half billion (00:48:40) dollars. No and while none of us here would pretend to know what those policies are agency to agency. I think it's a fair generalization that benefits for state workers are pretty good. They're more than comparable compared with the private sector the theories always been that you're not going to get rich being a state worker and the salaries are not ever going to be as high as you'd get in the private sector. So you need this floor of generous benefits underneath it. It will be an interesting cultural question though in a state that's lost tens of thousands of jobs over the last two or three years in which almost everybody knows somebody who's been laid off in the private sector and nearly everybody in the private sector has seen their wages Frozen and their bonuses disappear. Will public workers decide to join culturally what the rest of us are going through if wage freezes are proposed. Will they consent like good soldiers or will they scream and say no not us not now, not ever it'll be interesting. I don't think we should prejudge that as people begin to get their arms around. Just how big a problem is is. (00:49:54) All right. Let's take another call from Jim and saying Cloud Jim. Go ahead. You're on midday (00:50:00) High. I was just wanting to ask our guest how prudent is it for someone in the campaign position such as Governor pawlenty to make or governor-elect pawlenty to make a promise. I will not raise taxes. I've just heard of more people being elected getting burned later once they're elected having to renege on promises that were just unreasonable. I'd like to hear our guesses are unrealistic, and I'd like to hear I guess comments on that. (00:50:26) Well, you're just you're just getting one man's opinion here, but Like what we witnessed in what was a tough and unprecedented gubernatorial campaign. Was that the man who won found the message that resonated with the most voters. He conducted an effective campaign as a communicator from beginning to end including the one stumble that he made coming out of that with style and dignity. He is the kind of person who if he makes a promise he is going to try to keep it. And you can you can see well it was irresponsible to say it and I could easily imagine getting the forecast a couple of weeks ago him throwing up his hands and saying, oh my God. Nobody told me it was this bad and wanting to get out of the promise, but I don't think he does there's every indication that he sees this as an opportunity to think about a third way not just cutting spending and not raising taxes, but finding a way for government to do what it needs to do for people without seeing the rate of spending go up as fast as it is today that makes it potentially a very interesting and constructive time for us. If we if we will take that seriously. All (00:51:43) right, just a couple minutes left. Let's see if we can get to at least one more caller Maryland from st. Paul (00:51:48) Merrill. Yes. Thank you for taking my call. The you worked for Arne Carlson when he did a massive core study, which actually cost more than a million dollars. And the promise was that this money was all going to be recouped with the massive organization and better delivery of services and really nothing much came out of it why (00:52:14) the simple and short answer is we got rich and didn't need to hmm. There was also the Brandel Weber study at the same time thinking through all the ways in which we ought to contemplate reforming and restructuring government. The Citizens League did a big study not long after the American experiment organization did another study we've got plenty of material and lots of analysis waiting. We just we got rich fat and happy and got more joy out of giving money back to taxpayers been thinking about changing the way government (00:52:47) operates. So in other words, there was a stock market bubble and politicians do with politicians do (00:52:53) exactly. I mean, there it is worth going back to that report and looking at it but not much of it was implemented. (00:53:01) Just in the minute or so we have left. How do you see this working out? Do you think there will be some real reform or is it going to be sort of a mixture of spending cuts and tax increases that might traditionally be expected. Well the cynic in (00:53:17) me worries that we will get shifts sleight-of-hand backtracking circumventing all the various Maneuvers that you can imagine, but I think it's dangerous to presuppose that because the magnitude of this Gap is the sort of thing that is more likely to be chronic than short-lived and we almost have an obligation (00:53:44) to spend the time and the political (00:53:46) Capital to find a way to do what the values of minnesotans compel us to do but not spend as much as we have historically spent and that's going to take a lot of work and in the end is going to take some political courage, but this is one of those once in a generation Opportunities to do it (00:54:03) Kurt Johnson. Thanks so much for being with us. Today Kurt Johnson is a former director of the Citizens League former Chief of Staff for governor. Arne Carlson chair of the Met Council currently a senior writer for the city-state's group and thanks everyone who called in with questions and comments as well. The Metropolitan airports commission looks at ways to save money. I'm Kathy Wars ER that story and part 2 of our series on the legacy of the Ventura Administration tomorrow on Morning Edition here on Minnesota Public Radio, Canada. Will you FM 91.1 you're listening to Minnesota Public Radio? It's cloudy and 23 degrees at KN o w FM 91.1 Minneapolis st. Paul Twin Cities weather for today cloudy blustery a high. Oh just around 30 degrees tonight cloudy with some snow flurries and lows in the upper teens, the driving could get a little difficult tomorrow and tomorrow night as we get a chance of Light freezing rain or snow moving in.