Bluestem Prairie

Gruenhagen gone wild: Glenn offers summer fiction pick to constituents

Unlike Gretchen Hoffman and her intern, I didn't attend colleges where professors said money was bad. Hence, I'm happy when people are able to pay me for writing; one of my freelance posts has appeared at the Minnesota Independent, Gruenhagen recommends questionable story on tax hike refugees to constituents:

Minnesota Representative Glenn Gruenhagen sent his constituents his weekly email newsletter Tuesday, cautioning them to purchase fishing licenses  now in advance of the looming likelihood of  a state government shutdown.

However, the Sibley County legislator was not content to leave it at that practical level, and concluded with a recommendation for a little summer reading:

I still hope we can find a breakthrough with the budget in time to avert a shutdown and I will keep you posted as things develop. I did come across an interesting Wall Street Journal article that shows how Gov. Dayton’s “tax the rich” plan has backfired elsewhere. Here is the link: http://online.wsj.com/article/SB124329282377252471.html.

The URL links to a May 2009 Wall Street Journal article, “Millionaires Go Missing: Maryland’s fleeced taxpayers fight back.”

However, his constituents may wish to consider whether the reading is beach-ready as commentary or as fiction.  Though the Wall Street Journal article is an article of faith among those advocating an anti-tax-the-rich agenda,  the liberal-leaning Institute on Taxation and Economic Policy suggested in 2009 that the millionaires hadn’t moved to a new state, but rather to a different tax bracket...

Read the whole thing over at MNIndy. And check out the articles.

For reading at the beach (if it's open) this weekend, Bluestem recommends Middlemarch, Stars in My Pocket Like Grains of Sand, or anything by the late Bruce Chatwin. Much more fun than the Journal's staid economic fictions. Tell not a half-truth, but a truth and a half.

Walz to host budget town halls in Rochester and Winona

Congressman Tim Walz asks southern Minnesotans to join him in Rochester and Winona on Monday, June 27th for town halls on the federal deficit.

The Winona Daily News reports in Help Walz tame the budget at town hall:

U.S. Rep. Tim Walz, D-Minn., will host a town hall meeting Monday in Winona with the hope that some locals can offer a few ideas to help elected officials in Washington, D.C., find ways to reduce the national deficit.

Walz will be joined by Sara Imhof, a representative from the Concord Coalition, a nonpartisan organization that aims to educate citizens on issues surrounding federal budget deficits.

Imhof will lead attendees in a workshop that will give them a chance to discuss the current deficit in small groups and come up with potential solutions to present to Walz.

The idea behind Monday's workshop isn't necessarily that a small group of Winonans will singlehandedly balance the country's budget. Rather, it's a creative way for constituents to offer Walz feedback.

Update: The Rochester Post Bulletin has now posted info about the  early afternonn  town hall in the Med City : Walz to hold deficit town hall meetings Monday. [end update]

Deets from the press release:

RSVP appreciated by phone at 507-206-0643 or at www.walz.house.gov.

These town halls are open to the press and public. A representative from the non-partisan fiscal-watchdog group the Concord Coalition will be on hand to work with participants during the hands-on budgeting activity.

Monday, June 27th

12:30-2:30pm
Rochester Community and Technical College
3rd Floor College Center (CC 300)
851 30th Ave SE
Rochester, MN 55904-4999

5:30-7:30pm
Winona State University
Kryzsko Commons, East Hall
Huff & 10th Streets
Winona, Minnesota

Whatever the game may be, Parry borrows tax refugee fear talk from Glencoe Glenn Gruenhagen

Back in May, Bluestem caught Glenn Gruenhagen going wild with some talk about tax refugees when it posted Glenn gone wild: Gruenhagen's baseless talking point about tax refugees fleeing OR & MD.

Today, I opened the online version of the Austin Herald to discover that Suddenly Socialist Mike "I Have Needs" Parry has picked up Gruenhagen's baseless talking point and taken it on a royal pilgrimage across Southern Minnesota.

There's also a wonderfully scrambled sports metaphor, in which Parry says the ball is in Dayton's court, while also being placed on the fifty-yard line by Brodkorb's caucus. If the needy state senator figures out what the game is, perhaps someone will let the governor know.

His visitation with the citizenry of Spamtown is commemorated in GOP’s Parry: Dayton’s move, as well as with a marvelous photo that begs for 'shopping by the Divine Tild. We learn that Parry won't raise taxes on the wealthy:

Parry said the conservative majority was not willing to compromise to the point of raising taxes for the top two percent of earners in the state, particularly because that tax strategy has backfired in other states.

“What the governor wants is a 2 percent increase on the highest wage earners,” Parry said. “Maryland raised taxes on the upper income earners in 2008, and they had a 30 percent decrease in their tax returns in that bracket.

“The wealthiest can move their money wherever they want to.”

Since the Republicans have decided that recycling talking points, regardless how debunked, is the game plan (whatever the game may be), Bluestem will go back to the debunking cited in the May post.

Over at BlueOregon, Executive director of the Oregon Center for Public Policy Chuck Sheketoff noted in Facts Go Missing: The Unsubstantiated Tale of the Fleeing Maryland Millionaire:

. . .Instead of circulating stories founded on supposition, the Senate Republican Office would do better to distribute the analysis by the Institute on Taxation and Economic Policy (ITEP),Where Have All of Maryland’s Millionaires Gone? Nowhere – They’re Probably Just Not Millionaires Anymore. (PDF).

ITEP examined the preliminary tax return data released by the Maryland comptroller — who acknowledged that not all the data is in yet, particularly for high-income earners — and found that the data fail to support the Wall Street Journal’s claim:

[A]s a result of legislation enacted in 2007 and in 2008, income tax rates for affluent Marylanders were higher this past year, not just for residents with taxable incomes over $1 million, but for individuals with taxable incomes above $150,000 and for families with incomes over $200,000. Consequently, if it is the case that wealthier taxpayers respond to changes in income tax liability by changing their state of residence, one would expect to see that response not just for taxpayers with incomes above $1 million, but, to some degree, among all affected taxpayers. The Comptroller’s preliminary data suggest that this is not the case.

With the exception of “millionaires”, the number of returns in the affected ranges of taxable income appears to have grown between 2007 and 2008. Given recent economic events – and, in particular, the widely-anticipated decline in income from capital gains, which are received almost exclusively by the very wealthiest residents of each state – a far more likely explanation for the alleged disappearance of Maryland’s millionaires is that, for 2008 at least, they are no longer millionaires. Instead, their incomes may now fall in lower ranges of the distribution, thus potentially accounting for some portion of the increase in the number of returns in those ranges.

In other words, analysis of the preliminary data from Maryland fails to support the assertion that a tax increase on the wealthy will cause them to flee.

And that's just Maryland; Sheketoff takes a look at claims about tax refugees from other states Parry doesn't specifically mention, deftly dismissing them.

Over at Across the Great Divide, Charlie Quimby suggest that you Don't Look to Rich or Business for Salvation. He writes:

For years, Growth & Justice has been looking for and failing to find strong evidence that Minnesota is losing jobs, wealthy residents and businesses due to corporate and personal income tax rates.

Just last month, the Council on State Taxation, an association made up largely of corporate tax attorneys, released a study [PDF] by Ernst and Young that says differences in tax rates are not a main factor influencing businesses to build or hire in one state over another — and that Minnesota ranks 10th best in terms of the competitiveness of our investment tax climate.

