But the move would also bring hemp-product oversight to the Office of Cannabis Management right away and allow the medical cannabis office to concentrate on what its name implies — medical cannabis.

How raw cannabis flower is regulated under the recreational marijuana law passed last May was called into question late last year when medical cannabis regulators said they lacked legal authority to regulate it. That has allowed some registered hemp retailers to sell raw flower, often sold under the label THCa, that might be legal hemp but might also be illegal marijuana. While it is already legal to possess marijuana, and adults can grow a few plants for personal use, it won’t be legal to sell it outside of tribal reservations until the state issues licenses next year.

Without legal authority to inspect, the medical cannabis staff can’t test the potency in order to be sure. Police departments could take enforcement action, but most are reluctant to regulate what is now a state job with mostly civil rather than criminal sanctions.

So the Office of Medical Cannabis has the inspection teams already in the field working with hemp retailers but without the authority to test and sanction sales of raw flower that might be illegal. At the same time, the Office of Cannabis Management has clear legal authority over raw cannabis flower but does not yet have its inspection and enforcement operations in place.

During a webinar last Wednesday to describe the Office of Cannabis Management’s (OCM) progress toward retail sales, Briner called the regulatory gap “an interesting dynamic.”

“Accelerating the transition and bringing over the enforcement team from the Office of Medical Cannabis, bringing them over to OCM as early as July 1, 2024, helps us better integrate those operations (and) develop additional consistency in our enforcement approach,” Briner told the nearly 500 people watching the webinar.

This would be the second step Briner’s office has taken to respond to concerns from some hemp-derived retailers that there are retailers working on the edge of what is legal. That is, they are selling raw cannabis flower that can be smoked or vaped as a legal product when it could, in fact, be illegal.

After the Wednesday webinar, Briner said bringing medical cannabis inspectors over to OCM early isn’t being done solely to help close the enforcement gap.

“The early transition is something we’d identified as making sense from a capacity building and alignment perspective well before the issue around raw flower had really even been identified,” she said via email. She described that transition and the previously announced move toward interagency agreements as a both/and approach.

Regarding those agreements with the medical cannabis office and the Department of Agriculture that regulates hemp as a farm product, Briner said “we’re in the process of executing them as we speak. AND we are pursuing the early transition of the hemp-derived team at (the Minnesota Department of Health) to help build OCM’s foundational capacity – not because of any “loophole” but because they’re coming over anyway so bringing them on board earlier just helps us better align efforts.”

Why all the confusion? The new law approved last May assigned to the Office of Medical Cannabis the temporary job of regulating both medical marijuana and hemp-derived products that were legalized in 2022 without a robust regulatory system. Under federal and state law, cannabis plants are considered hemp if they contain 0.3% or less concentrations of the intoxicating compound THC. At those levels, the plant is not intoxicating even when burned. Hemp-derived products go through processing to enhance the THC content so as to produce an intoxicating effect.

But because the raw flower being sold isn’t processed, the Office of Medical Cannabis believes it lacks authority to regulate it, hence the needed law change to accelerate the Office of Cannabis Management’s regulation of the product.

This raw cannabis flower problem is a temporary one. Once retailers are licensed to sell marijuana next year, the questionable products will likely be legal to sell. But until then, no one outside tribal reservations can sell raw flower that crosses the potency line between hemp and marijuana.

The Clean Transportation Standard (CTS) Work Group was established within the transportation omnibus bill passed by the Legislature this past spring. The 40-member work group was put together and managed by the state’s Agriculture, Commerce, Pollution Control and Transportation agencies.

While a majority of the work group agreed with its recommendations, some members united to release their own report, which outlines why a standard will have negative environmental impacts.

The report

The report issued by the group found that carbon intensity reduction targets set by legislation may be too difficult to achieve based on the market and current clean fuel technologies. Modeling done by the work group showed that the state would only see a 30% reduction in carbon intensity by 2050 in a business-as-usual case study, and the goal of 100% reduction by 2050 would only be possible through aggressive policy making efforts.

“The work group learned from state program leaders in Oregon and Washington that it will be important for the Legislature to strike a balance between ambitious targets that encourage decarbonization and a program that can achieve compliance,” the report reads. “Therefore, the work group considered alternative targets and goals.”

The report recommended that the 2030 target of 25% reduction be lowered to a 13-17% target, and for the 2040 target be lowered from 75% to 40-50%. The group also recommended 100% reduction for 2050 be changed from a target to a goal.

“Even if the goal posts of the carbon reduction targets shift during the legislative process, what is important is that Minnesota can and should lead the building of a national model that can not only address climate change but also support jobs and drive economic growth in Minnesota’s rural communities,” said Brendan Jordan, vice president for Transportation and Fuels at the Great Plains Institute, said in a statement.

The Great Plains Institute is facilitating the Minnesota Future Fuels Coalition, which includes electric utilities, environmental and agriculture groups, among others.

The minority report

Members of the work group from four organizations – the Sierra Club’s North Star chapter, CURE, Healthy Professionals for a Healthy Climate and COPAL – released their own report alongside the state agencies’ report, expressing concern about the work group report’s recommendation to incentivize ethanol production and its use.

“The whole CTS work group report is based on the presumption that ethanol is helping the climate when in reality, ethanol likely pollutes the climate at least 24% more than just using plain gasoline and pollutes our water in the process,” Peter Wagenius, the Sierra Club’s legislative director, said in an interview. “If you operate on the false assumption that ethanol is better than gasoline, that’s a problem.”

Wagenius said the work group report didn’t focus enough on electrification and promoting electric vehicles. Electric motors are more efficient than combustion engines, and the electric grid is already improving with respect to integrating renewable energy sources, he said.

