News Release: Journalist Bob Carney Jr. releases "free download spreadsheet" -- first comparison of comprehensive budget priorities of the three main candidates for Governor of Minnesota -- data from TPT's "Budget Slap Shot" series, spreadsheet allows users to edit candidate budgets

• System shows Emmer slaps for "deep, drastic cuts" for HHS, up to $7.7 billion

• Emmer shoots for other deep cuts; but a $2 billion+ increase for Agriculture/Veterans

• Surprise: Horner favors deep cuts to education, big increase for HHS

• Dayton's still the goalie -- stops most changes to the current budget score

Contact: Bob Carney Jr. -- (612)-824-4479 (home and business)

                                          (612)-710-2212 (cell)

Note: please use this e-mail temporarily -- bobcarneyjr@msn.com

My e-mail address at republicancontract currently has technical problems -- Bob

Note: if you prefer to receive news releases at another e-mail address, please let me know -- Bob

For an archive of all news releases, and more information, please visit: www.republicancontract.com

Minneapolis, MN, August 17, 2010 -- Journalist Bob Carney Jr. released a free download spreadsheet today, with comparisons of comprehensive budgets of the three major candidates for Governor. The spreadsheet model is based on the responses of the three candidates to Mary Lahammer's "Budget Slap Shot" series, from Almanac, on Twin Cities Public Television ("TPT").

Carney has recently described himself as a candidate-journalist. Minnesota voters deleted the "candidate" part -- at least temporarily -- in the August 10th Republican primary for Governor. Carney finished second to Republican endorsed Tom Emmer, with about 10,000 votes, 8% of the GOP total statewide. Carney is now focusing on his role as journalist.  He is also continuing his campaign for a Republican replacement candidate for Tom Emmer this fall.

TPT's "Budget Slap Shot" and Carney's spreadsheet system

"TPT's 'Budget Slap Shot' isn't a perfect process -- but it appears to be the only time Tom Emmer has provided a comprehensive budget of any kind. As my news spreadsheet system clearly demonstrates, the data from this series is something we can work with," Carney said. A screen shot of part of the summary page is shown below:

Carney's spreadsheet model starts with each candidate's allocation of 100 hockey pucks (one percent each), per the TPT "Budget Slap Shot" series, to the State's main budget categories. The allocations are adjusted for uniformity, and then linked to the Minnesota Management and Budget Office's General Fund budget data for the next biennial budget. The result is a translation of each candidates puck allocations into dollar amounts representing cuts and increases. Carney's spreadsheet model can be downloaded from Carney's news and information web site, www.republicancontract.com. Click on the Free Download: "Minnesota Budget -- Puck Bucks" link, near the top center of the home page.

Carney said adjustments were necessary to build the model. Responses from the candidates are subject to some interpretation. The model contains alternative scenarios for Emmer, based on different possible interpretations of his responses. The adjustments are summarized on the Introduction page, and further detailed on other spreadsheet pages. Users of the model can adjust the candidate's puck allocations, and see the effects immediately.

Carney's professional background includes many accounting and financial modeling projects. In 1987, Carney developed on a contract basis a Lotus financial model for First Bank (now U.S. Bank) to standardize the bank's evaluation of all technology purchases. "Right in the middle of that project, the bank lost $300 million from bond speculation, the President resigned, and ten percent of all employees were let go. Out of forth IT contractors in Saint Paul, I was the only one who survived -- they only kept me because my project was of crucial strategic importance to the bank. They were right -- my financial system was the centerpiece of the financial turnaround at that bank," Carney said. Carney has also taught MS Office courses at the post secondary level.

Model assumptions and main results from the candidate's responses

All comparisons are to the Fiscal Year 2012-13 budget -- the first budget the new Governor will have a role in shaping. The current Minnesota Management and Budget ("MMB") projected deficit is $5.8 billion. Based on the "Budget Slap Shot" sessions, Emmer plans to close the gap entirely with spending cuts, while Mark Dayton and Tom Horner plan to close the gap entirely with new tax revenue. The current MMB budget -- and deficit -- includes a $1.371 repayment of K-12 money that was deferred from the current biennium. Schools were forced to use their own reserves to make up for this money. Realistically, it is quite likely most or all of this unalloted K-12 money will be deferred again, beyond the next budget. A 100 deferral beyond the next budget would reduce the deficit to $4.4 billion. If the full $1.371 deferral is kicked further into the future, the practical, operational spending trend for schools would continue to increase slightly, although depleted K-12 reserve funds would not be restored.

