Two weeks into the 2011 legislative session, it is very clear what this year’s focus will be. Every discussion thus far has centered mostly around two topics: The state’s massive budget deficit, and our ability to create new jobs and business in Minnesota.
The state’s budget deficit is serious. At $6.2 billion, it accounts for 16 percent of the state’s total budget. This isn’t the first time Minnesota has faced serious cash shortages, but it is the first time that we don’t have many options. In the past, we’ve looked at one-time sources – such as using tobacco endowment money, or delaying some school payments, or relying upon federal stimulus dollars – to help us dig out of the hole, if only temporarily. Now, we’re faced with an absence of one-time solutions and a serious need to confront the long-term, structural budget problems that are facing our state.
Of course, one of the best ways to ensure Minnesota not only recovers from the budget deficit but is prepared for a quick economic turnaround is by focusing on our business environment. We want to do everything we can to attract new jobs to our state and support our existing businesses.
I was glad to hear that this job-creation goal would be behind the first legislation introduced by the new House and Senate majorities this week, but I was disappointed in the details. The bill’s main focus is on cutting the corporate income tax, a plan that would add $200 million to the budget deficit 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.
In this economic climate, we need to do more to help companies of all sizes 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.
It’s important to remember that as much as we’d like to think what we do in St. Paul will create jobs, much of what makes Minnesota an attractive place to do business happens locally, in our own communities. I was reminded of that during a Statewide Health Improvement Program last weekend in Rochester. We had participants from Freeborn, Fillmore and Mower counties join in a good discussion about what our area cities are doing to promote healthful living and decrease health care costs for generations to come.
Albert Lea, for example, touted a partnership between Riverland Community College, the school district and the city that helped create a disc golf course that now serves as a free source of exercise and recreation for all area residents. All of the cities talked about the importance of complete streets: designing with a mission to make city streets equally open to pedestrians, bikes and cars. It’s seemingly small projects such as these that make a big impact in creating communities that become attractive places for businesses to move or expand. They are just as important as any jobs legislation we might pass in St. Paul.
As always, please don’t hesitate to contact me with any questions or concerns: firstname.lastname@example.org; 651-296-9248; Room 19 State Office Building, St. Paul, MN 55155.