Tom Bakk: Unlock capital and put state back to work

More than 170,000 Minnesotans are without a job today, and many more are underemployed or have given up looking for a job.

Minnesota is in very serious financial trouble. The next governor will face an unprecedented budget deficit. We cannot raise taxes enough or cut spending enough to get Minnesota and its citizens out of this situation. If we want money to invest in the things Minnesotans value, such as education and health care, the next governor must make putting people back to work the top priority. Minnesota needs a leader who will be dedicated to putting people back to work -- a 24/7 governor who will go anywhere, anytime, in order to create living wage jobs.

As a carpenter who was out of work during the 1981-82 recession, and who ran out of unemployment and health insurance for my young family, I know the importance of having a paycheck on Friday to take care of a family's needs. I know what it means to be unemployed and what people touched by this recession are going through. We must turn this around.

Being a carpenter means being a problem-solver. I'm proud of my common-sense approach at the Capitol. As a legislator and as chair of the Senate Tax Committee, I know what tools we need to create jobs so citizens and businesses can prosper, such as a significant public-works bill. We must leverage the state's bonding capacity to spur construction jobs, update our higher-education institutions and accelerate maintenance on wastewater-treatment facilities to improve our water and environment. This is a tool we should not wait to use, and I am requesting the governor to call a special session to pass a bonding bill before the end of the year.

However, bonding dollars alone provide only limited short-term economic stimulus. We must create a loan guarantee fund that leverages needed capital to build the projected $2 billion to $3 billion worth of shovel-ready projects that are currently idled because of the lack of financing. A partial loan guarantee gives local banks the incentive to begin lending again.

We need a sustainable job creation strategy that helps small businesses -- which create the majority of the jobs -- grow jobs and generate more revenues for the future growth of our state.

The biggest impediment to job growth in our economy is the lack of capital available to businesses both large and small. We need incentives for those who can -- and have the financial means to -- invest in Minnesota businesses and keep those dollars working in Minnesota, not somewhere else.

My long-term job creation and economic growth strategy includes:

•Creation of an "angel investor" tax credit. Angel investors provide much-needed capital to qualified small developing businesses -- such as biotech, clean energy and green manufacturing -- that have a difficult time attracting capital to grow.

•A historic building rehabilitation tax credit would create jobs immediately, spur economic development in our communities and help develop affordable housing -- not to mention preserve some of our state's most beautiful heritage.

•We need to keep Minnesota investment dollars working for Minnesota. Too much precious capital is going elsewhere when it should be working to create jobs and economic growth right here at home.

To help achieve this goal, I will create a tax incentive that leverages the hundreds of millions of dollars in reserves required to be held by the insurance companies operating in our state. My proposal would offer a tax credit to insurers willing to invest reserve dollars in promising small Minnesota businesses. This proposal unlocks millions of dollars in much-needed capital that would be put to work immediately, investing in Minnesota's future businesses and creating a long-term revenue stream supported by stable job growth.

Minnesota is at a crossroad. The next governor will determine if it regains its status as the Star of the North or if it continues to lose its competitive edge. The challenges are too large for the same old partisan rhetoric. Our next governor must be a uniter who can bring Democrats and Republicans, labor and business, and rural, suburban and urban interests together to move Minnesota forward.

Sen. Tom Bakk, DFL-Cook, is a candidate for the DFL endorsement for governor in 2010.