The minority report also takes issue with carbon capture and storage mentioned in the main report due to the potential for the captured carbon to be used in a process called enhanced oil recovery, where CO₂ is pumped into old oil wells to push more oil out. The CTS report does not recommend facilitating enhanced oil recovery, but the minority report argues capturing emissions from ethanol plants ensures continued availability of carbon.

“If we turn carbon dioxide – the pollution from an ethanol plant, into a product – that creates a perverse economic incentive to never stop polluting,” Wagenius said. “If you’re making money from it, why would you reduce it?”

Cenk Uygur, a naturalized citizen born in Turkey to Turkish parents, is among nine names that state DFL Chairman Ken Martin placed on the party’s primary ballot. The U.S. Constitution requires that presidents meet just three qualifications: be at least 35 years old, have lived in the U.S. for at least 14 years and be a natural-born citizen.

Other states, including Arkansas, New Hampshire and Nevada, have rejected Uygur’s candidacy. Last month Uygur challenged the South Carolina Democratic Party’s denial of his access to that state’s Saturday primary ballot. A federal judge rejected his claim that the due process clause and equal protection clause of the same Constitution overrode the presidential eligibility language.

Uygur is a left-leaning Democrat of the Bernie Sanders segment of the party who has an online political commentary show called “The Young Turks.” 

In a statement, Martin said he was following legal advice.

“Our lawyers advised us that it was better to allow candidates to appear on our primary ballot until a court determines that they are ineligible,” Martin said. “We also believe in erring on the side of ballot access — which is why we don’t require fees or petitions to get on the ballot.

Under the Minnesota presidential primary law, the state party chairs send a list of names that should be on the ballot to the secretary of state, who performs a ministerial function of creating the ballot but makes no decisions about which candidates appear.

Anna Mathews, the executive director of the Minnesota Republican Party, said the party requires those who want to be on the ballot to fill out a form that — among other questions — asks if they meet constitutional eligibility criteria.

“It’s actually very odd to me that they would place someone like that on the ballot,” Mathews said. State parties do get requests from little known or unknown candidates and have to make judgments about whether they should appear. 

“But across the board, I think the very basic thing that hopefully everyone could agree on is following our Constitution,” she said. “That’s the bare minimum that is indisputable.” That said, both party chairs have complete discretion, and Martin can do what he thinks is right.

When Uygar was placed on Super Tuesday ballots in Minnesota, Oklahoma, Texas and Vermont, he said this: “Nothing is impossible. We told you we could get on these ballots — and we delivered. We’re telling you that we can knock out Joe Biden — and we’re going to deliver on that, too. We need the strongest possible candidate against Donald Trump.

“I asked the voters of these states to put me in the ballgame. And they just did. Now, it’s official — anything is possible!” 

Late last month another candidate on the Minnesota presidential primary ballot asked that voters not vote for her. Krystal Gabel of Colorado said she didn’t consent to have her name listed on the Legal Marijuana Now party ballot and asked voters not to give her their vote.

The presidential qualifications clause has been interpreted to define “natural born” to include people born in other countries to citizens of the U.S. The late-Sen. John McCain was considered naturally born because, despite being born in Panama, his father was a U.S. Navy admiral stationed there.

Whether a candidate who is ineligible to be president should be denied access to a state primary ballot was the central legal question in litigation last year brought by a bipartisan group of Minnesota residents, including prominent Democrats. Because former President Trump engaged in insurrection against the United States on January 6, 2021, the petition claimed, he is not eligible to be president again under Section 3 of the 14th Amendment. That ineligibility required the secretary of state and then the courts to strike his name from the ballot.

The Minnesota Supreme Court denied the petition, deciding that the primary is a party event and that the party must be allowed to decide who appears on its ballot. Should Trump be nominated by the Republicans this summer, petitioners could make another request regarding the general election ballot, the justices stated.

But a similar case out of Colorado is now before the U.S. Supreme Court.

Minnesota is now the state with the nation’s most-progressive tax system in the U.S., as calculated by the left-leaning Institute on Taxation and Economic Policy. Its data-driven assessment looks at the share of state taxes that are borne by various income groups. Progressive is defined not in partisan terms but to describe tax systems that have higher income taxpayers devoting a larger percentage of their incomes to taxes than lower-income taxpayers.

For example, the lowest 20% of Minnesota taxpayers are required to pay 6.2% of income in all state taxes, while the top 1% pays 10.5%. Looking only at the personal income tax, from which the state collects more than half of its revenue, the lowest 20% pays none — either because incomes are too low to require it or because of refundable tax credits people receive, effectively erasing the income tax. The top 1% of Minnesota earners pay 7.5% of income in state income taxes.

“Nationally, comparatively high tax rates on low-income families remain the norm, despite recent steps to lower taxes for this group by bolstering refundable tax credits,” the report states. “Only six states and the District of Columbia now reserve their lowest overall tax rates for low-income families. Those states are Maine, Minnesota, New Jersey, New Mexico, New York, and Vermont.”

The regressivity of most other states — especially those without individual income taxes that rely heavily on sales taxes and other regressive assessments — might set a low bar for reaching No. 1.

What changed? The 2023 taxes omnibus bill adjusted how state taxes impact both the highest earners and the lowest earners. While the House DFL taxes bill would have created a new tax bracket for the highest earners — the so-called 5th tier — the Senate DFL disagreed. A compromise bill eliminated some state tax deductions for the highest earners, exposing more of their income to the current 4th tier. Mark Haveman, the executive director of the business-supported Minnesota Center for Fiscal Excellence, called those changes a backdoor 5th tier, because he notes that it impacts more taxpayers than the House 5th tier proposal would have.

