Budget, job creation will be priority of 2011 legislative session

The 2011 legislative session began Jan. 4 and already, it’s clear what the top priorities of the session will be: Solving the state’s budget deficit and creating new jobs.

The budget deficit is serious. At $6.2 billion, it’s more than one-fifth of the state’s total budget that is unaccounted for, and this year, the one-time accounting shifts and delays that have been relied upon in the past – such as federal stimulus funding – no longer exist. This session’s legislature must buckle down and make very tough decisions about what services can be cut or reformed, and where new revenue is needed to make sure Minnesota’s budget is stabilized and the economy is primed for success.

To ensure the economy is primed for future success, this year’s legislature also must focus on key investments that will support existing businesses and attract new ones to our state. I was pleased to see that this job-creation goal was behind the first legislation introduced by the new House and Senate majorities this week. I was concerned, however, that their jobs plan adds $200 million to the budget deficit right off the bat, and would do little to help the small Minnesota businesses that we know create the most, best-paying jobs in our state.

According to the U.S. Small Business Association, 65 percent of jobs created in the past 17 years have come from small businesses. But in Minnesota, 96 percent of small businesses do not pay the corporate income tax. A job package that focuses on cutting the corporate income tax would mostly benefit large corporations, nearly half of which aren’t even headquartered in our state. This legislation would do almost nothing for the local businesses that create the most jobs in Minnesota and need our support right now.

Minnesota actually is doing well on the small business front. The Secretary of State’s office reported a record number of new business filings in 2009, with 63,338. For the past four years, we’ve averaged more than 55,000 new businesses registering with Minnesota per year – a big increase from the 1990’s when the number hovered between 25,000 and 35,000 per year.

Clearly, Minnesota still is an attractive place for small start-up businesses. But in this economic climate, we need to do more to help these companies stay and expand in our state. Constantly rising property taxes are a big burden to small businesses and need to be stemmed. Creating tax incentives for start-up businesses or investment projects also helps. The jobs bill passed by the legislature in 2010 focused on these types of incentives and already has created $25 million worth of new investments in our state. We must continue to focus on these types of job-creating policies, not tax windfalls for the big companies that are recording record profits.

This discussion about jobs and the budget will be a key piece of all committees I serve on this year, and I look forward to the conversation. For the next two years, I have been appointed again to the Tax Committee, the Higher Education Committee, and the Agriculture and Rural Economies Committee. My new St. Paul address is Room 107 State Office Building, 100 Dr. Rev. Martin Luther King, Jr. Blvd., St. Paul, MN 55155.

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Senator Rod Skoe
Rod Skoe represents District 2, which includes all or portions of Becker, Beltrami, Clearwater, Hubbard, Lake of the Woods, Mahnomen, Otter Tail and Wadena counties in the northwestern part of the state. He chairs the Tax Committee.

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