Despite this — and absent more than anecdotal evidence of business flight — political figures, business executives and their hired guns always come back with the same line: Higher state tax rates kill jobs and drive job creators and wealth out of Minnesota. . . .

Check out his analysis of the business version of Parry's broader claim, while Bluestem waits for Parry to settle on a single unified sports analogy.

Bleg: Like what you're reading? Throw a few coins in Bluestem's tip jar for the blog's June reader support drive. Need more information? Read all about it here.

Photo: Scary Parry trying to get a grip on something. Photo by Matt Peterson at the Austin Herald.

Related post: Glenn gone wild: Gruenhagen's baseless talking point about tax refugees fleeing OR & MD.

Guest post: Minnesota needs a fair economy where the richest pay their fair share

Guest commentary

by Terry VanDerPol

My name is Terry VanDerPol. I farm in the western part of the state in the Minnesota River Valley outside of Granite Falls. I raise cattle and I’m a member of Land Stewardship Project.

I am here to say that we can have a society that provides healthcare for all, quality education for all, healthy land, clean water, nutritious food for all. We can have profitable family farms and robust rural communities and cities. But we’ll never get there if the corporations, the HMOs and the rich don’t pay their fair share.

Family farmers are less likely to have health insurance coverage than most Minnesotans and when they can get it, they pay a lot more for it. Why? Because HMOs care a hell of a lot more about profits than they do about people. They are holding a half of a billion dollars in excess reserves that we need to claw back into the state treasury. It’s our money. The money is there; let’s use it for care!

I come from a part of the state that remembers the robber barons of the 19th and 20th centuries, the banks, railroads, grain traders and oil companies who picked the winners and losers and amassed huge personal fortunes on the backs of Minnesotans.

I come from a part of the state that remembers farmers and laborers uniting to take down the barons and build this state into a place that invests in people and communities. I graduated from a school in a small, rural town with an education that was the same high quality as any kid got in the wealthiest district in the state. That school district now operates on a four-day-a-week schedule.

I come from a part of the state that knows that that when we invest in our workers, invest in our schools, invest in our health programs, invest in our transportation systems and invest in our environment, that everyone benefits and that everyone should pay their fair share.

I come from a part of the state that knows that way forward is to organize, to stand together to take back our power from the big banks, the HMOs, and the food & agribusiness giants that are pillaging our state and tell the richest 2% to pay their share to avoid deep cuts that kill jobs and will hurt all of us.

But now, the corporations and the rich pay a smaller part of their income in taxes than you and I do and they want to pay even less! They want to defund everything that makes this a great state, and leave us begging for low paying, no benefit, dead-end jobs! Enough is enough! I’m here with you today to collect on a bill that’s way past due! Big banks, big retailers, big agribiz, it’s time to pay up!

Terry VanDerPol is a western Minnesota cattle farmer and member of Land Stewardship Project. This speech was given in the Minnesota State Capitol Rotunda on May 21, 2011 at the Rally for A Fair Economy. This post first appeared on Take Action MN's blog and appear here with permission.

Photo: Western Minnesota beef farmer Terry VanDerPol leads a Farm Beginnings field day on soil monitoring. via LSP.

What did Torrey Westrom think he was saving with private prison proposal?

Representative Torrey Westrom has been pushing bills for using private prisons for years--witness this 2009 press release that cites research by an ideological think tank --as a cost-saving measure. As the Star Tribune reported back in March in Push for private prisons draws fire, he's been at it again this year.

Today's New York Times reports that contracts with private prisons may not actually save public dollars but simply cheery-pick inmates who are less expensive to care for.

In Private Prisons Found to Offer Little in Savings, the NYTimes' Richard Oppel Jr reports:

The conviction that private prisons save money helped drive more than 30 states to turn to them for housing inmates. But Arizona shows that popular wisdom might be wrong: Data there suggest that privately operated prisons can cost more to operate than state-run prisons — even though they often steer clear of the sickest, costliest inmates.

The state’s experience has particular relevance now, as many politicians have promised to ease budget problems by trimming state agencies. Florida and Ohio are planning major shifts toward private prisons, and Arizona is expected to sign deals doubling its private-inmate population.

The measures would be a shot in the arm for an industry that has struggled, in some places, to fill prison beds as the number of inmates nationwide has leveled off. But hopes of big taxpayer benefits might end in disappointment, independent experts say.

“There’s a perception that the private sector is always going to do it more efficiently and less costly,” said Russ Van Vleet, a former co-director of the University of Utah Criminal Justice Center. “But there really isn’t much out there that says that’s correct.”

Such has been the case lately in Arizona. Despite a state law stipulating that private prisons must create “cost savings,” the state’s own data indicate that inmates in private prisons can cost as much as $1,600 more per year, while many cost about the same as they do in state-run prisons.

The research, by the Arizona Department of Corrections, also reveals a murky aspect of private prisons that helps them appear less expensive: They often house only relatively healthy inmates.

Go read the whole article; it's worth it.

Though no specific company or facility is mentioned in Westrom's bill, the only private prison in Minnesota is the now-shuttered Prairie Correctional Facility in Appleton, owned by Corrections Corporation of America. The company is known for its aggressive drafting and lobbying of bills to build its business.

In the Strib coverage of the bill, Kevin Giles reported:

Westrom said it makes sense to use the Appleton prison rather than let it sit empty.

This is curious. Why should the fact that the prison is empty be reason in and of itself to fill it?  It's not empty at government expense; that's a privately owned facility. Perhaps Westrom's hollow reasoning helps underscore the problems with treating prisoners or detainees like any other commodity to be traded in a market. A government mandated market for human bodies? May not be the best illustration of a free market at work.

AFSCME has more at Private Prison Savings Are a Hoax

Photo: The CCA facility in Appleton, via Minnesota Public Radio.

Republicans planning to tax some clothing, raise income tax on some rich people

Minnesota Republicans keep assuring us that they won't raise taxes. Any tax. Those pesky property taxes that might go up as the state retreats from LGA, kicks prisoners into local jails, and passes on other government functions? Meh, the logic goes, local governments can just "spend differently," rather than seek additional revenue.

Indeed, headlines earlier this week noted that GOP legislative leaders plan fly-around to promote 'no-tax increase' stand. When a late snowstorm made flying risky, they prudently postponed the trip until next week, but it will happen.

But there's a Republican bill in the hopper that would tax some clothing and high wage earners.

The Star Tribune reports in T-shirts could aid Vikings' stadium bid:

That Vikings jersey, Twins cap or Wild poster on the sales rack could play a bigger role than you think in helping to pay for a new Vikings stadium.

A 10 percent tax on wholesale sales of sports memorabilia -- including anything sold in Minnesota licensed by any pro sports team or league, not just the NFL -- would provide most of the state funding share called for in a stadium bill, according to a study by the Revenue Department. . . .

That would be followed by:

• $7.8 million from a 5 percent surcharge on the income that Vikings players and their opponents make when playing in the new stadium . . .

• $1.39 million from a 6.5 percent sales tax on direct satellite TV services, including DVR; . .. .

The memorabilia tax would be collected not just on items licensed by NFL football, but also the International Federation of Association Football and the Football Association. Not to mention Major League Baseball, the NHL, the NBA, NASCAR, Major League Soccer and World Wrestling Entertainment.

