Gov. Tim Pawlenty’s “mother lode of tax breaks” plan would give investors in regtional funds tax credits of $20 million over four years.
Bruce Bisping, Star Tribune
Pawlenty unveils package of tax breaks
- Article by: PATRICIA LOPEZ
- Star Tribune
- November 10, 2008 - 10:39 PM
Faced with a state in an economic downturn and a stream of job losses, Gov. Tim Pawlenty on Monday proposed what he called the "mother lode of tax breaks" to companies that create so-called green jobs in the burgeoning field of renewable energy.
The package includes a variation of Pawlenty's JOBZ economic development program, dubbed Green JOBZ, designed to attract investment in sustainable energy projects by offering exemptions from corporate franchise taxes, income tax for investors, capital gains tax and sales tax on goods and services.
"They would still pay the school levy," Pawlenty said, during a State Capitol news conference Monday, just before leaving for a state fly-around to promote the proposal.
Other elements would be aimed at small businesses and specific incentives to expand biomethane, solar and other forms of renewable energy.
The incentives, an initiative for the 2009 legislative session, would cost the state an estimated $3.65 million in 2010-11, nearly double that amount in 2012-13. Investors who pump money into regional investment funds could see tax credits of $20 million over four years, and another program would provide $60 million in tax incentives for insurance companies that put money in businesses with fewer than 100 employees, with at least half of them green businesses.
But, Pawlenty said, the payoff could be thousands of new jobs and a firm stake for Minnesota at the leading edge of the Green Revolution.
"If the economy continues in its awful state -- and it looks like it's going to for the foreseeable future -- it will be more important than ever to do things that will try to encourage investment in job growth in Minnesota," he said. "And for a very small investment in money, these proposals will do that."
DFL leaders in the state House and Senate said they welcomed Pawlenty's ideas and enthusiasm but were dubious about their effectiveness.
"We need new strategies right now," said Sen. Ellen Anderson, DFL-St. Paul. "He's looking at three or four years from now."
Anderson accused Pawlenty of grandstanding, saying he unveiled his proposal at the same time that a joint legislative task force on green jobs, which includes his agency representatives, was meeting in north Minneapolis to develop a unified plan.
"Obviously, he's not real interested in working with the Legislature or even his own people," Anderson said.
Democrats now dominate the House and Senate and could heavily modify Pawlenty's proposals before allowing them to move forward.
Rep. Tim Mahoney, DFL-St. Paul, who leads the House Biosciences and Emerging Technologies Committee, said the state should also look at "wonderful" models other states have created, "some expensive, some inexpensive."
Mahoney said the state also should wait to see how the stimulus package being urged by President-elect Barack Obama may play out. "Let's look at how we can tweak existing programs before we jump onto any new bandwagons."
Anderson said the bipartisan task force, which was created in the last legislative session, expects to release a comprehensive plan for Minnesota's renewable energy industry in the coming months.
Brian McClung, Pawlenty's spokesman, said that "we're glad there's bipartisan interest in these initiatives. We think there's a lot of room for Minnesota to make progress in this area and we welcome legislative ideas."
The Associated Press contributed to this report. Patricia Lopez • 651-222-1288
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