Commentary: The 2013 Legislature’s legacy? Minnesota can do better
By David C. Olson
Minnesota Chamber of Commerce
Gov. Mark Dayton and legislative leaders convened in January with a common goal of “progress for Minnesotans on education, job creation and better government.” Four months later, the Legislature’s adjournment left more questions than achievements.
Why are teachers not required to pass a basic skills test before entering classrooms? Why are we raising taxes on small-business owners? Why are we expanding government with little or no attention to spending reform and redesign?
The cumulative impact of the Legislature’s votes is certain to negatively impact businesses and families alike. Minnesotans should collectively ask our elected officials: “Why?” Then impress upon them: We can do better.
The governor pledged to balance the budget by making the rich “pay their fair share” to protect the middle class. In the end, the tax/spending package delivered a double whammy. In addition to high wage-earners, the state’s 20,000 small and midsized business that pay their business taxes through their individual income tax will now pay among the highest taxes in the nation.
Why did lawmakers hike taxes on businesses to a level much higher than neighboring states, putting Minnesota companies, especially in border communities, at an extreme competitive disadvantage? The top income tax rate is now the fourth highest rate in the nation. The corporate rate is third highest, and the cigarette tax ranks sixth.
Why did the Legislature enact business-to-business sales taxes that will impact the agricultural and manufacturing communities, among others? Sales tax will be applied to labor costs for repairs and equipment. The telecommunications equipment sales tax will make it more expensive to supply broadband and technology that is critical for rural areas to compete and thrive. The tax on storage and warehousing could devastate this industry’s ability to compete in Minnesota and will result in sales tax on storage of agricultural inputs, too.
Why did we need to create another state agency with nearly 100 full-time employees to manage the new health insurance exchange — at a cost of $60 million that will be financed entirely by a tax on small businesses and individuals’ health care premiums? An exchange operated by the private sector could have achieved the same goals at far lower cost.
Why did we need to raise solar energy standards and increase electricity costs for businesses and residences? Minnesota already has one of the most aggressive renewable energy mandates in the nation.
Why are Minnesota students no longer required to pass a high school graduation exam? Our kids deserve a solid foundation for lifelong success, and Minnesota employers need a skilled workforce.
The Minnesota Chamber and others recommended alternative strategies, but our ideas were ignored. Too often, the singular response to addressing the state’s challenges was to raise taxes and grow government.
Minnesota cannot afford to return to tax/spend strategies that threaten our economic success. The latest unemployment figures show the state’s job growth now lags behind the national rate.
As neighboring states are erecting billboards on our borders welcoming business and jobs, what message is Minnesota sending?
It’s time to ask our elected officials: Why? Then tell them: We can do better.
David Olson is president of the Minnesota Chamber of Commerce.