The 5 percent income tax surcharge would apply to any sports team employee who makes at least $250,000 a year. Most of those would be players, but some Vikings executives and their opposite numbers on other teams could be taxed as well for stadium work time.

This is curious logic from the no-new-taxes crowd. Apparently, it's okay to go to high-income people working in an industry which gains from a structure to be built with public assistance, and tax clothing that is licensed by an entire ndustry.

And even that last one is a stretch, since it lumps WWE into "sports" when the company itself thinks of itself as entertainment. Moreover, NASCAR will never be a stadium sport, regardless of how many left turns those athletic drivers take. It's hard to see why WWE and NASCAR fans should pay a tax on their t-shirts in a state where clothing isn't taxed.

Moreover, the added surcharge on high-income earners in the football industry seems hypocritical coming from members of a political party that objects to surcharges on income taxes for other high wage earners working in any other industry. 

The logic behind the surcharge is no different from that advanced by progressives who advocate a surcharge on all high-income earners during times when more revenue is needed: to those to whom much is given, much will be demanded.

On the other hand, perhaps this model can be adopted for funding government needs that benefit other industries. Senator stadium author Julie Rosen's ex-husband makes a great deal of money in the meat-packing industry, as do executives who work for Hormel and Cargill. Let's slap a personal income tax surcharge on their salaries to fund the Minnesota Department of Agriculture. Ditto with the health care and health insurance industry. The revenue on high-earners could be dedicated to the state HHS.

Drawn a big check from a firm that builds roads? Income tax surcharge for construction company CEOs.

Why should pro-football players and executives who need a stadium be singled out for this class warfare? Why should sports fans alone have to pay sales tax on t-shirts?

How are new taxes not new taxes? Why is the logic of these new taxes acceptable only for a stadium--and not for other spending by the State of Minnesota? If Tony Sutton and his party object to new taxes--especially for what they call "wants" rather than "needs--how are these new taxes,including an income tax surcharge targeting "the rich," suddenly okay to solving a revenue shortfall?

Sutton wrote earlier this year:

"Please resist any “revenue enhancement” proposals like raising taxes, raising fees, expanding gambling, expanding the sales tax, or any other such schemes that not only violate our principles, but are also bad politics and bad public policy," Sutton wrote in a Feb. 14 letter to legislators.

"The challenge will be to overcome and resist the tremendous pressure by outside special interests who will want you to compromise on the principles that got you elected in order to “find revenue” (i.e. raise taxes, raise fees, expand gambling, etc.) to “invest” in big government," he wrote. "You cannot espouse limited government on one hand, while looking to find new sources of revenue on the other."

Why is this "want" a special exception to Republican principles, and not other "wants" (and even "needs" like incarcerating short-term prisoners in state corrections institutions)? What makes this "investment" different from those in higher education?

Ilustration: The proposed Vikes stadium. None dare call it class warfare if the income tax surcharge is on a defense line.

Greater Minnesota newspapers scold Republican legislature for shifts, gimmicks and raids

Governor Dayton wasn't alone yesterday in calling out legislative Republicans for "shifts, gimmicks and raids" as they seek to balance the budget without admitting a need to increase revenue.

Earlier, the editorial board of the New Ulm Journal, which leans to the right, called them out in Taking money that’s not their own? over a plan to swipe local sales tax money:

Republicans in the Minnesota Legislature are bound and determined that they are not going to raise taxes to balance the state's $5 billion budget deficit.

But apparently they are not averse to taking someone else's tax revenue.

A major transportation funding bill that is makings its way through the GOP-controlled Legislature seems to transfer $69 million in sales tax revenue raised by five metro counties for rail and bus rapid transit to replace some $51 million the state would cut from general fund spending on bus operations.

Now hold on here. This is a sales tax revenue levied in Hennepin, Ramsey, Dakota, Washington and Dakota counties. The money, approved by the county boards in those counties, has been going to the Metropolitan Council for future light rail projects like the Southwest Corridor project.

Since when does the state have the power to grab revenue from other sources of government?

New Ulm levies a half-percent sales tax to pay off the bonds that built the New Ulm Civic Center and several other park and rec facilities expansions. If the state can divert money from the metro counties' sales tax, what's to stop them from diverting our sales tax revenue, too?

Apparently the philosophy of "living within our means" that state Republicans espouse really does mean "our" means, as in your's as well as mine.

I gather those planning this pilfering met with a wall of similar criticism; the Strib reported Republicans on House panel back off transit money fight. However, the article notes it's not over until it's over:

The decision clears the way for the spending bill to reach the House floor next week -- where the issue could surface again.

DFLers had lambasted the diversion of sales tax money that five Twin Cities counties have collected to expand metro mass transit.

Rep. Mindy Greiling, DFL-Roseville, said the provision was "amazingly insulting to our local taxpayers." Rep. Frank Hornstein, DFL-Minneapolis, added, "This is raiding money that the five counties have raised," and said it set a precedent for the state to tap other local tax money to shore up its budget.

The Albert Lea Herald editorialized about a cut in health care spending in Budget plans beat hopes:

. . .The charitable interpretation of the House Republican budget is that it’s a case of hope trumping reality, as opposed to intentional smoke and mirrors. But either way, counting on a waiver from a federal government whose boss, the president, seems committed to health care benefits for the poor and elderly, strikes us as unlikely to bear fruit.

We’ve noted several times this winter that those in control at the Capitol seem unable to put forth a useful plan for erasing the state’s budget deficit. It is, however, still not too late — and Minnesotans must hope that lawmakers have some ideas that are less fanciful and more likely to produce results.

The Republican Party of Minnesota likes to claim it's the party of rural values, but it's not looking like Greater Minnesota feels it's getting value for that premise.

Photo: What are the values of the party led by failed burrito baron Tony Sutton?

More math problems: pension bill Parry pitched "threatens stability of state’s retirement system"

Something isn't adding up for the Republican majority in the Minnesota Senate. The latest wrong answer: a bill that will threaten the stability of Minnesota's pension funds.

I'm hard pressed to tell whether the error in the proofs is located in the calculation that Senator Mike Parry is prime leadership material, or that the STEM initiative needs to be applied retroactively to freshman legislators like Gretchen Hoffman. It's a false choice; both are likely true.

Last week, the Minnesota Senate Majority comm shop--leader by MNGOP deputy chair Michael Brodkorb chivalrously trotted out Sen. Mike Parry to assist Senator Hoffman in the press conference promoting a bill to cut the state contribution to the public employees' pension, while raising their contribution.(Parry isn't exactly carrying any important bills on his ownsome).

Later in a town hall, Parry defended the bill to constitutents who work for the state, as Bluestem noted in Mike Parry tells public employees they'll get bigger pensions, suggests new tax on services:

At one point, Parry characterized the pension bill as an increase.

“Why wouldn’t you want an extra 3 percent in your pension for when you retire?” Parry said.

“I’m not getting an extra 3 percent. I’m getting to pay an extra 3 percent because you’re reducing my employer’s contribution to it,” Driskell said. “And you are cutting me, sir. You’re cutting 15 percent of my co-workers, which may well be me, and you’re cutting 6 percent of my salary. You are cutting me. Don’t tell me you’re not. I have a brain.”

