Richard Murphy, who heads a generations-old Minnesota business, is the point man working on the 2014 Minnesota Legislature to repeal the ill-advised “warehouse tax” passed last year that is scheduled to commence next April. Murphy, the boss and owner at Murphy Warehouse, a third-party logistics and storage firm, has hosted Gov. Mark Dayton, DFL and Republican legislators, and met with a wooing Wisconsin Gov. Scott Walker.
“This summer, we doubled our space in Kansas City and are exploring whether two other accounts could be served from there,” Murphy e-mailed recently. “Many of our clients are not happy about the prospect of a 7-to-8 percent rate increase to cover this tax and have expressed that they may have to look elsewhere … We have also stressed how Gov. Dayton and the Minnesota Department of Employment and Economic Development … who travel the country seeking new businesses … forget [the businesses that may be] pushed out the back door.”
A proposed across-the-board business-to-business sales tax proposed by Dayton in February mobilized broad business opposition. Dayton backed off the proposal. But when legislators rolled out a tax bill, a few industries were still slated for a sales tax expansion. The “storage tax,” a tax on farm equipment and another business-to-business tax were included, which would raise about $200 million, ironically, to partly offset some other tax breaks.
Regardless, these targeted taxes are a bad idea, as the Minnesota Chamber of Commerce and others have argued. Moreover, as a recent tax commission concluded, a better way to generate sufficient state revenue, and add some stability to revenue streams, would be to apply the Minnesota sales tax more broadly to clothing, consumer services and, possibly, even food. Lower the overall tax rate and use income tax credits to shield the working class. The Mall of America, which was subsidized in its original construction and current expansion, will fight the clothing tax, proving that business is as divided as consumers over “fair taxation.” But there is no reason to exempt high-buck designer shirts and jeans over a purchase at the local hardware store.
Only third-party warehouse operators would be affected. Target warehouses were exempted. And Red Wing Shoes learned that it is exempt because Red Wing stores only its own goods.
Minnesota-bred Stumpf named Banker of the Year
Wells Fargo CEO John Stumpf, who grew up on a Minnesota farm, was named Banker of the Year by the American Banker, which opened a profile this way:
“John Stumpf, a banker who earned almost $23 million last year, is cheerfully picking the stuffing out of a cracked leather armchair in his office. The chair, inherited from an even more frugal predecessor, is the most decayed of a worn set around Stumpf’s conference table, a perfect set piece for his brand of subtle showmanship. He revels in his humble surroundings, proudly pointing out the “shabby” decor and rust-red carpet (“very ’70s”) of his yellow-lit executive suite.
“Asked if Wells Fargo would ever upgrade its San Francisco headquarters or consolidate its scattered offices around the city into a gleaming flagship, something to rival Manhattan’s spaceship — like Bank of America tower or its elegant new Goldman Sachs building, Stumpf scoffs: ‘That’s not us.’
“This is classic Stumpf, CEO of one of the world’s most valuable banks, and the walking embodiment of all the contradictions inherent in Wells Fargo’s recent success. Earnest yet shrewd, Stumpf has overseen the company’s transformation into an increasingly complex, too-big-to-fail bank — while working almost as hard to keep it cloaked in the culture and rhetoric of the small, local, friendly banks he grew up with. This year, fresh reputation damage, lingering business problems and the continued fallout from crisis-era acquisitions overpowered the agendas of other large financial institutions. But a largely unscathed Wells, which made its own transformational acquisition at the height of the crisis with the purchase of Wachovia, was able to keep its emphasis on service and bread-and-butter banking intact. It’s a national firm in scope, but it has a regional touch for the customer base, ”says Marty Mosby, an analyst who covers Wells Fargo for Guggenheim Partners.
community banks raise profitS
Want to see how a small lender in Minnesota is doing? Check out the Star Tribune’s searchable database of banks at www.star tribune.com/bankscorecard.
The Star Tribune updates the database each quarter with the latest numbers from the Federal Deposit Insurance Corp. (FDIC), which includes all FDIC-insured institutions in Minnesota, mostly community banks. You can find total assets and loan levels and see how profitable, or not, a bank is.
According to the FDIC’s latest report, out Tuesday, the state’s community banks reported combined profits of $528 million through the third quarter of the year — a 34 percent jump from a year earlier. Total combined loan volume, however, slipped about 1.5 percent, as banks continue to wrestle with weak demand for loans.
• A Toro Co. irrigation product has won a new product contest for the third year in a row at an important industry trade show. The Evolution irrigation controller won the New Product contest in the Turf/Landscape category at the annual Irrigation Show & Education Conference in Austin, Texas. The Evolution controller was designed by Toro to function like a traditional time-based controller but with the ability to upgrade into a “smart” controller with the addition of water-saving upgrades at installation or as a customer’s needs change or grow. The base model of the Evolution controller is designed to be easy for consumers to understand and operate and can include rain/moisture sensors. Irrigation products, once all about mowing and snow blowing, are growth businesses for Toro.
• As congressional budget negotiators look for ways to lower deficits, Sen. Bernie Sanders, Ind.-Vt., and Rep. Keith Ellison, D-Minn., have introduced a bill that would cut tax subsidies to oil, gas and coal industries. Ellison said the (long-shot) “End Polluter Welfare Act of 2013” would cut tax breaks, close loopholes, end taxpayer-funded fossil fuel research. This is a looooong shot, despite estimated savings of $100 billion-plus over 10 years. The fossil fuel lobby helped end some ethanol subsidies. Ethanol blends accounts for about 10 percent of U.S. gasoline sales. The White House 2014 budget proposal calls for eliminating several of the provisions cited in the Sanders-Ellison bill.
• Edina-based Nametag International has created a new division called AgTag that will work with agribusiness companies. Veteran principals Mollie Young and Brigid Levin worked with Land O’Lakes to create the ‘WinField’ moniker in 2009 for its seed and crop-protection business.