Republicans unveil plan to encourage job growth
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Republican state lawmakers say they want to improve Minnesota's job climate by providing businesses with regulatory relief and $200 million in tax cuts.
House and Senate leaders unveiled separate but similar jobs bills Monday as their symbolic first legislation of the 2011 session.
A projected $6.2 billion state budget deficit is casting a large shadow at the State Capitol, but the Republicans who now control both the House and Senate say balancing the books is their second priority. Their No. 1 goal is to create what they view as as business-friendly environment that will bring new jobs to Minnesota.
State Sen. Geoff Michel, R-Edina, says Senate File 1 sends a symbolic message.
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"We want to make Minnesota the best place to start a business and expand a business," he said. "We want to plant a flag at every border that our state is open for business again, and that we will do anything to help a job creator."
Michel's bill would phase in a 50 percent reduction of the business income tax rate. The rate would gradually drop from 9.8 percent to 4.9 percent over the next six years. Business property taxes would be rolled back to 2009 levels. The estimated cost for both tax breaks is $200 million in the next two-year-budget.
The Senate bill would also require state agencies to respond more quickly to business permit applications. That change is the lone focus of the top bill introduced in the House. Both measures say all environmental permits would have to be issued or denied within 150 days of submission.
Rep. Dan Fabian, R-Roseau, is a newly elected legislator and the chief author of House File 1. Fabian said the bill is a common-sense approach that will prevent some businesses from expanding in neighboring states.
"We can compete against North Dakota, South Dakota, Iowa and Wisconsin. I know that. We have done that in the past, and it's imperative that we do it again," said Fabian. "How else are we going to do it? If we don't try, how are we going to succeed? I'm not satisfied to sit here and deal with the status quo."
Business leaders, who spent several million dollars in last year's campaign to elect Republicans, were quick to praise the GOP proposals. David Olson, president of the Minnesota Chamber of Commerce, called the Senate bill a positive signal to business owners.
"It's refreshing," he said. "We have not heard this kind of thing for actually quite some time, somebody trying to say, 'Hey, we want to make sure our businesses stay and expand here.' It's obviously good news from our perspective."
Democrats say they, too, want to grow jobs in Minnesota, but they were largely critical of the Republican approach. Senate Minority Leader Tom Bakk, DFL-Cook, said the GOP bill makes the deficit worse and doesn't guarantee a single job. Bakk said previous attempts to grow jobs through tax breaks have failed.
"The JOBZ program had an exemption from corporate taxes, there were no property taxes, there were no sales taxes, and its performance was dismal," said Bakk. "We created almost no jobs in eight years with JOBZ, in a total tax-free environment. So, I just don't think you can use tax policy to drive economic stimulus."
With Minnesota's unemployment rate hovering at 7.1 percent, Rep. Tim Mahoney, DFL-St. Paul, said regulatory reform offers no immediate help to anyone. Mahoney said there are better ways government can stimulate the economy.
"We need to have some kind of a bonding bill that actually puts people to work -- puts the engineers, the architects, the sales people, the inspectors, the construction workers -- puts them to work," he said.
Gov. Mark Dayton has frequently said he wants to work cooperatively with Republicans on job creation. He issued a statement essentially repeating that pledge, but he did not react specifically to either the proposed tax breaks or regulatory relief.
As Republican lawmakers were showcasing their plan to grow private-sector jobs, they were also quietly proposing to put some public employees out of work. The early batch of House bills included a measure to reduce the state workforce by 15 percent over the next four years through early retirement, furloughs and layoffs.