In their rush to demonize (and cut take-home pay for state employees), Hoffman and Parry forgot to check their math on the pension fund itself. A press release from Senator Dick Cohen's office lays out of the case:

“Republicans have pushed their plan to cut public employee pensions under the veil of fiscal responsibility, but now it’s clear this is simply an attack on hard-working public employees,” said Sen. Dick Cohen, DFL-St. Paul. “This bill will add costs to state and lower governments, lower tax revenues for our state, and increase the unfunded liabilities in our retirement system. Worse, it will take money out of the pockets of working families during these difficult economic times.” . . .

. . .Experts at the Minnesota’s three major pension plans – the Minnesota State Retirement System, the Public Employees Retirement Association and the Teachers Retirement Association – testified that while Minnesota’s pension system is currently well-managed, the GOP proposal would add significant costs to the system, and expand the deficits in Minnesota’s retirement funds.

 

As introduced, the bill would have expanded the unfunded liabilities in the state’s retirement funds by $64 million. An amendment adopted to the proposal last night would reduce that figure to roughly $40 million.

 

“This so-called pension reform bill threatens the very stability of our state’s retirement system,” said Sen. Cohen. “At the end of the day, this bill is simply a cost increase on thousands of middle-class Minnesotans. It will bring in $30 or $40 million for our state’s General Fund, directly out of the paychecks of public workers. It is simply a pay cut disguised as reform.”

 

The measure was also opposed by city and county officials, nurses, firefighters, school districts, teachers, and state employee unions. Rep. Steve Smith, R-Mound, a House Republican lead on pension issues, has also questioned the merits of the proposal.

 

The State Government Innovation and Veterans Committee will consider whether to include the measure in a broader budget bill late Tuesday evening.

And the genius heading that committee? Mr. Personality himself, Senator Mike Parry.

Photo: Senator Mike Parry, real man of Republican genius.

Playing politics with pain: Glenn Gruenhagen blames Hutch Tech lay-off on taxes

Update 3/16: While Minnesota Republicans carried on about how HTI's relocation of jobs could have been motivated by a two-year tax credit for businesses relocating to Wisconsin, that's probably not a motivating factor. According to this business source:

"No deduction or credit will be allowed if the person, partnership, limited liability company, or S Corporation has done business in Wisconsin during any of the two taxable years preceding the first taxable year in which the deduction or credit would otherwise be allowed." Since HTI's Eau Claire (above photo) has been open and operating for some time, this MNGOP talking point is clearly nonsense. [end update].

I live in Hutchinson, Minnesota, and so have followed the fortunes of a local company that manufactures suspension drives for computers. Put bluntly, the company's fading from the local scene mostly has to do with shifts in demand for the product, created by changing computer technology, as well as shifts in manufacturing offshore.

That hasn't eased the pain of the people I know who worked there--mostly parents of young friends around college age--who have been laid-off in the last few years from the non-union plant. Fortunately, most have been able to go back to school and switch careers.

Today's Star Tribune reports in Hutchinson Technology laying off hundreds:

Far fewer people will be working for Hutchinson Technology due to the Minnesota company's plan to restructure and move its components operations from Minnesota to its facility in Eau Claire, Wis., and overseas.

Hutchinson, based in its namesake city west of the Twin Cities, said Tuesday that it will cut its current U.S. workforce of about 2,275 by 30 to 40 percent. In Hutchinson, about 600 of the 1,125 jobs will be eliminated.

Leave it to Minnesota's Republicans to seize on a local small town's misery to tout Wisconsin, run by divisive fringe Governor Scott Walker, over Minnesota. My favorite new state House member, Glenn Gruenhagen wrote in an email that went out today:

This is how a stable, low-tax and pro-growth business climate at the federal level can generate revenue for Minnesota. But there is still vast room for improvement at the state level and we continue losing jobs to neighboring states. We recently learned a prominent Hutchinson company will shift its manufacturing operations to Wisconsin at a savings of $45 to $60 million annually. Our tax climate remains among the most unfriendly in the country and Gov. Dayton’s plans to raise taxes would put us at a further disadvantage.

You reach a point of diminishing returns when tax increases push our job creators out of the state, cutting off revenue streams we need for sustainability and a strong economy. Our neighbors – including Wisconsin – recognize this and declare themselves “open for business” instead of strangling the goose that lays our golden eggs.

Is Minnesota's tax climate the reason to blame for HTI's shift in production? Or is Gruenhagen simply demogoguing the pain that workers will be feeling in nearby Hutchinson (Gruenhagen lives in Sibley County, but sells insurance in McLeod County's seat, Glencoe).

A curious closing in South Dakota

Posted on the company's website, the press release announcing the restructuring notes:

Fortun said that improvements in TSA+ yield and output and being ahead of plan with the ramp of its assembly operation in Thailand have provided an opportunity to further lower the company's operating costs. "With a faster than expected transition from our legacy TSA component manufacturing process to our more automated TSA+ process, we need fewer employees to meet customers' volume requirements," said Fortun. "Additionally, progress at our Thailand assembly operation is enabling us to accelerate the transition of assembly manufacturing to that location. The continued transition of TSA to TSA+ and the continued ramp of our Thailand operation, combined with the savings from our consolidation and restructuring, will improve the utilization of our high-volume manufacturing locations and support infrastructure and help us return to positive cash flow and profitability sooner."

And where are those TSA+ components made? The Hutchinson Leader reports in Hutchinson Technology to end manufacturing in Hutchinson:

The decision to consolidate manufacturing in Eau Claire was made because the plant there is better equipped and has the capacity for the production of TSA+, the company's newest line of suspension assemblies.

TSA+ suspension assemblies, which accounted for about 45 percent of the company's fiscal 2011 first quarter shipments, are expected to account for more than half of the company's fiscal 2011 second quarter shipments and two-thirds of its shipments by year end.

Fortun said improvements in TSA+ yield and output and being ahead of plan with the ramp of its assembly operation in Thailand have provided an opportunity to further lower the company's operating costs.

"With a faster than expected transition from our legacy TSA component manufacturing process to our more automated TSA+ process, we need fewer employees to meet customers' volume requirements," Fortun said.

In 2009, the company announced it was resuming plans to build a plant in Thailand, according to news reports in July 2009:

HTI shipped 146 million suspension assemblies in the quarter and about 10 million TSA+ suspension assemblies, a next-generation product made in Eau Claire.

Company officials said sales of TSA+ suspension assemblies have the potential to double in the fourth quarter. HTI also resumed plans to establish an assembly operation in Thailand, which could be operational by the second half of next year.

In April 2009, the local paper in Eau Claire reported:

"Our TSA+ manufacturing processes are critical to providing next-generation suspension assembly products that meet customers' requirements for superior performance and lower costs,"  Pautz added. "High-volume TSA+ production is done in Eau Claire. That team is doing a great job in meeting increased demand, while at the same time continually improving the process.

In 2009, Democrat Jim Doyle was in his second term as governor; Democrats had taken control of the State Assembly with the 2008 elections, while retaining control of the State Senate. Under Republican logic, one would think that Hutch Tech jobs would have flowed to South Dakota. 

And indeed, Hutch Tech did open a plant in South Dakota in 1988, and company co-founder Jeff Green made waves at the time by criticizing Minnesota's business climate. Employment peaked at that plant in 1999, but declined after that time ( Rob Swenson, "Hutchinson Plays Smaller, Vital Role", Argus Leader, September 17, 2008, Nexis, accessed 3/8/2011).