The 2023 session also created a net investment tax assessed on interest, dividends, capital gains, rental and royalty income, and other similar income that exceeds $1 million a year.

On the other end of the income chart, the tax bill made a handful of changes that would reduce taxes paid by lower-income residents. The largest is an increase in the child tax credit, a refundable tax credit that helps families with children, that is worth $1,750 per child. Refundable means that even taxpayers who owe no taxes benefit by getting checks from the state equal to the amount of the credit.

“I think a huge part of this story is tax-credit changes,” said Neva Butkus, a state policy analyst for the tax policy institute. “Minnesota passed the most-extensive, state-level tax credit in the nation. That credit was so targeted to really ensure that lower-and-middle income households are getting additional supports to make ends meet.”

Butkus noted that Minnesota continues to rely on taxes that are regressive — sales taxes and property taxes especially. The treatment of income taxes, however, “counteract the more-regressive aspects of Minnesota’s tax system, things that tend to hit low-and-medium-income families harder.

States at the other end of the scale tend to be states without an income tax or with low-progressivity income tax. Florida is 50th on the list, surpassing Washington state which is now 49th. Seattle Times columnist Danny Westneat jokingly celebrated that the state was no longer the worst, though still of little comfort for low-income people.

Butkus said that even Minnesota and the other top 10 states do not have “a truly progressive system.” The states that are considered to have the most-progressive income taxes still have somewhat flat systems — that is, they take close to the same percentage of income from taxpayers across the income spectrum. The regressive states take higher percentages from lower incomes families than the top earners.

Butkus said sales taxes and property taxes have a place in state tax codes because they help stabilize tax collections through economic downturns.

The Minnesota Department of Revenue conducts what it calls a tax incidence report on the state tax system that will include the changes made last May. That report conducts an analysis similar to the institute’s study to show how state taxes are distributed across income groups. It is expected to be released March 1.

While not part of the Institute on Taxation and Economic Policy study, which looked at tax impacts on individuals and families, Minnesota also climbed in one other tax measure: corporate taxation. The conservative Tax Foundation reports that of the 44 states with a corporate income tax, Minnesota’s 9.8% top marginal rate is the highest. But it claimed the superlative not due to any legislative changes but only after a pandemic-era surcharge in New Jersey expired.

“Minnesota has among the worst pre-tax racial income inequalities in the nation. Minnesota’s progressive income tax system narrows this gap somewhat, but we should do more to unleash the power of the tax code to advance racial equity,” the report states.

The budget project added that fairness is only one measure for a tax system, with adequacy being another. That is, does it raise enough money to pay for services? 

“Minnesota has taken an approach to tax policy that has paid off for the residents of our state, and there is still work to do to create a more equitable tax system that sustainably funds the public services Minnesotans want and count on,” wrote the budget project.

Gov. Tim Walz and DFL leaders celebrated the 2023 budget, along with other legislation, as transformative and historic. The current budget is 40% higher than the previous two-year budget. And while some of that is one-time spending, fueled by a record $17.5 billion surplus, the next budget will be significantly higher than the 2021-22 budget. The tax increases noted above are permanent.

The state economic and revenue forecast in December reported that the state will have just $2.4 billion left over when the current, $71 million budget runs its course on July 1, 2025. Because some of the spending does not carry over to the 2025-26 budget, the state would need $66.2 billion to cover ongoing costs. But current taxes are only expected to raise $64 billion over that same time, leaving what budget managers called a “structural imbalance.”

Both Walz and DFL legislative leaders urged restrained expectations for budget and taxes for the session that convenes Feb. 12.

“I’ll tell the Legislature, we did a lot of great work last year. It’s time to implement that,” Walz said after seeing the forecast. “It will have a positive impact on workforce development, on housing, on the environment. But we need to be measured, we need to be cautious. This is not the year.

“If we’re cautious on this we balance out in the out years,” Walz said. 

Minnesota Management and Budget must produce a new economic and revenue forecast later in February, and it is that forecast — expected the last week of the month —  that will drive any supplemental budget and tax bills.

Trump held fast to his core GOP supporters, winning the backing of about 74% of the Republicans who voted, according to a CBS exit poll. Meanwhile, Haley was much stronger than Trump with moderates, independents and younger voters.

The other loser Tuesday night was Rep. Dean Phillips, D-3rd District, who was trounced by a write-in campaign for President Joe Biden, whose name was not on the ballot because New Hampshire Democrats did not adhere to their party’s new primary calendar.

The Minnesotan, however, considered his performance in New Hampshire in a positive light, saying he’d only been campaigning for about 10 weeks, and vowed to continue his long-shot bid.

Phillips told The New York Times earlier this week that he would consider running as a third-party candidate, with the centrist No Labels movement. But the congressman has seemed to back off of that idea, which would have threatened Biden by siphoning the support of some moderates and independents who are leaning toward the Democratic Party.

Phillips says he is determined to win the Democratic nomination for the White House.

Minnesota holds its presidential primary on Super Tuesday, March 5, when the greatest number of states hold their primaries and caucuses. Early voting has already started in Minnesota. But to many in the nation’s capital, the primaries are over and the rematch between Biden and Trump has begun in earnest this week.

Stauber pushes back on bridge controversy

Rep. Pete Stauber, R-8th District, was plunged into controversy this week for doing what many lawmakers do — more often on the GOP side of the aisle. That’s praising the allocation of funding for a special project, in this case more than $1 billion for a new Blatnik Bridge, whose funding comes from a bill Stauber rejected.

The new Blatnik Bridge, which connects Duluth with Superior, Wisconsin, will be funded by President Biden’s massive infrastructure bill, which was rejected by most House Republicans.