. . .

Here are the main results from the candidate's responses:

Emmer -- There's no way to make a $5.8 billion cut look pretty -- but there's lots of ways to make it look really bad for some groups. The main impacts are:

• Health and Human Services: Very deep, drastic cuts -- This category clearly appears to be Emmer's main target for savings. The results from the four scenarios for Emmer range from cuts of $3.4 billion, to $7.7 billion -- the higher number represents a cut of almost two thirds of the entire HHS budget. For all four scenarios, Emmer would spend less than the current biennium budget before unallotments.

• Education: Major cuts for K-12 and higher education. If all of the unallotment deferral money is deferred again, Emmer's four scenarios show reductions from $143 million to $614 million -- a manageable range. If all of the unallotment deferral money is included in the deficit -- as in the MMB budget -- the operating budget for the schools would drop by $1.5 billion to $2.0 billion. Emmer lumped K-12 and higher education together.

• Local Government Aids: Deep to very deep and drastic cuts -- Three of Emmer's four scenarios are in a range of $1.0 billion to $1.5 billion in cuts -- percent cuts of 30% to 44% from the MMB budget. A fourth scenario, based on legislative overrides of cuts other than HHS and Education, results in a cut of $449 million, or 13%. This category is clearly the second of Emmer's top two target areas for cuts.

• Agriculture & Veterans: A huge increase, about $2.3 billion... about 1,000%, based on the main scenario, using Emmer's "raw" puck allocation for this category. Lahammer noted that Emmer did his exercise at a time when he was (wrote Lahammer): "trying to corner Dayton on veterans issues and emphasis the importance of his plan including a tax break for vets." Another possible explanation is that Emmer's call for tillable land is part of a looming rural version of Emmer's "tips credit," -- but with an economic and political impact many times larger. At this year's Farmfest, Emmer said: "First off, tillable land... should not be supporting every other service that a municipality or that government provides. So you gotta make sure that that gets changed." Unlike the "tips credit" issue, the negative impact is diffuse, not focused on a specific group (servers and bartenders). The positive impact, however, appears to be targeted, and to offer the potential for a major political payoff for Emmer. According to preliminary information from the Minnesota Department of Revenue, class 2a farm land, which includes tillable and other land like pastureland, pays about $400 million in gross property taxes before credits. The MDR estimates $46 million, about 12%, was paid by "green acres" property. Emmer's proposals for tillable land merit close study and research.

• Public Safety: Another very big increase -- $2.2 billion and 222% above the MMB budget. Making this area a priority is consistent with Emmer's philosophy.

• State Government: A big increase, $801 million, and 219% above the current MMB budget, according to Emmer's "raw" puck allocation. Given Emmer's stated determination to cut government, and his preference for local government, this line item allocation is difficult to explain (it could be an error).

• Overall: Emmer's thrust appears to be against the "party of government" constituency, against the central cities, and for the suburbs, exurbia and rural Minnesota. His agenda represents a kind of earthquake -- major changes in multiple areas. If the DFL retains a majority in both houses of the Legislature, the huge gaps between Emmer and the DFL would almost certainly be "unbridgeable" -- far beyond the range of possible compromise. In "Think you've heard last of unallotment?" -- a July 23rd Star Tribune Commentary article -- Carney provided an analysis of Emmer's possible use of unallotment to force his policy agenda through. The budget gap would inevitably trigger an incredible political battle -- and possibly a constitutional crisis -- in the next legislative session. A critique of Emmer might be: his determination to effect major, across the board policy changes, and his lack of concern for how this is accomplished, is a recipe for extreme confrontation and gridlock if he were elected, and for a Republican political disaster as more Minnesotans find out what he actually thinks and what he really wants to do. A response to this critique might be: "This is the first time Minnesota has had a chance to vote on a real, fundamental, across-the-board change in direction. Minnesota voters deserve to have this question put to a vote at least once." A further rebuttal might be: "OK,... what's the plan? Where are the details?"

  . . .

  Dayton -- All new taxes... the Legislature may modify the "tax the rich allocation." The main impacts are:

• Health and Human Services: Cuts, but still a significant increase from the current budget's spending before unallotments. This category appears to be one where Dayton thinks some economies can be achieved. The MMB budget includes payment for an early opt in to Medical Assistance -- this would bring in about $1.4 billion in new Federal money to Minnesota. That new money coming into the overall health care system will have a multiplier effect on the Minnesota economy, and will make it possible for the HHS sector to absorb some budget cuts.