But Hutch Tech closed that Sioux Falls plant in January 2009. 

It moved equipment and a few hundred jobs to Hutchinson and Eau Claire.

There's nothing in the current reportage to suggest that taxation is causing the consolidation to Eau Claire, nor the placement of the TSA+ lines in Wisconsin during the Doyle years.

And this company's leadership isn't shy. Were today's decision made because of the sudden shift in Republican talking point about business climates in Wisconson and Minnesota, we'd have head about it. Instead, the restructuring follows siting decisions made some time ago.

Offshoring of manufacturing

And then there's the shift to offshore manufacturing. In a related blog post at the Strib, business writer Eric Wieffering writes in Hutch Tech: Too little, too late?:

To some degree, the people of Hutchinson have been bracing for this moment ever since their namesake company's fortunes took a dramatic turn for the worse almost three years ago. The company has shed about 2,000 jobs since then. Still, the impact of the latest cuts is hard to overstate: the elimination of up to 40 percent of all jobs, including nearly half in Hutchinson.)

(One measure of how depressingly familiar this type of news has become for Hutch Tech: The quote that accompanied today's news is, word-for-word, the same as the one the company issued in '09, when it shut its South Dakota facility and laid off 300 employees. The only difference was the executive whose mouth the words were attached to.) [BSP: and the state in which the plant was located]

A year ago, Hutch announced plans to build its first overseas production facility, in Thailand. The company is banking on that facility to help claw its way back to profitability, but given that many of its competitors moved manufacturing to Asia a decade ago or more, did Hutch wait too long?

Details, details. Why would Glenn Gruenhagen look at facts when he can use his neighbors' misery to flog Governor Dayton?  Why let facilities and global trends get to the way of a chance to punish a DFLer?

Images: Hutch Tech, Eau Claire (above); Screenshot of Representative Glenn Gruenhagen's email (below)

Spinside the Senate: Chamberlain connects Medtronic lay-offs to high taxes

In an interview on today's  Republican Senate Majority Caucus's "Inside the Senate" broadcast, hosted by Waseca senator Mike Parry, freshman senator Roger Chamberlain repeats the Republican mantra that Minnesota's rate of taxation will drive business to relocate. Chamberlain serves on the Senate Taxes Committee.

No news there, nor that of the studies that argue otherwise.

The most fascinating point where Chamberlainplugs a round talking point into a square hole is his mention--twice--of recent lay-offs by Medtronic.

At 11:40, Chamberlain says:

I agree with 3M, enough is enough. they have to be able to compete on a global basis and if they can't, they'll either move their headquarters, expand other places, or eventually they'll go out of business. Honeywell left, others will leave. Medtronic laid off people...

Problem: there's nothing in news reports to suggest that the Medtronic lay-offs were caused by high taxes.

On February 22, MPR's Martin Moylan reported in Medtronic plans huge job cuts, impact in Minn. unknown:

Medtronic, the world's largest medical device maker, plans to eliminate up to 2,000 jobs company-wide. The cuts are part of a restructuring effort to make up for disappointing sales of its implants.

The Fridley-based company said Tuesday the downsizing will involve both layoffs and not replacing workers who depart or retire. The cuts are aimed at achieving "long-term sustainable growth" and will reduce its 41,000-person work force by 4 to 5 percent. . . .

The layoffs announcement came as Medtronic reported net income of $924 million for the three months that ended Jan. 28, beating Wall Street expectations. Sales rose about 3 percent to nearly $4 billion....

Those sluggish sales are caused in part by consumer choice when faced with having to pay a greater share of medical costs, competition with the industry and pressure from insurance companies to lower costs:

Patients are paying an increasing share of their health care costs, causing people to delay optional procedures requiring expensive devices, Wald said.

"Even defibrillators, even pacemakers, especially spine products, the neurology products ... they can all kind of be postponed because they're not life threatening," he said. "So, if you look at it kind of that way, there's a number of products and product lines at Medtronic that are susceptible."

And Wald said Medtronic also faces intensifying competition from rivals, as well as pressure from insurers determined to cut reimbursements for medical devices.

(An aside: one standard conservative argument for health savings accounts is that consumer choice will make people more aware of health care costs and so drive down costs; reduced demand for Medtronic's products is certainly illustrative of this notion of consumer-driven health care).

And taxes? The Star Tribune's report, With growth starved, Medtronic is cutting jobs, links taxes with the company's increased earnings:

Overall sales for the quarter ended Jan. 28 declined 3 percent, to about $4 billion. Earnings were $924 million, or 86 cents a share, compared with $831 million, or 75 cents a share, the same period last year.

Analysts were expecting the company to earn 84 cents a share. Leerink Swann analyst Rick Wise wrote in a note to investors on Tuesday that although Medtronic beat Wall Street expectations by a few pennies, that performance "was driven almost wholly by a much lower-than-expected tax rate."

No word whether those taxes were state or federal, but it's not high taxes directly causing the lay-offs. Lower taxes contributed to higher earnings, but the lay-offs occurred because of disappointing sales.

Nor have, so far as I can tell, representatives from Medtronic appeared before the committee on which Chamberlain sits.

Photo: State Senator Roger Chamberlain, R-Lino-Lakes.

Related posts:

Spinside the Senate: Senate Republican Majority Caucus produces Radio Free Mike Parry

Spinside the Senate: send GOP Senate Majority Caucus comm shop your questions

 

Chamber vs. Chamber?: Mayors on LGA and Greater Minnesota

In a column presumably distributed by the Coalition of Greater Minnesota Cities (CGMC), the mayors of Albert Lea and Bemidji weigh in on why LGA is critical to Greater Minnesota businesses (via the Worthington Globe).

There is an interesting divide emerging between the Minnesota Chamber of Commerce and some local chambers. Recently, the state chamber publicly took local chambers in Greater Minnesota to task for signing, or even considering signing, a resolution supporting the Local Government Aid (LGA) program.

That was a hard blow to businesses and chambers whose economies are on the line. They understand that the LGA program is critical not only to their businesses and to the economy of Greater Minnesota, but to the economic health of the state as a whole. They disagree with David Olson, president of the state chamber, who said local chambers that support LGA are simply protecting the status quo.

Unfortunately, the status quo over the past few years has been a history of LGA cuts leading to higher property taxes and reduced services for businesses and homeowners in Greater Minnesota and the inner city, while those located in high property wealth cities, particularly in the suburbs, have remained unscathed. If LGA is cut, these inequalities would accelerate, making businesses in greater Minnesota even less competitive with those in property rich cities or in other states, and that is not acceptable.

The state chamber says that when it comes to weathering the current economic storm, everything should be on the table. But as the mayors of cities that have had to struggle with balancing the level of property taxes with the service needs of our businesses and community, we see nothing but the status quo in what they are asking. When it comes to raising revenue, property taxes are always on the table while other revenue sources appear to be untouchable, and when it comes to cuts, some aid programs, like LGA, are front and foremost while others are ignored.

The Coalition of Greater Minnesota Cities (CGMC), of which our cities are members, has also been chastised by the state chamber. They say that we oppose change, but what we really oppose is their targeting of the businesses and communities with the fewest resources and highest needs. It is time for them to take their own advice by actually putting everything on the table instead of serving us more of the same old LGA cold cuts as though it is something for which we should be thankful.