“Make no mistake; a vote for this ‘infrastructure’ package is a vote for the reckless multi-trillion-dollar tax-and-spend spree. That’s why I voted NO,” Stauber said in a statement when the bill was approved in November of 2021.

But this week, Stauber said he was an advocate for money for a new bridge to replace a structure that was built in 1961.

That caught the immediate attention of Gov. Tim Walz.

“Oh boy. I hate to talk politics when there’s good news to celebrate but this is too brazen to ignore,” Walz posted on X. “Mr. Stauber voted against every screw, steel beam, and concrete pier in this bridge. Luckily @POTUS worked with Stauber’s colleagues and got it done without him.”

Other Democrats also called Stauber out for what they viewed as hypocrisy. 

Stauber is by no means the only lawmaker who has voted against a bill that funds a local project or program that that lawmaker supports and later takes credit for the funding of that project or program.

Former House Speaker Nancy Pelosi dubbed the phenomenon “vote ‘no’ and take the dough.”

Stauber tried to quell the increasing criticism directed his way and defend his position on the bridge in a video.

“I know it’s been a while since the president — and the governor — worked in Congress and maybe they need a refresher in the legislative process,” Stauber said.

The congressman said the first time the Minnesota Department of Transportation asked for money to repair and replace the Blatnik Bridge, which was built in 1961 and has since deteriorated, the state agency was rebuffed. 

MnDOT said that was not exactly the case. It said it had put in for funding for the Blatnik Bridge in 2022, but it did not make the infrastructure bill’s first round of funding for a number of transportation programs.

“U.S. DOT selected the Brent Spence Bridge that connects Kentucky and Ohio over the Ohio rivers (instead),” MnDOT said in an emailed statement. “In 2023, MnDOT applied for funding for the Blatnik Bridge … and was successful at securing federal funding (as announced today) from the INFRA program.”

The INFRA program is a competitive grant program for projects of national or regional significance that facilitates the movement of freight and people in and across rural and urban areas. 

Stauber did lobby for money for the bridge, joining Sens. Amy Klobuchar and Tina Smith in asking Transportation Secretary Pete Buttigieg for the money.

Stauber also signed a letter to Biden last year  —  also signed by Minnesota’s senators and Reps. Angie Craig, Dean Phillips and Ilhan Omar — in support of the Minnesota and Wisconsin Department of Transportations’ application for money to replace the bridge.

Biden traveled to the Blatnik Bridge — on the Superior, Wisconsin, side — on Thursday to tout the billions of dollars in local projects that will be funded by his infrastructure bill.

During a 25-minute speech, the president touted “Bidenomics” — taking credit for high employment and lowering inflation rates — and all the road and bridge projects his infrastructure bill has funded.

And about the necessity to replace the Blatnik Bridge, which cannot bear the weight of truck traffic any longer.

“For decades people talked about replacing this bridge, but it never got done. Until today. Until today,” Biden said.

Your questions and comments

A reader reacted to a story about Rep. Dean Phillips’s long-shot campaign for the White House with the following comment:

“It’s also worthwhile reporting on what constituents here in #MN03 think about our congressman going absent from Congress to campaign for president.”

I wrote about the impact the campaign would have on Phillips’ abilities to carry out his duties as a representative of the people in the 3rd District in early November. Since then, he has barely shown up on Capitol Hill, something that could tip the balance on key votes now that the GOP’s narrow majority has shrunk even further with the retirements of several House Republicans and former Rep. George Santos’ ouster.

Another reader also wrote weighed in on the Phillips campaign:

“… for me as a recent DFL delegate but not necessarily a party loyalist, I feel Mr. Phillips’s motivations lie more in personal glory than anything else. Despite his age, President Biden has put forth more effort and progressive reforms to strengthen this country and its shrinking middle class than any president since FDR.”

Please keep your comments, and any questions, coming. I’ll try my best to respond. Please contact me at aradelat@minnpost.com.

That’s the conclusion of the Office of Legislative Auditor that reviewed the September appointment of Erin DuPree to be the state’s first-ever cannabis czar. Walz had admitted previously that the appointment was not “the finest hour” of his administration. He has yet to fill the vacancy.

The report concluded that the governor’s office and the Bureau of Criminal Apprehension failed to include the state Department of Revenue in its checks into DuPree’s background. Such an effort would have shown that DuPree had unpaid tax liens and outstanding court judgements related to previous businesses.

The governor’s staff then reviewed the summary of the report, and not the full report, before the appointment was announced. The full report would have let the staff know that no checks of Revenue records were conducted.

“The Office of the Governor and Lieutenant Governor departed from its Standard Operating Procedure for Executive Director Appointments in its process for selecting Erin DuPree as the Director of the Office of Cannabis Management,” the report signed by legislative auditor Judy Randall concluded. “Three differences from the Standard Operating Procedure, in particular — all related to the background check — contributed to Governor Walz appointing Ms. DuPree as Director of the Office of Cannabis Management without having full and complete information.

“OLA considers this matter closed and will not conduct a special review,” Randall wrote.

Also Wednesday, Walz reopened applications for the job and said it would use a professional recruiter from Minnesota Management and Budget to conduct a national search. Walz also made formal the appointment of Charlene Briner as interim director. Briner has been running the office since it opened last summer.

The auditor conducted the review at the suggestion of a “requesting legislator” without identifying who that legislator is.

DuPree’s tenure as the state’s first cannabis director was short. In the days after Walz announced the appointment, news coverage and complaints from others in the fledgling legal cannabis industry revealed that her hemp store in Apple Valley was selling products not authorized by state law. She also had financial problems with previous businesses that were not related to cannabis.

Walz said at the time that there were flaws in how his office conducted background checks on the finalists for the job.

