here for PDF format
Click here for
participants' responses to this interview.
Representative Mary Liz Holberg
Civic Caucus, 8301
Creekside Circle #920, Bloomington, MN 55437
March 11, 2011
(phone), Janis Clay, Paul Gilje, Jim Hetland (phone), Sallie Kemper, Dan
Loritz, Wayne Popham (phone), and Clarence Shallbetter (phone)
As a pro-jobs
strategy, Holberg favors a state budget without tax rate increases. She
calls for restructuring human services, a realignment of the state's
relationship with local government, and using student choice to help
decide the fate of higher education institutions.
Welcome and introductions:
Paul welcomed and introduced State Rep. Mary Liz Holberg,
Lakeville, assistant House majority leader and chair of the House Ways and
Means Committee. Holberg was first elected to the House in 1998 and is
now serving her seventh two-year term. She
served as chair of the Civil Law Committee in 2003-2004, and chair of the
Transportation Finance Committee 2005-2006.Before her election to
the Minnesota House, Holberg served first on the Lakeville Planning
Commission and then on the Lakeville City Council.
Comments and Discussion:
Holberg's discussion with the Civic Caucus the following points were
* House budgetary response just released--Holberg,
through whose committee, tax and appropriations bills pass, discussed the
response of the GOP majority in the House of Representatives to the
Governor's budget. The Governor proposed a $37.1 billion budget. The
House GOP leadership has responded with $34 billion, a 4.2 percent
increase in spending. The Governor's revised budget, not yet released, is
likely to be changed because the $37.1 billion hasn't been modified to
reflect a billion-dollar increase in forecasted revenues.
* Minnesota is slower than other states in
responding to smaller revenue growth--Holberg said she was
present a meeting in Chicago two weeks ago with legislators from others
states and learned that Minnesota is further behind in undertaking
structural reforms that respond to tightened revenues.
* Structural reforms urgently needed in
to a question, Holberg said reforms are urgently needed in human services,
where the state needs to begin paying for results, or outcomes, and to
stop just reimbursing vendors for delivering services. A prototype for how
the state might start paying for results is contained in a recent change
made in General Assistance Medical Care (GAMC), which covers poor single
adults, she said. The change in GAMC provides lump sum payments to trauma
hospitals for care of poor single adults, with the expectation that the
hospitals would work to keep individuals healthier, thereby avoiding
expensive trips to the emergency room.
she's seen extensive evidence--even in her own extended family--of cases
where the state keeps paying again and again for human services that prove
to be ineffective. She said she's impressed that non-profit providers have
been approaching the Legislature this session with new ideas for paying
* Local option sales taxes might be
considered--Responding to a question, Holberg acknowledged the
House majority budget plan involves considerable reduction in state aid to
cities. It's possible, she said, that some kind of local option sales tax
via referendum might emerge to offset loss of state aid. However, this
option isn't as easy to accomplish as might appear at first blush. Without
any fiscal disparities adjustment, certain retail-rich cities would
receive much more revenue from local sales taxes than would cities without
large shopping complexes.
* Does the state recognize the value of
relying on revenue sources that are deductible on federal income taxes?--A
Civic Caucus member noted that state income taxes and property taxes are
deductible from federal income taxes, meaning that, in effect, the federal
government helps citizens pay for income and property taxes imposed within
states. But sales taxes aren't deductible.
* Mal-distribution of
state aids to cities--Returning to the question of reducing Local
Government Aid (LGA) to cities, Holberg said because of the historical way
in which LGA is distributed, only one-half of the citizens in the state
receive LGA benefit now. A reduction in state aid isn't automatically made
up by dollar-for-dollar increases in local property taxes, she said.
Usually, not more than one-half of such reductions are made up by property
tax increases, she said.
* Cities stressed for funds make
necessary decisions--Holberg noted that her community of
Lakeville receives no LGA. Last year, pressed by lack of funds, Lakeville
had to close one-half of its outdoor skating rinks. Meanwhile, St. Paul,
which receives LGA was building rinks. She contended that communities that
receive substantial aid from the state are not as prudent in the use of
* Balancing the need to promote growth
with the need to hold down spending--A Civic Caucus member
observed that a balanced approach is needed so that cities can invest in
projects that promote growth while also avoiding high spending.
* Channel higher education dollars where
opportunity for subsequent employment is favorable--It doesn't
make sense, Holberg said, for the state to subsidize higher education
courses in fields with few job opportunities for graduates. There's much
better potential to channel limited higher education dollars where jobs
are more plentiful, such as high technology, biotechnology, or
nanotechnology, she said.
* Should any campuses be closed?--Holberg
acknowledged a particularly difficult task facing the Legislature over
whether to close low-enrollment higher education campuses. A local
college inevitably is an important source of jobs for the community.
Perhaps, she said, Minnesota might consider an equivalent to the practice
Congress follows in closing obsolete military bases. In that case, she
said, a commission makes the closing decision, subject only to a
larger state grant-in-aid program, students will help decide the fate of
institutions by their decisions of where to attend, Holberg said.
* Tough choices on transit need to be
made--The Legislature faces a tough decision on where to find
dollars to cover operating expenses for transit that don't come from the
fare box, Holberg said. She anticipates that the state will put the
brakes on new light rail lines. The North Star commuter rail line is
under-performing. Holberg believes it's much smarter to invest in Bus
Rapid Transit (BRT) as already in place on 35W and as being built on Cedar
Avenue north from Lakeville.
* Establishing a vision for the state--It's
very difficult in the stress of tight budgets to talk much about a vision
for the state, Holberg said. The current message from the House majority
a vision for creating jobs. Thus the state isn't going to raise taxes.
* Potential for private investment in
human services--She's attracted to the idea of stimulating
private capital investment in human services, as contemplated in the
proposal by Steve Rothschild for human capital bonds.
* Setting priorities on K-12 education: what
works--Asked about K-12 education, the largest piece of the
state budget, Holberg said the Legislature needs to invest limited dollars
in those areas of demonstrated accomplishment. She hopes for significant
investment in the lower grades.
behalf of the Civic Caucus, Dan thanked Holberg for meeting with us today.