Truth be told, the LGA program has served the state well, keeping all areas of the state prosperous. That being said, we do not oppose changes in the program, but any reform proposal should be evaluated by two standards:

* Does the reformed program continue to address the original goals of the LGA program, which is to even out property taxes across the state?

* Do changes in the LGA and other property tax relief programs distribute property tax increases and service delivery reductions fairly across the state without expecting Greater Minnesota to carry more than their share of the burden?

So far, we haven’t seen any proposals, including the state chamber’s vague “reform” policies, that meet these criteria. What we have seen is that, in taking local chambers to task for their support of the LGA program, the Minnesota Chamber of Commerce discounts the fact that what helps large corporate headquarters does not necessarily benefit Main Street businesses or industries located in Greater Minnesota. It is time the chamber takes all businesses in the state, not just big business, into account when setting its policies.

Vern Rasmussen is the mayor of Albert Lea; Dave Larson is the mayor of Bemidji.

It's fascinating to watch the Republican majorities in both houses of the state legislature seek to cut or eliminate LGA. Because they're all for "rural values," except when their corporate overlords in the state chamber tell them not to be.

Photo: Historic view of downtown Bemidji.

Labor to legislature: "We are in a jobs crisis"

by Laura Askelin, President
Southeast Minnesota Area Labor Council

With the Legislative session in full swing, I joined hundreds of workers and stormed the state Capitol earlier today to make sure that Minnesota’s state lawmakers focus on maintaining and creating family sustaining jobs, while finding a fair way to solve the state’s revenue shortfall.

Minnesota AFL-CIO President Shar Knutson welcomed us to Working Families Day on the Hill and reminded us that we weren’t just representing union members, but we represented all middle class Minnesotans as we fought for the over 200,000 Minnesotans who are out of work.

It seemed appropriate that as workers stood at the Minnesota capitol to fight for workers, we also voiced our support for the workers in Wisconsin, where an estimated 30,000 people joined a massive protest against Gov. Scott Walker’s attempt to eliminate collective bargaining rights for state workers.

“We’re seeing the same kind of things in Minnesota,” Knutson said. “A fringe group of politicians is trying to make it hard for working people to make a living.”

The mere mention of Wisconsin Gov. Scott Walker's proposal to strip public employees of their collective bargaining rights drew loud boos from the crowd.

We cheered as President Knutson voiced Labor’s support for Gov. Dayton’s jobs and infrastructure bill that would create nearly 30,000 family-supporting jobs in Minnesota.

Some of the great speakers included Dayton’s Chief of Staff Tina Smith and Beth McCuskey, a teacher and member of Education Minnesota, who urged lawmakers to support Gov. Dayton's initiative to increase school funding in each of the next two year. A Working America member and a Laborer both brought tears to some as they shared their stories of being out of work and desperately needing jobs.

Mike Lindholt, MnDOT snow plow driver and AFSCME member, called out lawmakers who have been blaming public employees for the state's fiscal problems. He spoke about the need to solve the budget crisis in a fair and balanced way.

Lindholt’s statements brought on cheering and cries of “Tax the Rich” from the crowd--and a place in Workday Minnesota's coverage of the event, Capitol echoes with chants of ‘Jobs now!’:

Snowplow driver Mike Lindholt said he was dismayed by the way public service workers have been characterized by some lawmakers.

“I am not a beast,” he said. “I am your friend, your neighbor, your snowplow driver . . . We take pride in keeping Minnesota safe and keeping our roads clear.”

After the rally, we got to meet face to face with elected representatives. I was pleased to see many of the Southeast state Legislators take time out of their busy schedules to meet with us. 

To all the Bluestem Prairie readers out there, if you’ve never been to the capitol, I encourage you all to take a day to journey to the capitol to visit with your legislators. We are in a jobs crisis; we need our legislators to stay focused and create jobs. Stand up and make your voice heard.

A native of Wisconsin and an AFSCME member, guest writer Laura Askelin kicks ass for the working class in the vicinity of Rochester, Minnesota. When not chastising the overly comfortable or strengthening the position of working Americans, she enjoys snow, photography, and the companionship of her family.

Photos: Workers rally in the Minnesota Capitol rotunda (above); AFSCME member and snowplow driver Mike Lindholt pumps up the crowd while Minnesota AFL-CIO President Shar Knutson looks on (below). Photos by Laura Askelin. Used with permission; all rights reserved by Askelin. See more pictures in the album, 2011 Working Families Day at the Capitol.

Will Randy Demmer have the courage to join the "Let Them Eat Want Ads Caucus"?

Last week, Randy Demmer generated a flurry of publicity--and consternation among his Tea Party base in Southern Minnesota--by taking a pass on pledging to join Michele Bachmann's Tea Party Caucus if elected.

In the Washington Post's Plumline, Greg Sargent writes in  The "Let Them Eat Want Ads" Caucus:

Let's call it the "Let Them Eat Want Ads" Caucus -- those candidates and public officials who argue that unemployment benefits are problematic because they discourage people from seeking jobs.

And let's add another Republican to that caucus: Candidate Michele Rollins, who's running for Mike Castle's open House seat in Delaware.

Rollins, who's running in a contested race against green technology exec John Carney, was asked by a constituent if she would have voted to extend unemployment benefits. She suggested she wouldn't, claiming that "for someone who hasn't worked in two years" it's "pretty hard to get energized to go back and look for a job."

She added:

"I know this is a bad market and a very bad time. But you just cannot keep paying people, cannot keep taxing us to pay people to do nothing, because they will continue to do nothing for a very long time." . . .

. . .To be clear, this is not the official position of the GOP leadership, which says it favors extending unemployment benefits if the cost of them is offset elsewhere and doesn't add to the deficit.

And that's why we need a special caucus for those who do see benefits as problematic: The "Let Them Eat Want Ads" Caucus. Any takers?

Here's the perfect group for Randy Demmer to join--and establish his independence from the Washington Republican circle of insiders that has rallied to his cause via new campaign chair, Beltway super-lobbyist Vin Weber.

Demmer should be a charter member.

Last week the Hayfield Republican told the Mankato Free Press:

As for extending unemployment benefits, approved by the House but not the Senate, Demmer would be reluctant.

Unemployment checks serve as competition with private employers seeking to hire, Demmer said. He’s talked to business owners who want to add employees but have been turned down by those who choose to stick with their unemployment benefits.

“We have people not taking a job because they have unemployment,” he said.

For those who reach the end of their benefits, Demmer is confident a job will be found.

“People are resourceful,” he said. “When they’re put in a position to really go and find something, I think they will.”

Sounds like a perfect fit.

Morris West Central Research and Outreach Center centennial: Ag in 2110

by Randy Olson

Agriculture in 2110: intensive agriculture is the path

To round out the  West Central Rsearch and Outreach Center centennial program, two speakers discussed “Paths to a viable agriculture in 2110,” looking at how agriculture will adapt to the demands of a growing population and a finite amount of natural resources to work with.

The speakers took divergent paths, with one advocating tweaks on conventional systems, while the other extolled  diverse sustainable systems. Their polar positions are emblematic of the crossroads of American agriculture, with an ag school prof at one end and the head of the Land Steward Project at the other.

The first speaker, Jude Capper, Associate Professor of Animal Science at Washington State University, presented “Is intensive agriculture the path?”