“Not the finest hour,” Walz said during a September program at MinnPost Festival in Minneapolis. “In this case the process did not work, and we got this wrong.”

Walz said he wanted to pick someone who understood the fledgling industry in Minnesota. But he said people expect regulators will “follow the rules.”

“I own this one, we’ll get the right person in there,” he said. Four months later, there is still no permanent director in the office, though several top positions have been filled and the office is proceeding with the necessary rulemaking. The first non-tribal retail sales are expected in March of 2025.

In her resignation letter to Walz, DuPree said she had “become a distraction that would stand in the way of important work that needs to be done.”

“I have never knowingly sold any noncompliant product, and when I became aware of them I removed the products from inventory,” DuPree wrote. 

When she announced the investigation, Randall said it appeared  senior Walz administration staff was unaware of DuPree’s background.

“The fact that she was appointed and then information came out that it appears that the governor’s office wasn’t aware of, that then caused the candidate to step down and the governor to acknowledge problems with the process, caused us to have questions about the thoroughness of the process,” Randall told MPR in October.

The audit released Wednesday notes the broad authority of governors to appoint top officials. And while governors are permitted to request criminal background checks, they are not required to.

Walz’s office asked the Bureau of Criminal Apprehension to look into the background of DuPree and one other finalist. Contrary to standard procedure, the governor’s staff only forwarded the request to BCA, assuming that the law enforcement agency would ask the Department of Revenue for help. It did not.

“Among other things, BCA’s background check included a review of criminal history, driving records, civil judgments, and employment history,” the audit stated. “It also included a review of credit reports and net worth. It did not include a review of all information maintained by the Department of Revenue. As a result, the BCA background check did not identify any unpaid tax liens.”

One reason for the errors could be that BCA “had never performed a background study for the Governor’s Office,” the audit states. “As a result, it is possible that some assumptions the Governor’s Office made about the background checks — such as assuming that BCA was reviewing Department of Revenue information — were incorrect.” 

BCA also “conducted the background check largely without the involvement of the Alcohol and Gambling Enforcement Division.”

The final failure was that the governor’s staff reviewed a summary of the background check that concluded the applicant did not have any noteworthy financial obligations or debts. But if the staff had waited for the full report, it might have noticed that the Department of Revenue was not involved in the report. They didn’t review the full report until Oct. 4, after the appointment had been announced and DuPree had resigned.

“In the end, Governor’s Office staff said they believed that they had the full and complete background information for Ms. DuPree when the Governor appointed her to be Director of the Office of Cannabis Management,” the audit states. As such, the audit recommends that future appointments wait for full background checks and not rely on the summaries.

In a response letter, Walz’s general counsel Mary Fee said the office actually used an enhanced background check for the cannabis director job, “a comprehensive Bureau of Criminal Apprehension background study, the same background review that BCA conducts on its own prospective agents.

“This background study is rigorous and takes weeks to complete,” Fee wrote. “However, there were several issues identified subsequently that were not included in the BCA review, and the Office was unaware that it lacked full information. 

“Immediately following the DOCM appointment, the Governor’s Office reviewed its processes and implemented changes, including, among others, the recommendations listed in your memorandum,” Fee wrote. “We’ve also increased Governor’s Office capacity for research about potential appointments.”

Besides reopening the cannabis director job, the office recently posted a new job for a senior policy adviser that will advise on cannabis policy, among other topics.

The audit details the process for filling the job considered key to a successful launch of the state’s recreational cannabis program:

• Twenty-five candidates met the minimum qualifications, and 10 of those 25 also met at least five of the eight preferred qualifications.
• Ultimately, 12 candidates were offered first-round interviews — the 10 identified through the review of minimum and preferred qualifications, and 2 additional candidates who were “recently separated veterans.”
• A panel composed of seven senior staff from the Office of the Governor and Lieutenant Governor, the Minnesota Department of Agriculture, Minnesota Management and Budget, and the Office of Cannabis Management conducted the first round of interviews.
• Based on the interviews, the panel forwarded the five top-scoring candidates to the second round.  One of the five candidates withdrew, and therefore four candidates moved forward to the second round of interviews.
• The second-round interviews were conducted by five senior staff (again from the Governor’s Office, Minnesota Department of Agriculture, and the Office of Cannabis Management), three of whom had also been on the interview panel for the first round of interviews.
• In addition to the interview, candidates who participated in the second round were asked to deliver a presentation highlighting their anticipated milestones and challenges during their first year in the role.
• The panel advanced the three top-scoring candidates to the third round.  One of the three candidates withdrew, and therefore, two candidates moved forward to the final round of interviews.
• The final interview panel included Governor Walz, Lieutenant Governor Flanagan, five members of the Office of the Governor and Lieutenant Governor (two of whom had served on the previous interview panels), and the Interim Director of the Office of Cannabis Management (who had moderated the first two interview panels).

The Met Council itself had already undergone the scrutiny of each of those variations and none resulted in substantive changes in how the regional transit, planning and wastewater treatment agency operates. Why would this task force do anything different?

“In my faith we start the Passover Seder with a question: ‘Why is this night different from all other nights?’” the Minneapolis DFLer told his House Transportation Committee last session. “You might be asking, ‘Why is this task force different from all other task forces we’ve had?’” 

This one would be created by the Legislature with many legislators as members, Hornstein insisted. It would have a hard deadline and would look into a specific set of reforms, including his preference to have voters — not the governor — pick the Met Council members.

“I believe this is the year because of a combination of factors that we must act to have a major restructuring and reform of this agency,” Hornstein told his committee.

