“Well, one thing I have to tell you,” the man continues. “What you did when the state had those big budget surpluses—returning the extra money to the people three years in a row—that was a noble thing to do.”
“Well, thanks,” I say. “It just seemed more like the right thing to do. But don’t try telling that to the Democrats or the Republicans.”
Politicians have led us to believe that only certain people are qualified to do the job of governing. It’s a mystique, and a misconception. As governor, I had a terrific group of commissioners, and I paid attention to them. If you’re intelligent and surround yourself with good people, they’ll educate you. It’s not rocket science. The greatest compliment I had came six months after I took office, from Skip Humphrey. He came up to me at a gathering out in Wayzata, Minnesota, and said, “Governor, you’ve put together the best administration the state of Minnesota has ever seen.”
Economics was always something I’d had a knack for. In high school, I got A’s in business law and business administration. When I took aptitude tests in the Navy, they first sent me to “Storekeeper-A” school, which is all about requisitioning; basically, you’re trained to run the ship’s business. I’ve never gone out and created a business, but I did create an entity—called “Jesse Ventura”—that I’ve lived off quite well for my entire adult life.
We’d had multiple years of prosperity in Minnesota, and there was a projected $4-billion-plus state budget surplus through the first three years of my term. So I was able to provide Minnesotans with three consecutive tax-free rebates. The formula that Pam Wheelock, my finance commissioner, and Matt Smith of the Department of Revenue came up with was to give people a rebate equal to 35 percent of the sales tax a family or individual would have paid out over the previous two years, based on their average earned income.
I’ll never forget the politicians’ reactions to my first State of the State address. Every time I mentioned something about “tax cuts,” the Republicans on one side of the room gave me a standing ovation. When I suggested spending Minnesota’s huge settlement from the tobacco companies on social programs, the Democrats on the other side did the same. I told a journalist afterward it reminded me of one of those old “tastes great, less filling” beer commercials that I used to do.
When push came to shove, the Republican-dominated House didn’t want anything except an income-tax rebate, and the Democrat-controlled Senate decided to support my proposal. With less than two weeks left in the legislative session, they were still deadlocked when I called the leadership in for a closed-door meeting. Actually, I threatened to lock Roger Moe and Steve Sviggum in the statehouse library with my gaseous bulldog, Franklin. “If I feed him a little bit of hamburger,” I told the press, “I got a feeling we’ll have a deal in about a half hour.”
I don’t like cutting backroom deals, but sometimes you have no choice. We ended up providing the largest tax rebate that any state had ever given (a married couple earning $50,000 a year received a check for more than a thousand dollars), based on the sales-tax calculations. The Republicans got their income-tax cuts, the Democrats got an extra $100 million for education spending, and I got the $60 million I wanted for initial funding of light-rail transit.
Everybody came out happy. For the moment.
One of the major issues that inspired me to run for governor was Minnesota’s complicated property-tax system, which I’d vowed to change. In my first State of the State, I said: “Let’s face it. We’ve lost any logic to this system. Property taxes no longer are tied to the services that are delivered. We have created a so-called progressive tax based on the value of the property. It punishes people for doing the right thing. If I keep up my property, my value and taxes go up, even though I don’t need as many local services as the property that has been allowed to deteriorate and needs more inspections, fire protection, or police patrols.”
To me, it also came down to taxation without representation. You may have heard about Minnesota being the “land of ten thousand lakes.” A lot of people like myself live in the city, but own a little lake cabin to spend their weekends in. That’s a tradition as engrained in Minnesota as surfing is in California. You don’t vote in the area where you own a second home, yet the local bureaucrats could still raise your property taxes as a levy to pay for public education. Whenever they needed money for their school district, they’d dump it onto the cabin owners—who were, unfairly, footing the bill there, as well as where their own kids attended school in the fall.
So, in 2001, I came up with a plan for the state to start paying the full costs of public education out of a general fund, rather than from local property taxes—which would then become smaller, simpler, fairer, and more truly local. To help pay for this switch, I proposed adding a sales tax onto many services that weren’t subject to it—but, at the same time, lowering the overall sales tax from 6.5 to 6 percent. And we’d still come in with a balanced budget. Well, this time the Republicans loved me instead of the Democrats.
Here’s the thing about sales taxes today, and I imagine it’s this way in many other states: They are based upon the economy of the 1960s, when we were still about 70 percent goods and 30 percent services. Today, the economy has flip-flopped, and it’s almost exactly reversed. Therefore, by continuing to tax only the goods, we are losing considerable revenue.
I pointed out in my budget speech that all of these services we buy—like haircuts, car washes, piano tuning, boat docking, dating, on and on—go mostly untaxed. Some cases in point, in terms of winners and losers: If you get a haircut in Minnesota, it’s not taxed. If your dog gets one, it is. Whether the hair comes off a human or a dog should be irrelevant. If you board your horse, it’s not taxed. If you board your dog, it is. This clearly shows me that the dogs have bad lobbyists. If you hire a company to plant a tree, it’s not taxed. If they cut a tree down, it is. I imagine landscaping people do both, don’t you?
