State commissioner : Economy going strong
WILLMAR -- Minnesota's economy is on a roll, according to a state official who visited Willmar Wednesday. "I'm frankly here as a cheerleader, because I think Minnesota is doing really, really well," said Myron Frans, commissioner of Minnesota Man...
WILLMAR - Minnesota’s economy is on a roll, according to a state official who visited Willmar Wednesday.
“I’m frankly here as a cheerleader, because I think Minnesota is doing really, really well,” said Myron Frans, commissioner of Minnesota Management and Budget. Frans spoke at a Willmar Rotary meeting at The Oaks in Willmar. Three major ratings agencies had positive things to say when they evaluated the state’s financial position in advance of a bond sale last week.
The state has also been ranked among the top states to do business in and has one of the lower unemployment rates in the nation.
Frans ticked off some of the state’s national rankings and said they are an indication of how well the state’s government works.
Cable network CNBC recently ranked the state as the nation’s top state for business. It earned the top ranking by being second in education, third in quality of life, fifth for its economy, sixth in technology and innovation, ninth in infrastructure and 13th for its workforce.
“It’s being high in all these categories that led Minnesota to be number one overall,” Frans said. He acknowledged that it would be difficult to stay at the top of the list, “but I think it helps solidify the fact that businesses in Minnesota are seeing this state as a great place to invest going forward.”
Frans said many people like to compare Minnesota and Wisconsin.
“I feel a little sorry for Wisconsin,” he said. “They’re never going to be able to keep up with Minnesota. It’s just pure math.”
Minnesota’s economy is much more diverse, and Wisconsin doesn’t have an area like the Twin Cities metropolitan area, he said.
Amazon is building a new facility near Jordan and Shakopee, he said. A year ago, company officials told him that the “Minnesota market is too big to ignore.”
The state’s 3.9 percent unemployment rate is fifth lowest in the country, he said, and the state’s pension liability is lower than many other states.
The bond ratings agencies have noticed the state’s performance.
Standard & Poor’s upgraded the budget outlook from stable to positive, which Frans called a “tremendous advance.”
The agencies noted that the state has eliminated its debt to schools, is making automatic transfers to its reserve fund and shows strong fiscal management, he said.
Standard & Poor’s said the state’s rating could be increased in the next couple years. It was downgraded in 2011.
While the ratings agencies praised the state, the agencies had some lingering concerns, he said.
“We are still paying the price for the 2005 shutdown and the 2011 shutdown,” he said. “They view that as an inability to manage our budget.”
The agencies are less interested in the reasons for a government shutdown than the fact that the shutdown occurred, he said. “They don’t like it when government doesn’t get done on time.”
People in the audience asked how state government would handle a reserve fund. Frans said adjusting the budget to cut taxes or spend reserves must be done carefully.
The state “overcorrected” in the late 1990s by giving money back to taxpayers and cutting taxes. “We were behind the 8-ball for a decade,” he said.
One man asked Frans if the state could provide some relief for rural communities that are losing workers and businesses.
Frans agreed that Minnesota is a complicated state, and a statewide tax policy doesn’t always address regional differences. He said there hasn’t been a system developed that would address regional differences, but state officials are open to suggestions.