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Legislators challenge Wisconsin's business-climate claims

Posted by: Jim Ragsdale under Gov. Mark Dayton, Minnesota legislature Updated: August 29, 2013 - 4:58 PM

A House committee heard testimony Thursday that Minnesota is winning the battle for businesses and jobs with Wisconsin despite the divergent paths the two states have taken in recent years.

Rep. Joe Atkins, DFL-Inver Grove Heights, called the meeting of the House Commerce and Consumer Protection committee, which he chairs, in part to look into claims by Wisconsin Gov. Scott Walker that his state is in a stronger position to attract businesses than Minnesota.

"The objective data shows that frankly Minnesota is kicking butt relative to Wisconsin on everything from employment and job creation to school test scores, educated work force and a host of other factors and rankings," Atkins said after the hearing. "I understand the desire to promote one's state, but he's full of baloney when it comes to saying that Wisconsin is a better place to put your business than Minnesota."

The committee heard a presentation from Myles Shaver, professor of strategic management at the University of Minnesota's Carlson School of Management, about Minnesota's historic strength in hosting headquarters for major U.S. corporations. Shaver's presentation said Minnesota tends to "grow companies" rather than lure them from other states.

As of 2011, Shaver said, Minnesota's 20 Fortune 500 headquarters -- including Target, UnitedHealth Group, 3M and General Mills -- rank eighth in the nation, his presentation said. When adjusted for population, Minnesota comes out on top.

The committee also prepared a listing of measures of economic performance in which Minnesota has outperformed Wisconsin, including job growth since 2010, when GOP Gov. Walker and Minnesota's DFL governor, Mark Dayton, were elected. In measures of median household income, state economic growth and unemployment rate, Minnesota comes out ahead, according to the committee's analysis.

Walker gained fame (and infamy among his opponents) in 2011 by greatly weakening public employee unions, but more recently he has focused on job creation. He has said that Wisconsin's adoption of a production tax credit, while Minnesota raised income taxes and some business-to-business taxes, creates an opportunity for Wisconsin in the interstate rivalry.

Rep. Greg Davids, R-Preston, a former tax committee chairman and member of Atkins' committee, said he believes the threat from neighboring states is real after the tax hikes enacted this year. In addition to raising the income tax for high earners, Dayton and the Legislature enacted new taxes on warehouse services, equipment repairs and other services. Davids said additional changes in corporate taxes, aimed at closing loopholes, have hit hard for multinational firms such as IBM in Rochester.

"When was the last time a Fortune 500 company expanded in Minnesota?" Davids said. He said his southeastern district borders Wisconsin and Iowa, and he worries about losing jobs to surrounding states after the tax hikes of the 2013 session.

"It was probably the most anti-business session I can ever remember," Davids said.

 

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