These were the kind of reforms I’d promised people during my campaign, and mine have since been described as “perhaps the boldest, most far-reaching proposals for changing the state’s tax system in Minnesota history.” So what happened? The 2001 regular session ended with every single piece of tax and spending legislation left hanging. The House wanted more of the property-tax relief set aside for businesses. The Senate wanted more for homeowners. It was gridlock, and I had to order a special session and threaten a government shutdown.
I told people on my weekly radio show that if that happened, “there would be no state troopers out on the roads. There would be no prison guards. So we’ve come up with an idea called ‘Host a Convict.’ We’re going to look for legislators and people that would like to volunteer to take a few convicts into their homes during the shutdown.”
On June 30, at 3:30 in the morning—right up against the deadline—the legislature acted. Historic property-tax reform and relief passed. Education funding came off the local property tax rolls and went into the state’s general fund. My plan to broaden the sales tax didn’t make it, but I wasn’t giving up yet. I still had a year to go in my first term.
Running into the fellow from Minnesota at the casa de cambio gets Terry and me talking that night in the hotel room about taxes. I’ve been audited twice. Two years in a row, in fact, when I was mayor of Brooklyn Park, even though the IRS claims that never happens to people. I hadn’t cheated on my taxes. The second year, they even found a mistake in my favor. But all that did was pay for two years of my accountant’s bills.
“They went so far as to make me categorize how much shampoo I used,” Terry remembers.
“And they wanted to know how much money I carried in my wallet on a day-by-day basis,” I recall. “That’s not an invasion of my privacy? If I want to carry around ten grand, as long as I’ve paid my fair share to the government, it’s none of their business!”
“Your mother lived with us then, and they wanted to know whether there was any chance she’d hidden some money in our backyard. It was rid
iculous!”
“I was going crazy, but fortunately my accountant kept me away from them.”
“The second audit, they wanted to look at my horse business. But I had a business plan and was so well organized, they ended up giving me a refund.”
Summing up our frustrations—and presumably those of thousands of Americans—I say: “The IRS assumes you are guilty and forces you to either try to muddle through alone against their professionals, or hire your own expert to defend yourself, if you can afford it. They freeze people’s assets, and they threaten you with fines, taking your house and property, and sometimes even with jail. To me, this smacks of Gestapo-type tactics. So what’s the alternative? Abolishing the income tax, and putting in place a national sales tax instead.”
This would make paying taxes strictly between business and government, and you as an individual would be taken out of the mix. No more keeping seven years of tax returns stashed away in your attic. And no more being guilty until you’re proven innocent, in the eyes of the IRS, which flies in the face of our legal system.
With a national sales tax, the federal government brings in the money it needs by taxing the goods and services we buy. Food and clothing, the basic necessities, would be exempt. Only our optional purchases would be collected on. We decide how much tax we’ll pay by regulating our own level of consumption. You could be a multimillionaire but live in a studio apartment and drive a beat-up Volkswagen, and keep most of your money. But if you live in a penthouse and drive a Mercedes and own a yacht, you pay in accordance with your lifestyle. Wealth isn’t based on what you earn, but on what you spend.
One objection I’ve heard raised to a national sales tax is that our free market economy would be adversely affected. But I think the opposite is true. This would make the government inherently dependent upon the economy. If we’re not out there spending, they’re not making any money. With the system we have now, the government doesn’t feel pain. If there’s a recession, the government still gets your money first. You get to keep what they allow. Start taxing what’s sold on a day-to-day basis, the government gets a piece of the action—but if the economy goes sour, so do they.
Some people also worry that a national sales tax would create a big black market, because a lot of the economy would go underground to avoid paying it. Again, I don’t see that happening. Right now, people making incomes off illegal businesses like gambling or drugs don’t pay income tax on them. But everybody buys things and, when they do, they’re paying taxes. The same would be true for foreign visitors, whose purchases would all be a bigger boon to our economy.
Since our gross national product is in the trillions, I think that should be enough to run our government. If you shifted the entire economy to being based upon purchasing, I’ve seen studies that the sales tax could be as low as twelve percent. Not thirty percent, like most people are paying in income taxes today. And the IRS could shift from monitoring us to keeping tabs on our government. If the Pentagon is wasting money by buying $200 toilet seats, they get harassed, instead of private citizens.
Of course, I realize that we’d need a constitutional amendment to make this kind of change. But that’s how income tax happened, in 1913. Something our forefathers never envisioned—that the government would receive the fruits of your labor before you would.
After September 11, 2001, the entire country went into an economic slump. In Minnesota, our huge surplus turned into a projected $2 billion deficit through 2003. In order to balance the budget, I had to call for something I swore I never would: raising people’s taxes. I came out for increasing taxes on cigarettes, and even newspapers and magazines. I wanted to extend the sales tax to legal services and auto repairs.
