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Continued: Candidates for governor agree that 'JOBZ' didn't work

  • Article by: NEAL ST. ANTHONY , Star Tribune
  • Last update: August 24, 2010 - 10:21 PM

Minnesota's three contenders for governor don't agree on very much, but at a debate centering on business issues Tuesday in Minneapolis, all three agreed that Gov. Tim Pawlenty's "JOBZ'' program was a dud.

Independence Party candidate Tom Horner slammed Pawlenty's centerpiece Job Opportunity Building Zones (JOBZ) program, which the legislative auditor has criticized as a scattershot approach that went largely to firms that would have expanded anyway in rural Minnesota without millions in tax subsidies.

Republican Party candidate Tom Emmer said: "Pawlenty's heart was in the right place" on JOBZ but that overlapping state government programs have stymied economic growth, frustrated Minnesota entrepreneurs and driven expansion of large companies such as 3M and Marvin Windows to other states.

"I'm just a guy from Delano," said Emmer, a lawyer. "Trust the people, the marketplace. Get government the heck out of the way. We need sensible regulation, yes. ... We don't need five different state agencies permitting for water."

DFL candidate Mark Dayton said that JOBZ proved unfocused; it included retail stores, and it shuffled jobs within the state instead of adding new ones. He said he favors targeted incentives that would spur expansion of high-value manufacturing jobs in Minnesota.

During the debate -- moderated by Chris Puto, dean of the University of St. Thomas Opus School of Business -- Horner told the audience of several hundred: "Our challenge is to not just make the 'status quo' smaller or larger [through cutting or raising taxes]. It's about tax reform ... and how we invest our money."

Horner, a former small businessman and onetime chief of staff to then-Sen. Dave Durenberger, R-Minn., said that the state needs to be more strategic in commercializing promising technology and assisting industry growth through state universities and trade schools.

"I don't think Minnesota is running out of money," Horner said. "I think too many Minnesotans have run out of hope."

Horner is trying to stake out the "common sense" middle ground from polar opposites Emmer, a conservative, and Dayton, who has called for higher taxes for affluent Minnesotans.

Horner's deficit plan

On Monday, Horner released detailed plans designed to erase the projected state budget deficit of $6 billion in 2011-12 with a combination of tax cuts, increases and investments designed to rekindle growth.

The plan would cut about $2.45 billion from a projected $36 billion budget by phasing out subsidies for JOBZ, ethanol and certain county grants; reducing Minnesota's corporate income tax rate, and streamlining measures already recommended by related working groups. And he would save nearly $2 billion through delayed payments to school districts until 2013.

He also has proposed $2 billion in new revenue through expansion of the sales tax to clothing, similar to most other states, while dropping the overall sales tax rate and accepting federal Medicaid money that Pawlenty has vowed not to take. Much of Horner's tax reform proposals stem from the recommendations of a 2009 business commission, whose recommendations Pawlenty ignored because they called for cutting some taxes while raising others.

Horner is recommending stepped-up road work, broadband access and early childhood education; research at state universities tied to Minnesota's future in energy, technology and health care, and spending that will keep more of the elderly at home and out of more-expensive, state-supported nursing homes.

Emmer, who has not released detailed plans for coping with the budget shortfall, expressed distrust in "green energy" programs and said Minnesota businesses are leaving. He praised South Dakota and Texas for opening their doors to Minnesota companies in search of lower taxes and less regulation.

Dayton, who to plug the deficit supports higher taxes for Minnesota families that generally make more than $250,000, noted that Minnesota's economy grew faster than South Dakota's in the 20 years before Pawlenty took office in 2002. Dayton also said he has identified nearly $1 billion in cuts and efficiencies.

Dayton repeatedly challenged Emmer to detail his budget cuts, noting that health care, human service and education spending consume nearly 85 percent of state spending.

Both Horner and Emmer said they support lifting a state ban on construction of new nuclear power plants. The moratorium has been in place since 1994.

Dayton said it'd be "irresponsible" to lift the prohibition until issues surrounding nuclear waste storage are resolved.

Neal St. Anthony • 612-673-7144

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