At its penultimate meeting Wednesday, the Metropolitan Governance Task Force might have proved the skeptics right. After six months of meetings, the 17-member task force voted not to send one recommendation to the Legislature. It will send six. Any idea that was proposed by Wednesday’s meeting by any task force member was to be included.

An elected Met Council? That’s there. A council of governments made up of city council members and county commissioners selected by local governments? That’s there too. A bicameral body with an elected council AND a council of local governments? Yep. So is a hybrid council of governments with local elected officials appointed by the governor.

The current governor-appointed Met Council was formed 30 years ago after a bill to elect the members was vetoed. The council, along with a separately appointed chair, has many duties assigned by both Congress and the state Legislature. It oversees the staff that operates transit and regional wastewater treatment, it drafts and approves growth management plans, it distributes money to regional parks, it serves as the federally required metropolitan planning organization for federal transportation funding.

While that led to a handful of reform ideas, none had majority support from the task force, which includes among its members legislators plus appointees representing local governments, the governor, transit advocates and higher education. Rather than send nothing, they sent everything and asked the Legislature to sort it out.

“Supporting this motion creates an opportunity for the Legislature to evaluate all proposals equally and build on the good work of the Metropolitan Governance Task Force,” read the motion offered by Kristin Beckmann, an appointee of Gov. Tim Walz.

That might suggest that an elected Met Council still has legs since that’s the preference of Hornstein and the chair of the Senate Transportation Committee, Sen. Scott Dibble. But one reason the DFL pair convened the task force was because neither could find the votes in their respective houses of the Legislature for the elected council.

Some on the task force considered the result a waste of opportunity to change the status quo. Washington County Commissioner Karla Bigham tried to have just two proposals sent forward — two versions of a council of local officials — so as to give the Legislature more clarity. That motion was defeated.

“We’re just going to put everything in a stew and let it simmer,” Bigham said. “Just punting this to the Legislature, from a governance perspective, is not giving clarity to them.” She later said: “That just means the status quo is going to go forward, and it will perpetuate the lack of transparency and the lack of accountability.”

Myron Orfield, a University of Minnesota law professor and member of the task force, was the sponsor of the bill that created this version of the Met Council when he was in the state Senate. Orfield, who supports an elected council, said it would be a “scandal” if the task force made no recommendation of a single reform.

Hornstein, however, took issue with that conclusion. He said the group heard testimony from experts, held four public hearings around the region, refined the basic plans for either an elected council or a council of local governments and even produced hybrid ideas not thought about before. All that moved the process along and will help the Legislature discuss the issue.

“I can’t think of any other time in my legislative career that we have had such a focus on metropolitan governance,” Hornstein said. The Beckmann motion captures all of that work.

“Yes, it’s incomplete. Yes, there’s a compressed timeline. But to simply say we haven’t done our due diligence, I think the opposite is true,” he said. “This commission has done a lot of groundbreaking work.”

Another task force member, Rep. Jon Koznick, R-Lakeville, said he wanted it to be clear that even though the elected council plan was favored by the transportation committee chairs, it lacks support.

“It’s my perception that this task force originated due to bicameral, bipartisan opposition to an elected Met Council,” he said. But despite the makeup that was heavy on Minneapolis representatives, there was not enough support to make an elected council the official recommendation.

“I think it’s important to note for the public that’s watching that an elected Met Council does not have the support in this task force. That we’re not taking a vote on that says a lot.”

Phillips had said his goal was to win at least 20% of the vote in the Granite State, and he appeared to clear that bar after spending a lot of effort and money — at least $1 million out of his own pocket.

So, Phillips, 55, plans to continue his challenge to Biden, 81, whom he thinks is too old and unpopular to beat former President Donald Trump, the GOP front-runner, in a rematch.  

“Are you ready to keep this baby going because I sure am,” Phillips asked supporters at an election watch party in Manchester, New Hampshire, that had the atmosphere of a victory party.

The ever-optimistic Phillips, in his third term representing Minnesota’s 3rd congressional district, said his 20% or so of the vote was a notable political accomplishment because it was earned by an unknown congressman who stepped into the presidential race in October.

“I’ve built businesses and brands and studied the best successes in marketing history. Never known one that generated 20% market share in just 10 weeks, as we did last evening in New Hampshire. We’re just getting started!” Phillips said in a Wednesday morning post on X.  

On Tuesday evening, he congratulated Biden for winning the primary, but said “in no way was that a strong showing by an incumbent president.”

Biden was not even on the ballot in New Hampshire and never campaigned in the state because it defied the Democratic National Committee, which preferred that South Carolina hold the first Democratic presidential primary this year.

Yet CNN called Biden the winner just minutes after the polls closed because the president was expected to win handily with write-in votes, and Biden did. With 95% of the vote tallied, Biden had won 53.3%, Phillips had garnered 19.6% and self-help author Marianne Williamson took 4.6% while the rest of the votes went to a number of lesser-known candidates on the Democratic ballot.

Tough stretch ahead

While Phillips assured supporters waving placards that said “Courage” that he would run against Biden until the end of the primary season, the path forward is politically treacherous.

Phillips failed to file for the Nevada caucuses, and Florida, North Carolina, Tennessee and Wisconsin have either left him off the ballot or canceled their primaries because only Biden had met their filing deadlines.

But the next big contest is on Feb. 3 in South Carolina, a state that gave Biden the boost he needed over his Democratic primary rivals in 2020 and where Philips is likely to fare worse than he did in New Hampshire. While Phillips plans to run in South Carolina, his campaign plans to spend more time and resources in Michigan, which holds its primary on Feb. 27.

Intra-party insurgencies are rarely successful at the presidential level, but they can weaken an incumbent. On the stump, one of Phillips’ favorite words is “coronating,” accusing the Democratic Party of rejecting all competitors in favor of the incumbent president.

