Four Takeaways from Mark Dayton’s Last State of the State Address
Mark Dayton opened his last major political speech as governor of Minnesota with a joke — at his own expense.
“Some people have suggested I conclude my speech now, to make certain I can walk out by myself,” the two-term Democrat said to laughs in a joint session of the House and Senate, which had gathered to watch his eighth and final State of the State address.
Dayton was referring, of course, to last year, when three-quarters of the way through his speech he collapsed at the House rostrum because of dehydration and had to be carried out the back of the chamber. “However, this is my final State of the State address, and there is more I want to say,” he said. “So, cross your fingers.”
The lines were vintage Dayton, whose self-deprecating sense of humor has followed him through an unexpectedly long career in Minnesota politics, from state commissioner to auditor to one-term U.S. senator to two-term governor of Minnesota. In his last and current elected office, he’s faced a $6.2 billion budget deficit, a 21-day government shutdown, several overtime special sessions and a state Legislature that changed control every election cycle. Dayton and his jokes — “it's helpful when you clap, that gives me a chance to hydrate,” he told the crowd — were one of the few constants for the last seven years, and at 71 years old, he’s retiring from politics for good when his term ends.
The speech, coming in at over 30 minutes and 2,933-words, was shorter and more personal than his previous addresses, and he used it to both look back at how the state has changed during his time as governor and describe where he sees it going after he’s gone.
Here are the four main takeaways:
He’s mostly happy about what he’s accomplished as governor:
Dayton often references the fiscal mess that awaited him when he came into office in 2011: a $6.2 billion budget deficit, which he had to work to balance with the first Republican-controlled Legislature in nearly four decades. “My father used to say, ‘Time flies when you’re having fun, and even when you’re not.’ Being governor was not fun when I took office in January 2011,” Dayton said.
But since then, the economy has improved. The state is looking at a $329 million surplus this year and its unemployment rate is lower than the national one. Dayton, at least in part, credited that success to his campaign promise to raise income taxes on the state’s wealthiest individuals, which he did in 2013. “The change has made Minnesota’s tax system more progressive and has been crucial in turning chronic budget deficits into steady surpluses,” he said.
Dayton also said he delivered on a campaign promise to increase funding for schools every year he was in office, though some years funding went up more than others. And he cited one of his prized legacy pieces: funding for all-day kindergarten. “This school year, nearly 80,000 children are attending all-day kindergarten and early-learning programs thanks to those wise investments,” Dayton said. “And they are getting better starts in school and life because of them.”
“He really stuck his neck out last year for 4-year-olds, and they don’t vote,” DFL House Minority Leader Melissa Hortman said after the speech. “The investments we make in those 4-year-olds will pay dividends for the state for generations to come.”
There are still things he wants to get done:
The 2018 legislative session is still under way, and as Dayton mentioned earlier this week, there are still 300 some days left during his time as governor. He made it clear in his speech that there’s plenty he wants to do before he goes, priorities that will become clearer on Friday when he releases his supplemental budget proposals detailing his goals for the rest of the session and how he wants to spend the $329 million surplus.
Part of that request, he previewed in his speech, will go toward higher education, which has seen declining state investments over the years, Dayton said. He will propose $10 million for both the University of Minnesota and the Minnesota State system to freeze tuition increases this year.
He’s also pushing legislators to support a large portion of his $1.5 billion bonding request, which focuses on higher education, state infrastructure and water quality. Republicans have said they are open to a bonding bill this session, but they aren’t likely to fund one as large as Dayton is asking for.
But perhaps his most controversial ask in his final year in office is his “MinnesotaCare Buy In” proposal, which would remove the program’s income restrictions and allow anyone to purchase coverage. Republicans in control of the Legislature have said the plan is a “nonstarter” and would increase premiums on hospitals.
“For some families, the MinnesotaCare Buy-In may offer better health care coverage at lower costs,” Dayton said. “That is exactly what competition is supposed to do for consumers. Legislators have a very clear choice. They can side with big insurance companies, who don’t want this competition; or they can side with Minnesotans, who do.”
He’s worried about Minnesota’s finances:
Dayton only directly referenced the idea of legacy once in his entire speech, saying that “restoring fiscal stability to our state budget is one of the most important legacies I can leave Minnesota. During my final year in office, I will not support any budget, tax, or policy proposals which would threaten that stability. I urge legislators to do the same.”
That stance could play out in several different debates this session, including a potential constitutional amendment from Republicans to dedicate certain sales and other tax dollars to transportation. Dayton said that proposal could cost the state’s general fund more than $1 billion in less than five years. “That’s a convenient solution — for as long as state budget surpluses continue,” he said. “It would further undermine the structural surpluses in future bienniums.”
Dayton’s prerogative will also play a big part in the upcoming tax conformity debate, a massive task in which lawmakers must line up state tax code with all of the new tax changes made at the federal level late last year, changes that doubled standard deductions but eliminated personal and dependent exemptions. Depending on how lawmakers go about making the changes in state law, some Minnesotans could see a tax increase next year.
“Last year, the Legislature reduced business property taxes for each of the next 10 years,” Dayton said. “The federal bill just cut the corporate tax rate by a whopping 40 percent. Combined, they provide huge tax cuts to Minnesota businesses. So, our number one priority — which will be reflected in my budget on Friday — should be tax fairness for individual Minnesotans and their families.”
Republican leaders said the business tax cuts made by the Legislature and the federal government are part of the reason the state is seeing a budget surplus this session, and they plan to leave all options on the table as they decide how to line up the tax code. House Speaker Kurt Daudt said he was just happy Dayton didn’t suggest raising taxes in his speech.
“I was fully expecting him to pitch tax increases, and he did not,” Daudt said. “I think that speaks well that he understands how we got the surplus that we have right now and the fact that he doesn't want to turn that back around into a deficit.”
He’s looking ahead:
Dayton ended his speech with a look ahead at a changing state. While Minnesota’s unemployment rate is low, its labor market is tight, and the only way for Minnesota to continue to grow is to train a new generation of workers, Dayton said. Many of those workers will be immigrants and new residents to the state.
“Some folks still resist the change,” he said. “If we can educate them to move beyond racism, religious bigotry, and other hatreds, they will see that this new diversity is crucial to our state’s future success.”
Dayton, who grew up the heir to a department store fortune, spent time as a public school teacher in New York before heading into a life of politics. He said all of those experiences have made him realize “how much our lives are proscribed by where we land at birth on this planet and then by the economic and social environments in which we live.”
“I believe most of us are incredibly fortunate to live in Minnesota,” he added. “Despite our challenges, there is nowhere else that compares.”