The two parties, however, chose to ignore me and set out to fix the deficit their way—which was nothing but smoke and mirrors, and an effort to do it without raising any taxes. We ended up in a stalemate in 2002. I called the legislature’s approach “a classic Alfred E. Neuman ‘What, me worry?’ scenario.” Their plans reminded me of the homeowner who makes house repairs with cheap materials that last just long enough for them to sell it to someone else. Then the new owner comes along and gets stuck with all the bills when the place falls apart. I didn’t want our citizens suckered into this kind of cheap trick.
The legislature set out to isolate me and go their own way. So, I gave it back to them in kind. When they came to deliver the budget bill to my office, nobody answered the door. So, the two party honchos came out to my ranch at ten o’clock that night, bringing the TV cameras along. It was a big charade, trying to make it look like they were staying up late doing their job, while I was avoiding them. One of my state troopers guarding the ranch refused to say whether I was there. (I was inside watching a Timberwolves game.) The next morning, some legislative staff put out “missing” posters with my picture that said, “Have you seen me? Last seen 2/21/02 before 4:30.”
A few days later, I vetoed the legislature’s budget bill that was still going to leave a deficit of about $400 million. They then overrode my veto. One of their cost-saving items cut the budget for my security detail by $175,000. How did I respond to that? I told reporters it might be a good idea to save that money by shutting down the governor’s mansion, so state troopers wouldn’t need to be paid to guard it. Losing 11 percent of my governor’s budget, I had to keep in place what runs the office efficiently. To me, the mansion was just a showplace where the governor or his family can meet with dignitaries. I was only half-kidding when I said that, instead, “we could have them up to the Capitol and we could order Chinese and Domino’s.”
The mansion is also a huge money pit, because it’s an old residence built back around the turn of the twentieth century. It’s had more than $5 million of renovations through the years, and you’d never know it. I said, “For God’s sake, for $5 million we could go build a state-of-the-art house like Jimmy Jam Harris, the record producer, did on Lake Minnetonka.” The governor’s residence still had lead in the pipes, and my family was drinking water from these! I actually had to go to the Department of Health and get them to fix that, after I had my physical and the doctor found the level of lead in my blood was higher than it should be.
So if the legislature wanted to engage in a power play, I was ready. At the end of April, the moving trucks backed up to the mansion and started taking away the artwork and antique furniture to be put in storage. My family and I moved out.
Headline: MINNESOTA: GOVERNOR SHUTS MANSION
Gov. Jesse Ventura shut down the governor’s mansion, laid off most of the staff and declared it unavailable for all but limited official functions. The governor said lawmakers had left him no choice but to close the 20-room English Tudor-style residence when they cut his spending and reduced his security budget.
—The New York Times, May 1, 2002
Well, I really got hammered for that one. I didn’t realize how an ancient house like that somehow endears itself to people. Of course, the media wouldn’t be clear in telling the public the real reasons. They just said I was being spiteful over the budget. The fact was that the legislature’s budget left me no recourse.
Before they adjourned, the legislature used up what little remained of budget reserves, made their short-term fix, and didn’t raise anybody’s taxes. And they restored the $375,000 for my security and for reopening the mansion. I went and played golf their last day in session, and then vetoed the bill, which I fully expected they would override, and they did.
In the years since I left office, the state of Minnesota has had to live with, and try to recover from, what the legislature did with that last budget. The public is told the story that they were left my mess. They were not. My completely balanced budget would have solved the entire deficit problem.
Messes like that one are the reason why I also pushed for Minnesota to move to a unicameral legislature. I proposed that our House and Senate be combined into a single body of 135 members, down from 201. That way, I believed government would be m
ore accountable and responsible. The state would also save about $20 million a year. I wanted at least to get this on the ballot, so Minnesotans could vote one way or the other.
The only state to have a unicameral legislative is Nebraska, which has had one house for the past eighty-some years. Do you know that, in all that time, they have never been forced into a special session to reach a budget conclusion? That speaks volumes. In a unicameral set-up, you don’t have two separate houses holding each other up! Unlike Minnesota, where the last several years of legislative sessions haven’t finished on time because of a budget deadlock. (I think the legislators shouldn’t be paid at all for these special sessions but, in fact, they get more per diem.)
At the federal level, yes, we need the check-and-balance of different make-ups in a House and a Senate. Otherwise, California would run the nation, in terms of representation, because they’re the biggest state. But at a state level, this actually goes against the constitution of Minnesota. It’s supposed to be one person, one vote. Not one person who gets two votes. That’s why Alan Speer, a brilliant constitutional scholar who sat in our House of Representatives, supported me on unicameral.
Well, I couldn’t even get the legislature to bring this to a floor vote. Even at a time when the entire private sector was being forced to cut back, government wasn’t about to consider reducing itself. I called them “gutless cowards,” and I meant it.
Term limits, in my view, would be a damned good idea. Maybe politicians wouldn’t then be quite so beholden to the power of corporate lobbyists. The only lobbyist I ever knowingly met with as governor was one I used—to try to get a floor vote on a unicameral legislature. Otherwise, I told my staff from the beginning: lobbyists and special interests did not elect me, so why do I need to talk to them now?
Don't Start the Revolution Without Me! Page 17