Minnesota Legislature's 2013 legacy: Why?

  • Article by: DAVID C. OLSON
  • Updated: May 21, 2013 - 8:37 PM

Why did DFL leaders seek more government at higher cost? Why didn’t they listen to our suggestions?

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(left to right) House Speaker Paul Thissen and Senate Majority Leader Tom Bakk.

Photo: Bruce Bisping, Star Tribune

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Why did legislators raise permanent taxes by more than $2 billion to resolve a $627 million short-term deficit? They could have adopted a balanced approach by going through the budget line by line, eliminating unnecessary and wasteful spending.

Why shouldn’t K-12 teachers have to pass a basic skills test before they enter a classroom? All students merit having the most effective teachers.

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.

That’s just the beginning.

The Legislature adjourned Monday, leaving a trail of votes certain to impact all businesses and all Minnesotans.

Dayton and legislative leaders chose a singular path of doing business as usual. They abandoned any effort to prioritize, reform and redesign operations and services. The result is more government at higher cost — with no guarantee of better government or improved quality of life for Minnesotans.

We can do better. The Minnesota Chamber of Commerce, as leader of the United for Jobs Coalition, suggested alternatives, but our ideas and the ideas of others were ignored.

The shortcomings of this session are evident in the Legislature’s entire scope of work — from taxes and spending, to health policy and education, environment and energy, and areas in between.

Why do Minnesota’s highest wage-earners have to pay one of the highest income tax rates in the nation? The top tier is now 9.85 percent, a 25 percent increase from the existing 7.85 percent and fourth-highest in the nation. The higher tax will impact more than 20,000 small businesses whose owners run their income through personal income tax returns. They pay taxes on this income even if they leave some of it in the business to finance growth. The higher tax also hinders the ability to recruit top-level talent to Minnesota jobs.

Why did we need to raise solar energy standards and increase electricity costs for businesses and residences? Minnesota already has among 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.

Why are we raising corporate income taxes on the Minnesota-based corporations that we value so highly in our state? Minnesota’s tax rate already ranks third-highest in the nation; other states and nations are working to lower tax burdens.

Why do we have to pick winners and losers in tax reform by raising taxes on all businesses to provide tax exemptions or tax benefits for a few select companies? Though we’ve long advocated for an upfront sales tax exemption on capital equipment, we do not support funding it by taxing other business services.

The Legislature didn’t have to go down this path.

House Speaker Paul Thissen and Senate Majority Leader Tom Bakk, at our invitation, met with our board of directors on Dec. 5. They pledged to work hand in hand with the Minnesota Chamber on strategies to grow the state’s economy.

Chamber leaders also met with Dayton’s chief of staff on Feb. 19 to lay out alternatives to spending increases. From session start to session end, our staff and members worked with elected officials to recommend redesign and reform measures focused on strengthening our economy to improve the lives of all Minnesotans.

Yet, one by one, nearly all our ideas were rejected. The governor and legislative leaders instead turned the clock back to 1990. We are left with tired strategies that will only challenge economic growth.

All Minnesotans should ask their elected officials: Why? Then underscore the point: There were alternatives. We can do better.

Minnesota cannot afford to raise the cost of doing business. The state lost 14,700 jobs in March and April; our job growth numbers are lagging the U.S. average of 1.6 percent. The economic recovery remains fragile.

As neighboring states are erecting billboards on our borders welcoming business, what message is Minnesota sending? Quite the opposite, I am afraid.

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David Olson is president of the Minnesota Chamber of Commerce.

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