Party chair splits with House GOP on what to do with surplus

The Republican Party of Minnesota is launching a $150,000 advertising campaign to encourage Gov. Mark Dayton and the Legislature to use the state's entire budget surplus to cut taxes.

It's not news that Republicans want to cut taxes, but the ad campaign runs counter to plans put forward by leaders in the Republican-controlled House. They want to use some of the surplus to fund schools, transportation and long-term health care.

The message in the Republican ad is simple. In 2013, Dayton and the DFL-controlled Legislature increased taxes on the state's wealthiest earners by roughly $2 billion. They raised income taxes on individuals who make at least $150,000 a year and couples who make at least $250,000.

Now that the state has a $1.9 billion surplus, it's time to return that money, Republican Party Chair Keith Downey said.

"Democratic politicians overcharged Minnesota taxpayers," Downey says in the ad. "The Democrats could keep it, spend it or send our fair share back. The Republican Party of Minnesota says sent it back. Send it all back."

Downey has not said how the state should distribute the surplus. In a news conference to announce the ad, he said it wasn't up to him to determine the specifics of the tax cut but insisted that the entire surplus should be returned to taxpayers.

But that's not what GOP legislative leaders want to do. When the $1.9 billion projected budget surplus was announced last month, House Speaker Kurt Daudt promised to use half of it for tax cuts, but also said he wanted to spend more money on schools, nursing homes and transportation.

When asked about the different Republican messages, Downey downplayed any differences in philosophy with Daudt.

"There's literally hundreds and hundreds of bills that have been dropped in from both Democrats and Republicans, and so I think until Republican budget targets come out, it's impossible to say what the House Republicans' position is going to be."

"We may give more of it back." Daudt, R-Crown, said when asked about the ad. "We're still working on that."

Daudt said he believes that they can return the entire surplus in tax cuts and spend more on K-12 education, nursing homes and transportation. By doing that, House Republicans would have to cut funding to some existing programs.

But state Rep. Kelly Fenton, who served as a Republican Party officer from 2011-2013, is puzzled by the ad.

Fenton said the party should be paying down its debt instead of running TV ads. The latest campaign finance reports show the party is more than $1 million in debt.

"I was very disappointed to learn last week that the current administration has some vendors who are owed hundreds of thousands of dollars for the 2014 campaign work," said Fenton, R-Woodbury. "I'm puzzled by them spending money on a campaign instead of looking at how they can pay the vendors and bring their budget out of the red."

Downey said the party has made good progress in retiring its debt and said the debt and the ad are unrelated.

DFL Party Chair Ken Martin was happy to highlight the split among Republicans over how to use the surplus. He said Downey's decision to run the ad is shortsighted.

"His insistence on ideological purity pits him against fair-minded Republicans who are trying to do the job that they were sent to St. Paul to do," Martin said. "Who's in charge here? Is it the Speaker of the House or the chairman of the Republican Party?"

Daudt told reporters last week that the Republican caucus will release its budget outline later this month. Dayton said he'll release his supplemental budget next week.

Earlier this week, Dayton said he also was puzzled by the Republican ad. The governor, who challenged House Republicans to reveal more about their budget plan, said the current GOP talking points on the budget "don't add up."

"We're halfway through the session and it's just been a free ride with their little potpourri of this, that and the other with no cohesion to it and no sense of fiscal responsibility whatsoever," Dayton said. "I'm waiting with bated breath."