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Dahms, Suss clash on taxes, budget deficit

October 10, 2012
By Kevin Sweeney - Journal Editor , The Journal

NEW ULM - State Sen. Gary Dahms and his DFL challenger Ted Suss participated in a spirited debate Tuesday at the Senate District 16 candidate forum sponsored by the League of Women Voters of New Ulm.

Dahms, a retired insurance agent from Redwood Falls, is the Senate District 21 incumbent running in the newly redrawn district.

Suss, the DFL-endorsed candidate, is a retired school administrator who served three years aa superintendent of schools in Hendricks and Ivanhoe, and nine years as superintendent in Wabasso. He served two terms in the Minnesota House in the 1970s.

Suss and Dahms clashed over issues of taxation, who was responsible for school funding shifts, and the size of budget deficits that the state has dealt with.

On the opening question on what the state can do to foster economic development in rural Minnesota, both candidates expressed similar views on streamlining regulations, keeping a competitive tax structure, supporting education and keeping roads and bridges in good repair. Suss, however, criticized Dahms for voting for the Homestead Credit changes in 2010 that eliminated Homestead Credit payments from the state in favor of a Homestead Market Value Exclusion. Suss said that shifted $400 million from the state to the property tax, especially to commercial and industrial taxpayers who saw double digit increases in their property taxes.

Dahms refuted Suss' $400 million figure, saying that in 10 years the Market Value Homestead Credit was paid in full only once. In 2011, said Dahms, it was set at $291 million and $157 million was paid out.

"It's not the number you were referring to, Ted, let's be factual," said Dahms. "$157 million of that was paid out, and of that $157 million, $24 million went to agricultural homestead credit, which is continuing to be paid. Also, there was an adjustment made in the Market Value Exclusion where we increased $32 million for that program and in 2013 there will be another $66 million going into that program. I take responsibility for voting for the Market Value Home Tax Credit, and I also take responsibility for voting for the Homestead Exclusion credit, I just want the facts to be correct."

Suss reiterated that the shift of tax burden from the state to business and other property taxes was about $400 million.

On the question of when the state should return the money shifted away from school districts to balance the budget, both candidates agreed that it should be done as soon as practically possible, but argued over who was at fault. Dahms said that "When Republicans took control of the House and Senate in 2010, the DFL had left us with a $1.7 billion shift. We added $700 million more."

Dahms said the shift is being paid back out of budget surpluses, and that Republicans tried to pay down another $419 million last year, but it was opposed by the DFL and vetoed by the governor. Suss argued that the $419 million would have spent down the state's "rainy day" budget reserve, which made little sense when the state was facing a $1.5 billion deficit in the next biennium. Dahms argued back that the state Office of Management and Budget predicted a $1.1 billion deficit, not $1.5 billion.

On the question of Local Government Aid, which the state pays to some cities and counties to equalize spending for services in low tax base communities, Suss said cuts in LGA have shifted costs from the state to property taxes, which is an inequitable form of raising revenue.

"The state has a much greater capacity to raise revenue more equitably through income and sales taxes," said Suss.

Suss said he would like to see the LGA restored, and to have all parties sit down together and discuss the issue and come up with an answer, "something the legislature has not been willing to do in the past."

Dahms said the uncertainty in the LGA in 2008 and 2010 made it difficult for cities and counties to budget. The changes made since 2010 have "stabilized" LGA, making it easier for local units of government to budget.

Suss said that cutting LGA to "zero" is hardly stabilizing the program. Dahms said that Suss' "zero" comment was inaccurate.

On the issue of property taxes, Dahms said that on the average, over the past ten years, property taxes increased6.7 percent a year. In the last year, the increase was only 4.7 percent, showing that the increases are slowing. He admitted that there is still work to do.

Suss commented that "Taxpayers who have been paying more every year will be glad to know they are really paying less."

In his closing statements, Suss, who served four years in the House of Representatives in the 1970s, said he decided to run because he was disgusted with the shutdown in the state government in 2010.

"It shows the legislative process has been broken and must be fixed. It will take cooperation, collaboration and negotiation," he said.

"We have a senator who has deserted cooperation because his party bosses told him not to," said Suss.

Dahms countered in his closing statement that in his two years in the Senate he authored 23 bills that passed into law, and 16 had DFL co-authors. He compared that to Suss's record of passing four bills in two terms, and only one had a Republican co-author.



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