Professor Capper's report focused on what she dubs as our society's main challenge, our rising global demand for more food.  By 2050, the global population is estimated to increase from 6.8 billion to 9 billion people.

"Global food demand will increase by 100% in that period, due to population and middle-class growth," Capper said.  

Other comments she added to emphasize her point were:  consumers want choice.  Twenty percent of additional food will come from using new farmland that before we thought we couldn't use.  Ten percent will come from increased cropping intensity.  And seventy percent will need to come from continued use of safe, efficacious technology to increase productivity.

"Productivity has a place in agriculture.  It is the reason for the reduction in the carbon footprint of our dairy cows in the U.S," Capper added.  "For every day an animal is alive, energy and protein is required to maintain their body functions.  To get 60 pounds of milk a day out of a dairy cow, we had four times the maintenance costs in 1944 compared to 2007.  If we need more feed, we need more crops, land, fertilizer, and natural resources."

Golden oldie that rhymes with Emmer, part II: Demmer on minimum wage Youtube

Yesterday, Bluestem took a look at the May 2, 2005 debate in the Minnesota House on raising the minimum wage. Here's Randy Demmer's floor statement:

Meanwhile, some fun reporting is coming out because of the Emmer proposal. First, Emmer is "explaining, not gaining, as they say. I like comment #4 the best, which begins:

Love all the liberal righteous indignation. These same people are willing to:

1) Take away customers from these same servers by imposing property rights violations in the form of smoking bans. Servers lost their jobs when the smokers stopped coming in thanks to these same busy-bodies.

I'd like to hear "Average Joe's" opinion of endorsed Republican Secretary of State candidate Dan Severson.

Second,  Star Tribune column Jon Tevlin did a bit a of fact-checking in Myth list: Unicorns, Big Foot, rich waiters. He talked to the owner of the restaurant where Emmer made his statement about the tip credit and claimed that some waiters made over $100,000. The response:

"I don't want people thinking we have people making $100,000 a year here, because we don't," said Kasel, who had to call his 29 employees that morning to prevent a mutiny. "No way, shape or form did I [tell Emmer] anyone made $100,000."

Kasel said rather he told Emmer that a couple of his employees do well, and that "If all the pieces fell in the right place" they could make $100,000. But not a server, he said.

Finally, MinnPost's David Brauer looked at the endorsed MNGOP gubernatorial candidate's claims that Minnesota's restaurant prices were as high as those in California in Emmer and Olive Garden:

The media has noted the candidate's assertion of $100,000 tipped employees, median server income that is less than a third or a fifth of that, but no one has checked this Emmer claim:

"Minnesota's menu prices are comparable to California and New York. We have some of the highest prices in the country. It just gets passed on to consumers."

Of course, there are so many variables in menu pricing (restaurant fanciness, cost of ingredients, etc.) that making an apples-to-apples judgment is tough. But there is at least one place we can turn to for a pasta-to-pasta comparison: Olive Garden.

. . .At least when it comes to this corporate Italiano eatery, Emmer appears to be wrong: Minnesota prices are clearly and consistently lower than California's. (Just to be sure, I checked the OG in Clovis, near Fresno, in case Burbank seemed too glam. The California prices were identical.)

Go read both the Tevlin and Brauer pieces.

A golden oldie that rhymes with Emmer: 1st CD GOP candidate on the minimum wage

The reaction to Tom Emmer's proposal to slash minimum wages for wait staff caused me to revisit the Minnesota House debate on the issue that took place on May 2, 2005. Those who want to watch it may do so by accessing the body's video archives of the debate here.  I'll try my hand at capturing video as time permits).

It was a fascinating debate in both house, ably summed up at the time by Tom Scheck at Minnesota Public Radio. One statement by Randy Demmer, now the GOP-endorsed  congressional candidate in Minnesota's First, shows which side he's on in this debate:

Others say some businesses may be forced to close if the wage hike becomes law. Rep. Randy Demmer, R-Hayfield, says the Legislature is sending the wrong message to those who may want to start a business in Minnesota.

"Welcome to the business world, welcome to business in Minnesota," Demmer said. "We love it here, We love to have you here so we can screw ya. Folks, this is a bad idea."

Demmer's floor remarks begin at 2:00;18 in the archives. You'd think from his remarks that Demmer grew up inside a rags-to-riches Horatio Alger dime novel, and through luck and pluck opened a small business all on his own. Truth be told, he started in business working for his father's implement dealership.

Even more astonishing: Tom Emmer's carrying on about the need of an amendment to repeal the minimum wage entirely. He is recognized at 2:08:08 in the archived footage. The exchanges between Emmer and Ranger Tom Rukavina are vintage Housee debate, and worth a read.

Emmer recites the basic conservative talking points about how the minimum wage, whatever its level, are job killers. But there's more to the story: the American Voice 2004 produced this handy guide to both sides of the argument over minimum wage that's roughly contemporary with the 2005 Minnesota House floor debate.

However, the Journal of the House for May 2, 2005, reveals that for all Emmer's bluster, the amendment was never voted on. Emmer withdraws his motion on the amendment at 2:28:46; the proposed (and withdrawn) amendment is noted in the Session Weekly beginning at the very end of the article on page 15, with copy carried to page 22.

The bill passed (and the GOP controlled the Minnesota House at the time, so the bill had it have bipartisan support, with 18 Republicans voting yes). Congress raised the federal minimum wage in 2007. Given the general economic downturn, it's difficult to assess the impact of the raise. However, the Economic Policy Institute published an Issue Guide on the Minimum Wage that's fairly accessible to the lay reader, and its look at Teenage Jobs and Minimum Wage is a start for those who want to examine the consequences of the latest minimum wage hikes.

Tim Walz was a co-sponsor of the federal minimum wage increase that passed in 2007.

Gubernatorial speed dating: Emmer slips on wait staff minimum wage proposal

One of the best dating tips I ever received was to watch how a man treated wait staff and bartenders. That's how he'd treat you after a few months into a relationship, my wise friend said. Experience soon taught me the merit of her advice.

That helpful insight came to mind when I read Emmer: Count employees' tips towards minimum wages

Republican gubernatorial candidate Rep. Tom Emmer said the state could gain jobs if employers could a pay a lower hourly wage to employees who earn a lot of money from tips.

He stopped by the Eagle Street Grille in St. Paul Monday morning, saying government needs to listen to businesses about reducing regulatory burdens and adding jobs.

"With the tips that they get to take home, they are some people earning over $100,000 a year. More than the very people providing the jobs and investing not only their life savings but their families' future," Emmer said.

Emmer said some well-tipped Eagle Street Grille employees are among those making more than $100,000 a year. But one of the grille's owners said only a "couple" of his 45 or so servers make that much in a good year.

One doesn't have to wonder how Emmer would be treating average working people with that take on taxation. The Bureau of Labor Statistics placed the mean annual wages for waiters and waitresses in Minnesota at $22,730.

Let's just say that if Tom asks for a number so he can chat more about his big visions, he's getting this one.

Photo: Wipe out much, Tom?

Milk Not Jails: rural-urban partnerships oppose the prison industrial complex

by Brian Hokanson

I'm back home in Minnesota after the conclusion of the U.S. Social Forum in Detroit, Michigan, last Saturday. Host to this historic gathering of 15-20,000 social justice strugglers from progressive business owners to anarchists, Detroit was and remains on the front lines of capitalism's crisis. It's a city of contradictions. Thriving community gardens dot otherwise overgrown lots and abandoned buildings; friendly smiles mask neighborhoods plagued by violence and one of the nation's highest rates of police killings.