• Education: An increase, even after full repayment of the unallotment deferral money. This area is clearly a priority for Dayton. During the negotiating process it is likely at least some of the unallotment money will be deferred again. In any case, the operating budgets for education would be likely to increase if Dayton is elected. Because Emmer lumped K-12 and higher education together, numbers for Dayton and Horner are also lumped together for comparison.

• Local Government Aids: A significant increase, $411 million; 112% of the MMB budget. This area has been hit hard in recent years. Dayton appears to want to take some of the pressure off cities.

• Overall: Dayton's thrust appears to be mostly smooth sailing, and corrections for past cuts he thinks are too deep. There appears to be no significant change in priorities other than some efficiency based cuts for HHS, and partial restoration of Local Government Aids. A critique of Dayton's approach might be: "tax the rich" will drive people away from Minnesota -- Dayton's policies represent an across-the-board commitment to "grow the party of government," and all its various constituencies -- at the expense of a private sector that is already suffering disproportionately.

  . . .

  Horner -- All new taxes... some major priority shifts. The main impacts are:

• Health and Human Services: A $757 million increase, 6% above the MMB budget. This is somewhat surprising, because the MMB budget already projects a very large increase of $2.8 billion -- 30% above spending for current biennium before any unallotments. Horner is a retired Public Relations executive, and he has consulted for Minnesota hospitals. Dayton, and others, have called for Horner to release his list of former clients, which could include organizations that would benefit from Horner's support of high HHS spending.

• Education: A surprise -- major, deep cuts for K-12 and higher education -- deeper cuts than Emmer. If all of the unallotment deferral money is deferred again, Horner's budget would still show a reduction of $1.3 billion. This represents a direct reduction for the operating budgets of K-12 and higher education. If all of the unallotment deferral money is included in the deficit -- as in the MMB budget -- Horner's cut for education is $2.7 billion. Because Emmer lumped K-12 and higher education together, numbers for Dayton and Horner are also lumped together for comparison.

• Local Government Aids: A significant cut, $362 million and about 90% of the MMB budget. This area has been hit hard in recent years. Horner's budget would continue the trend of putting financial pressure on cities.

• Transportation: A major increase from the General Fund, $980 million and 644% above the MMB budget (Horner's three pucks to Dayton's one.) Horner has identified public transit as a priority. This represents his commitment to invest in infrastructure.

• Environment: A one puck difference -- Horner's two pucks to Dayton's one, translates to a huge increase of $408 million, 224% of the MMB budget. This is a signal that Horner is an environmentalist.

• Economic Development: Another one puck difference -- Horner's two pucks to Dayton's one. This is another signal -- economic development is a priority for Horner.

• Overall: Horner and Dayton want to raise taxes to close the entire deficit. However, while Dayton favors the status quo, Horner's budget includes significant changes in priorities. Horner's preference for more HHS spending is questionable given his apparent but unverifiable background of consulting for clients in that sector. Leaving HHS aside, Horner's priorities for both spending and taxing appear to favor economic growth and a reluctance to drive out high income earners.

  . . .

Update on Carney's activities:

Carney has been describing himself as a candidate-journalist. As noted, Minnesota voters deleted the "candidate" part -- at least temporarily -- in the August 10th Republican primary for Governor. Carney finished second to the endorsed candidate, Tom Emmer. Carney received about 10,000 votes -- about 8% of the statewide total in the primary. "Considering that I started as an 'unknown' -- with no money, and facing virtually unanimous opposition from Republican party officials -- I think the result is impressive, and something to build on," Carney said.

"The 'journalist' part will be more difficult to delete," Carney said. Carney is continuing his Tom and me video series, but is renaming it: Tom (and Mark and the other Tom) and me. The videos are on www.youtube.com (bobcarneyvideos), and can be viewed at www.republicancontract.com.

Carney maintains that his news releases to date, and going forward -- and services like the download spreadsheet he is providing -- are journalism.

"I don't know of anyone else who has put together a comprehensive summary of the budgets of the three candidates, allowing comparisons and modifications. This is journalism... it is a valuable public service," Carney said.

Carney invites anyone and everyone to call or e-mail him with questions or comments about the financial model.

Carney received notice from the Minnesota Court of Appeals of an October 6th, 2010 nonoral conference on his unallotment lawsuit, defending the Political Contribution Refund program. Carney plans to file a motion for an earlier conference.

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