There’s also the question of money. While Phillips is a wealthy businessman and has shown a willingness to self-fund his political campaigns, the race for the White House will cost more than he can afford. However, according to The Washington Post, a group of Silicon Valley entrepreneurs aligned with Phillips have funded the We Deserve Better PAC that raised about $4 million to help Phillips in New Hampshire.

Activist hedge fund billionaire Bill Ackman, who has said he is concerned the Democrats will nominate a candidate who cannot win, has also pledged to help the Phillips campaign.

After the polls in New Hampshire determined he had lost, Phillips said he was “having so much durned fun I don’t know what to do” and may have enough campaign money to continue for a while.

“This is the beginning of a movement,” Phillips assured his supporters on Tuesday night. 

The managers of the Southwest Light Rail Transit project now are saying that the latest cost estimates and latest timeline for completion come with a high degree of confidence. The 14.5-miles extension of the current Green Line to Eden Prairie will cost $2.86 billion and will be welcoming paying riders in 2027.

No, really.

“I don’t lose sleep over that anymore, and I did. I’ve moved on to other things,” joked Met Council Chair Charlie Zelle. The reason for his relative restfulness is that after a year of construction, especially in the project’s money pit and time suck known as the Kenilworth Tunnel, there are fewer underground surprises left. The tunnel won’t be completed until next year, but the progress made has given the project team more confidence.

Overall, the extension is 75% completed.

“They’ve had a good year with the construction process,” Zelle said last week. “We have to get through that tunnel to really get through the hardest part of that project. But I think they’re well on their way.”

“Because I have to write the checks, I’m close to him but not quite where he is,” said Hennepin County Commissioner Marion Greene, the vice chair of the public works committee and the chair of the Hennepin County Regional Railroad Authority. “Because of the different role I have in relation to the project, I’m by definition going to be a little more nervous. But I do have confidence given all the signals and all of the (budget) rebaselining they’ve done.”

Changing budgets and timelines have been constant companions both before and after the project broke ground in 2019. At that time, the projected budget was a tad over $2 billion and the completion date was 2023. Poor soils discovered after Kenilworth Tunnel construction was underway led to a halt in construction, long delays, increased costs and a renegotiated contract with the builders. In addition, scathing reviews by the Office of the Legislative Auditor and an ongoing examination by a legislative task force for how the Met Council is governed have primed the public to expect bad news.

The current $2.86 billion budget for the Southwest Light Rail Transit project may or may not be an increase over the last publicly known figure. Legislative auditors listed the price tag as $2.74 billion in the spring, but project manager Jim Alexander said the $2.86 billion number has been used by the project at least since a funding agreement with Hennepin County was announced in August.

Hennepin County is in the midst of sending the first $100 million of what is expected to be an additional $190 million. The Hennepin County board and the Met Council are set to confirm the new allocation this week. Hennepin County, however, has not confirmed one aspect of the August framework — that any future budget increases would be shared 50-50 by the Met Council and the county.

In addition to the county’s $1.28 billion share, the federal government is paying $1.3 billion or 45.3% of the total. The rest is the $217 million contributed by the now-dissolved Counties Transit Improvement Board, $31 million from the state of Minnesota and $34 million from some of the cities along the route.

The transit improvement board was made up of the five central Twin Cities counties — Hennepin, Ramsey, Dakota, Anoka and Washington. Those five counties were authorized to collect a 0.25% sales tax for transit and much of that went for light rail, the NorthStar heavy rail line and some bus rapid transit. But when that organization dissolved over an urban-suburban dispute over how the money was spent, all five fell back under another state law that allowed a 0.5% sales tax for transportation. That increase in funding is being used by Hennepin to cover its share of construction of the Green Line extension and the Blue Line extension. It will also share operating costs.

“The Blue Line and the Green Line are priorities for Hennepin County,” Greene said. In addition to money from the transportation sales tax, the county has sent $200 million to the project from the regional railroad authority which has a separate property tax levy.   

The Met Council received a revenue boost in May when the Legislature approved a seven-county regional transportation sales tax of 0.75%  — the first dedicated and ongoing source of money for the Met Council’s transit program. One caveat in the state budget said none of those funds — nearly $500 million a year — could be spent on SWLRT until a special task force completes its work reviewing the governance structure of the Met Council. That task force’s report is due Feb. 1.

“The good news is we’ve gone through a lot of issues,” Zelle said. “We’ve restructured the contract with both the civil and systems contractors, and we have the funding identified to c0mplete the project.” The FTA requires the project to have a large enough contingency fund — money set aside for unexpected expenses — to earn the federal government’s approval of the new budget.

“Of course a project is never done until a project is done, but the project team has told me they’re pretty confident that there’s enough contingency to handle the issues we’ve all been working through, particularly going through the Kenilworth Tunnel. It’s still complicated.”

Added Greene: “There’s no doubt that this project has been very hard going. But I am optimistic. It’s 75% complete and I’m hearing from the Met Council that they have a high degree of confidence.”

The tunnel was needed once the region decided to colocate existing freight rail with the new light rail tracks rather than diverting the freight rail. But the difference between a tunnel and surface tracks has been blamed for most of the cost overruns and time delays.

“It takes time to get through this,” Alexander said. About 18 of the 30 tunnel sections — called cells — are complete. He said he expects tunnel construction to be completed in 2025.

“I just want to be cautious,” he said. “I’ve got scars on my back from this tunnel specifically and the project overall. But where we’re sitting right now, we do feel comfortable where we’re at with our (budget) estimate and timeline.”