In my last article about the Forum, I mentioned Threat Management, the paramilitary-style firm hired to provide security at the USSF's official tent village. From a friend connected with the bicycle caravan camping there, I learned more.

"One of my friends on the caravan showed up at the village, saw the paramilitary guys, said 'Uh-uh,' and left to find housing on her own," she told me. "But in that village, there were also three full busloads of youth from out east, all under 18. The paperwork they had to do to just to get to Detroit was incredible, and all their parents had to sign waivers. So I guess the Forum needed those security guys to prove to the parents that the camp would be safe."

To us, that raised the question: Could we create a sort of safety without fences and guns, or prisons and police--a safety from below?

Prison abolition at the Westin Hotel

Another contradiction in Detroit was the varied locations of Social Forum activities. We live in a world where social change happens in empty lots for some (for example, the unofficial tent village I slept at) and the region's premier convention center (Cobo Hall) for others. At this point in my life it happens at both, and also at the ritzy Westin Book Cadillac Hotel, which somehow ended up being a Forum workshop venue.

The workshop I attended there was "Why Rural America Matters for Prison Abolition," and the suit-and-tie Westin staff went out of their way to be unhelpful towards us. I was struck by the "normal" appearance of the 30+ workshop participants. The Westin probably didn't think the same.

So why does rural America matter?

Whether you're seeking to abolish prisons or simply reform them, the statistics are grim. The United States has the world's highest incarceration rate (1 in 100 now do time every year) AND the highest total prison/jail population in the world. In 2008, according to the U.S. Bureau of Justice Statistics, 3.2 percent of all U.S. adults were on probation, in jail or prison, or on parole at year's end.

Most prisoners are from urban areas, creating the impression of an urban issue. But most prisons are located in poor rural areas. Between 1990 and 1999 alone, 245 prisons and many more local jails were built in rural America. That's a new prison every 15 days. There are more prisoners in America--2.4 million--than farmers.

The prison industrial complex (defined here) and the criminal justice system as a whole are bastions of white supremacy. Incarceration rates for people of color are greater than their percentage of the population in all 50 states. I'm white, grew up in a rural area, and now live in an urban one. I'm not very personally impacted by the fact that around 1 in 10 black American males under 30 are trapped in a cage as I write this. It's doesn't directly affect me much that if current trends continue, a black boy born in 2001 will have a 1 in 3 chance of going to prison—a Latino boy 1 in 6; a white boy 1 in 17.

But it sure affects Detroit.

The city is 80 percent black. Riding the city bus, I was the only white person on board when the bus wasn't coming from Cobo Hall. "This is the most white people I've seen in Detroit since Kennedy was President," said one local Forum participant.  And Detroit knows about white supremacy—institutionalized racism that overrides individual prejudices and creates systemic injustice.

Outside the anarchist convergence center on MLK Drive--remember anarchists, the top domestic terror threat for whom the rulers needed 19,000 cops to protect the G8/20 summit in Canada this weekend?--the only police harassment I saw over five days was directed towards black folks waiting for the bus while enjoying a free meal from Food Not Bombs. Someone called to say they were smoking weed, although only one was smoking a cigarette. The cops – themselves black – harassed the men, who in unison spit back about the police, themselves black, enforcing a white supremacist structure.

Then the designated police liaison for the center – a white woman – intervened, and the cops left.

The last factory in town

"We need to link the issues of urban and rural America," said one of the presenters at the Westin workshop, which was organized by the Center for Community Alternatives (upstate New York), California Prison Moratorium Project  (eastern California) and Thousand Kites (Appalachia). All three organizations challenge prisons and prison practices in rural areas using partnerships with people in large cities.

And all three organizations have noticed a similar pattern while mobilizing rural residents to support de-incarceration and prevent expansion. Nationwide, many rural communities depend on prisons for jobs, and although research demonstrates that prisons actually hurt local economies, not to mention the environment, governments and corporations use the job allure to pit rural communities against urban ones.

Drazkowski's actions speak louder than words (and then some)

The Winona Daily News takes Representative Steve Drazkowski to task for voting against legislation he authored and touted in Our view: Drazkowki's actions speak louder than his disingenuous words:

"The city is working hard to get back on its feet, and this should help them in their efforts."

- Rep. Steve Drazkowski, Feb. 20, 2010, on authoring legislation to get the city of St. Charles more funding

The good news is that in the waning hours of an otherwise disappointing legislative session, lawmakers in St. Paul found $50,000 for the city of St. Charles, which experienced a tragedy with the loss of its largest private employer, North Star Foods, last year.

The bad news? The editorial continues:

Yet it's curious and more than a little disheartening to look at the voting record, which shows while St. Charles ultimately got $50,000 of funding from the state, it was through no help from Drazkowski.

He voted against it.

Twice.

Once when House File 3729 came to the floor of the House and then again when it came back with changes from the Senate.

Drazkowski's words and posturing would lead voters to believe St. Charles and the North Star Foods fire have been at the forefront of his mind.

But his actions speak so much louder than words.

There's actually more to this story than the editorial examines--if one looks at who lost their jobs with the fire at North Star Foods, which eventually elected not to reopen, and the effects of the job losses on the small Southeast Minnesota town.

KEYC: Walz on federal reserve audit and roundtable with Mankato businesses

One rallying cry from both right and left has been to audit the Federal Reserve system. Congress has approved a measure to do just that. KEYC-TV reported:

News 12's Ryan Gustafson has the story.He often goes his own way in Congress... but one idea from Texas congressman Ron Paul has won bipartisan approval.

The Senate has voted 96-0 to add a one-time audit on the Federal Reserve to financial reform legislation.

Rep. Tim Walz says, "I've been on this bill for over a year, I was one of the early supporters with Ron Paul, my colleague here in the House. I absolutely agree with this, and I think I was on it as early as anybody and maybe before I heard from the Tea Party folks, because they're right on this. It's all about that theme of transparency and honesty."

While the House bill was passed back in December, the Senate continues to hammer away at their own.

Republicans ended a filibuster threat after lawmakers removed a 50 billion dollar fund the GOP called a perpetual source of future bail-out money.

Closer to home, Walz Discussrd Financial Reform with Business Owners. The CBS/FOX affiliate reports:

Congressman Tim Walz sat down with local businessmen today to talk about the Wall Street reform bill.News 12's Caroline Rowland has more on what they had to say about the new legislation.

Congressman Tim Walz says, "The American dream, the If I work hard if I save, I can buy a home, send my kids to college and all that. People who played by those rules got stuck holding the bag."

Congressman Walz heard first hand from people who followed those rules, but suffered greatly with the financial downturn.

And people like Joe Lorentz got the chance to tell him what they want out of the Wall Street Reform bill.

Read what they said at the link. Walz voted against both versions of TARP in 2008, as well as the bail-out of the auto industry.

His endorsed Republican opponent, Randy Demmer, received a PAC contribution earlier this year from a fund laced with TARP largesse. Bluestem reported on this fascinating sidenote in From hedge funds making hay to Hayfield: bailouts, campaign bucks and bamboozlement.

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