Minnesota Minutes

Our elected officials respond when they hear the Minnesota voice of business. It’s time to be heard once again.

The Governor and DFL legislative leaders are setting the spending (read: tax) targets as the Legislature heads toward its mandated May 20 adjournment. The Tax Conference Committee will use these numbers to craft the overall tax bill that will be sent to the House and Senate floors. Once the bill leaves the conference committee, there is no opportunity to amend the bill. Lawmakers only have the option of voting “yes” or “no” on the package as it stands.

Minnesota state budget policy is served best by voting “no” on HF 677, which is scheduled to be considered April 24 by the Minnesota House. The Minnesota Chamber strongly opposes HF 677 due to the magnitude of tax increases – a whopping $2.6 billion. This massive tax hike increases the cost of doing business in Minnesota, undermines economic growth and makes Minnesota an outlier compared with states across the country.

Tax Day has come and gone, and it’s a stark reminder that we need to restore accountability to Minnesota budget policy. The current path at the Capitol should be unacceptable to all hardworking taxpayers. Minnesota businesses and households are focusing on effective and efficient spending in an economy that is still slowly recovering. Governor Dayton and legislative leadership should be adhering to the same principles, and go through the budget line by line to identify and cut wasteful spending.

That isn’t the case as it now stands. Minnesota’s economy is growing at 2 percent. Yet the Governor and legislative majorities are proposing total spending increases of 7 percent, or exceeding $2 billion. Rather than increasing spending, our elected officials should focus on spending existing revenue better.

Apply today for Leadership Minnesota, a program exclusive to the Minnesota Chamber that provides special insight into what makes Minnesota tick. How is mining evolving on Minnesota’s Iron Range? What role does technology play in the healthcare industry? How are our state’s more than 100,000 companies of all sizes and types interconnected? You’ll receive answers to these questions and many more through this one-of-a-kind tour of Minnesota.

This year’s program just concluded, and we’re gearing up for 2013-2014. Applications are due May 10 for the 2013-2014.

Leadership Minnesota continues to receive rave views from our participants:

From Dave Thomas, president and CEO at SJE-Rhombus in Detroit Lakes: “All five sessions were packed with interesting and educational experiences covering key Minnesota industries throughout the state. Not only did I learn real-world ideas that I could immediately apply within our organization, but I also established networking connections and friendships that will last far beyond completion of the program.”

From Pam Sartell, president and CEO at The Sartell Group, Minneapolis: “I felt my head could explode with knowledge about Minnesota’s various industries and how each of them affects the ebb and flow of commerce and the population. The business connections and friendships formed were unexpected and turned into a powerful network of business leaders.”

Leadership Minnesota helps you understand how public policy crafted at the Capitol impacts the vitality of each and every Minnesota company. The program consists of five, two-day sessions around the state - beginning in September 2013 and wrapping up in March 2014. For additional information, contact Jenny Munyer at jmunyer@mnchamber.com. Don’t miss out on Leadership Minnesota – a behind-the-scenes look at Minnesota’s economy that is exclusive to Minnesota Chamber members.

Wow! Trudy Rautio, CEO of Carlson Co., hit it out of the ballpark with her comments at our Minnesota Women in Business group luncheon on March 26. As she spoke in the newly opened Radisson Blu hotel ballroom – a must stay, class-act hotel, she delivered a motivating and inspiring presentation to more than 220 women Minnesota Chamber members. She believes women can pave the path through building better talent, building stronger relationships, setting ambitious goals and delivering great results. Trudy not only “leans in,” but she steps in and makes things happen, using her nice, northern Minnesota upbringing.

Women then had the opportunity to connect with women members of the Legislature – 13 lawmakers representing a cross-section of the House and Senate, Democrats and Republicans, metro and rural districts. The conversation proved enlightening and beneficial for everyone.

Once the presentation and networking subsided, many of the women walked through the skyway over to the Mall of America to do some shopping from the gift cards they received complimentary of the Mall of America. Look forward to seeing everyone at our next Minnesota Women in Business group event.

What a difference eight weeks makes when it comes to Minnesota budget policy. In January, House Speaker Paul Thissen and Senate Majority Leader Tom Bakk addressed our Minnesota Chamber of Commerce Board. They pledged to work with the business community to solve the state’s deficit without harming Minnesota jobs. This week, the House Speaker asked small businesses to pony up more money for a budget that proposes significant increases in spending and taxes and not enough spending reform.

That’s right, raising personal income taxes is a direct hit on the small businesses and entrepreneurs that flow business income through personal income taxes. Gov. Mark Dayton already has proposed raising the state’s top personal income tax rate to 9.85 percent, which will impact 21,000 of Minnesota’s most successful businesses. House Democrats upped the ante by proposing a temporary surcharge on the highest wage-earners. At 11 percent, the income-tax rate would be second highest in the nation. Senate Democrats have yet to offer specifics, so we hope they do not take the same path as the Governor and House leadership.

Some legislators say the Minnesota Chamber unnecessarily paints a negative picture of our state when we raise concerns about high taxes and an uncompetitive business climate. Their budget proposals reinforce our concerns.  They propose raising between $2 billion and $2.5 billion in new taxes to fix a short-term $627 million problem. It’s fair to question how a Minnesota budget policy that relies on significant new tax burdens will help generate more jobs and economic growth in our state.

Governor Dayton challenged business leaders during Business Day at the Capitol to present facts – rather than anecdotes – when advancing the Minnesota voice of business. The Governor apparently listened to the facts when he pulled his proposed sales tax on business-to-business transactions. Business owners are just as vocal on the impact of the Governor’s proposed income tax changes that fall squarely on many of the state’s finest small businesses and entrepreneurs.

Governor Mark Dayton’s decision to drop his proposal to extend the sales tax to business-to-business transactions is recognition that it’s poor budget policy. The tax would have had serious consequences for small and large Minnesota employers.

We applaud his conclusion. The governor’s announcement reinforces our message that policy-makers should focus first on spending reform to balance the budget for the next two years.

In that regard, there’s still work to do. The governor remains intent to create a new tier in personal income-tax rates. Minnesota’s current top rate of 7.85 percent is eighth highest in the nation. His proposed rate of 9.85 percent would make us fourth. This tax will impact many small companies whose owners flow their business income through personal income taxes. That means less money to invest in their companies – including their employees. The higher tax rate also will make it harder to recruit top-quality talent to Minnesota.

We thank those business owners and employees who contacted their legislators and the Governor for the ill-advised plan to enact a tax on business-to-business transactions. Your message was heard and made a difference.

Your next opportunity to advance your priorities is March 13 for Business Day at the Capitol, and BE HEARD! Join your peers, and tell your legislators that the governor still proposes too many taxes and too much spending with not enough reform. His insistence on punishing small businesses and successful people through the 4th highest income tax in the nation is poor Minnesota budget policy.

Businesses place priority on consumer safety, but Minnesota chemical regulation policy would take a step backward under proposed legislation at the Capitol. Two measures threaten Minnesota companies and would be the only restrictions seen anywhere in the world. The bills would place Minnesota companies at a competitive disadvantage and threaten jobs.

Policy-makers are paying attention to business in Minnesota. We’d normally welcome the spotlight – but not this time. Governor Dayton’s proposed increases in taxes and spending are generating national headlines, and prompting other states to make a pitch to Minnesota businesses.