Phillips had invited voters to have coffee with him that Jan. 9 morning, but the only ones who showed up were a few reporters, noted the caption on the CBS News photo. “Sometimes if you build it, they don’t come,” Phillips told those reporters.

“Sometimes if you build it, they don’t come,” Dean Phillips told reporters outside of the Manchester DoubleTree hotel this morning, after no voters showed up to his “Government Repair Truck Coffee Conversations” event in 22 degree weather. pic.twitter.com/x0lpVcRSnb

— jake rosen (@JakeMRosen) January 9, 2024

The Minnesota Democrat, in his third term in the House, has astounded and angered many in his party with his primary challenge to President Joe Biden, 81, whom Phillips believes is too old and unable to beat former President Trump a second time.

The success or failure of that insurgent campaign may be determined Tuesday, when New Hampshire will hold its primary election and continue its “first in the nation” tradition. However, that primary has not been sanctioned by Biden or the Democratic National Committee because they want a more racially diverse state, South Carolina, to be the first. So, Biden’s name won’t be on the ballot.

Even so, there’s been a well-funded, vigorous write-in campaign for Biden and Phillips will have to win substantial support, even if it’s short of 51% of the vote, to claim any kind of victory.

An ‘eternal optimist’

A few days after Phillips’ unsuccessful offer of coffee and conversation in Manchester, there was a completely different scene when former presidential candidate Andrew Yang headlined a well-attended campaign event last Thursday at a hotel in Hanover, New Hampshire.

Saying they bonded over common ideas for campaign finance reform, Yang endorsed Phillips and complimented the candidate’s effort to find a younger candidate to represent the Democratic Party in 2024.

“Dean has the potential to be the most transformative political figure of all time,” Yang said.

Phillips had tried to reach out to several Democrats, including California Gov. Gavin Newsom and Michigan Gov. Gretchen Whitmer, to urge them to  run against Biden. But he said his efforts were unsuccessful.

“Some of these folks refused to even take his calls,” Yang said.

Since no one stepped up to challenge Biden, Phillips decided to do so himself.

He said he has been well-received in New Hampshire among Democrats, independents and even Republican voters who often gave him “high fives” as he visited schools, diners, senior centers and other places to satisfy the requirement of voters in the state who demand face-to-face interactions with presidential candidates.  

“The only people who haven’t been that kind are Democratic elected officials,” he said.

But there are signs Phillips may not have the kind of support in New Hampshire he thinks he has.

A University of New Hampshire/CNN poll released Jan. 9 showed Biden with the support of 69% of likely primary voters in the state, while Phillips had 7%.

Best-selling author of self-help books Marianne Williamson, who is also on the ballot, was the favored candidate of 6% of those polled.

Still, Phillips considers himself an “eternal optimist.”

In an interview with NBC News on Friday, Phillips invoked another Minnesota insurgent: Sen. Eugene McCarthy, whose anti-Vietnam War campaign in 1968 drew 42% of the vote in New Hampshire, a result that prompted President Lyndon Johnson to drop out of the race.

Phillips said he would be satisfied with a much lower percentage of the vote than McCarthy received. “If we’re in the 20s, that would be extraordinary,” he said.

“We’re going to surprise (people) in New Hampshire,” Phillips said in an email to MinnPost. “Most of the country hasn’t yet tuned into the Democratic primary, and we expect to do well enough to make the establishment pay attention to the people not satisfied with coronation over competition.”

Even so, Phillips suggested over the weekend that he would be open to running as a third-party candidate under the centrist No Labels banner, telling The New York Times he would only consider it if a rematch between Biden and Trump “shows Joe Biden is almost certain to lose.”

‘The quiet part out loud’

Less than three months from its inception, the Phillips campaign has had its share of controversies.

The latest was sparked by the removal of the promotion of  “Diversity, Equity, and Inclusion” on his campaign website after hedge fund investor Bill Ackman — who has criticized Phillips’ DEI stance — pledged $1 million to the candidate’s super PAC.

Phillips has also been criticized for courting campaign money from the AI industry and hosting phone calls with OpenAI CEO Sam Altman, who has also donated to the candidate’s super PAC.

His campaign recently added an AI plank that says “we must deploy AI in government operations, weather forecasting, tax return speeds, legislation summaries, public healthcare predictions — wherever we can make an impact and improve outcomes.”

And when Phillips told the crowd at the Hanover hotel that “we’ve all seen the decline” of Biden, he received a very tepid response.

“I say the quiet part out loud,” he said.  

Dante Scala, a political science professor at the University of New Hampshire, said Phillips could win 100 percent of the vote on Tuesday and still not have any momentum toward the nomination of his party.

“However, if he won a majority of the vote here — or at least more votes than Biden — Democrats and the media would hit the alarm bell about Biden’s viability in 2024. Which, to my mind, is the whole point for Phillips,” Scala said.

David Schultz, a professor of political science and legal studies at Hamline University, said Phillips could make waves in New Hampshire if he has convinced a lot of independent voters to support him.

Phillips says his campaign platform has something for everyone. Progressives will like his “Medicare for all” plan and his ideas to end homelessness, he said, while Republicans might embrace his push for more funding for police and tighter border security.

Schultz said Phillips’ goal on Tuesday should be to “wound Biden badly in New Hampshire so that either Biden decides ‘I’m going to dismantle my campaign,’” or the president is seen as weak enough to encourage another Democrat to enter the race.

In any case, the contest between Biden and Phillips on Tuesday is expected to be overshadowed by the bitter GOP primary that will also be held that day.

Former South Carolina Gov. Nikki Haley is battling to overtake former President Donald Trump now that Florida Gov. Ron DeSantis has dropped out of the race. DeSantis suspended his campaign Sunday and threw his support behind Trump.