Want a successful 2015 legislative session? Here’s some advice.
Beginning this week, the governor and the Legislature will begin crafting the state’s next biennial budget. After two years of one-party control, the state will once again have a divided government. Having served in the Legislature as well as in the Pawlenty and Ventura administrations, I understand the challenges that await policymakers.
I remember well my first days as a new member of the House of Representatives. I wanted to tackle all of Minnesota’s challenges at once — from education to environment to hunting and fishing regulations. I soon learned, however, that focusing on a few key issues was more productive than trying to save the world in five months. With that lesson in mind, here are five principles for legislators as they begin the 2015 session:
1) Remember that we compete in a global economy. Iowa and Wisconsin are no longer our competition. Our public policies should reflect that. Minnesota companies like it here. They want to stay in Minnesota and grow here. So let’s be sure not to enact any new policies that would put Minnesota-based employers at a competitive disadvantage globally.
2) Don’t spend more than you have. After a decade in which Minnesota families and businesses tightened their belts, lawmakers increased spending by 12 percent in the current budget, and annual spending growth is more than twice the rate of GDP growth. Health and human services spending, in particular, continues to grow at an unsustainable pace, with a projected 14 percent increase in the next biennium. If we don’t rein in spending, we’ll be facing deficits again in the coming years — a prospect every legislator wants to avoid.
3) Improve Minnesota’s tax competitiveness. Minnesota-based businesses are shouldering a heavy and growing state tax burden while they compete in a worldwide economy that rewards efficiency. The state’s $1 billion surplus provides some cushion that would allow legislators to enact tax reforms that will grow jobs. Lawmakers should seize the opportunity to improve our state’s tax code with common-sense reforms that encourage businesses to locate, expand and stay in Minnesota.
And there is plenty of room for improvement in our state’s tax system. Minnesota has the fifth-heaviest business property tax burden, the fifth highest per-capita income tax burden and the third-highest corporate income tax. The nonpartisan Tax Foundation’s latest State Business Tax Climate Index ranks Minnesota 47th out of 50. In other words, Minnesota-based businesses are succeeding largely in spite of our policy climate, not because of it.
4) Focus on the workforce. When today’s ninth-graders graduate from high school, 70 percent of all jobs in Minnesota will require some form of postsecondary education. We need an education system that prepares all students for this reality. That means maintaining rigorous education standards, measuring student and teacher performance, boosting anemic high school graduation rates, and ensuring that diplomas are a sign of accomplishment, not merely endurance.
The state should align high school graduation requirements with postsecondary expectations, and reinstate high school graduation standards — an area in which Minnesota has moved backward in recent years. We should also recognize that a four-year university experience is not for everyone. In some cases, a trade school, community college or professional certification program can offer the clearest route to a rewarding career.
5) Make smart investments in our transportation system. Safe and efficient transport of people, goods and services is critical to our state’s competitiveness. Transportation should be a high priority when setting the state’s general fund budget. Maintaining and improving our transportation system takes money, but just as important as what we spend is how we spend it. The state should identify efficiencies to ensure that we are getting good value for taxpayers. And lawmakers should consider the impact of transportation funding proposals on our state’s competitiveness and overall tax burden.
When legislators convene in St. Paul on Tuesday, they will be bombarded with endless new ways to spend taxpayer dollars and/or change state policies. However, if they can keep the above basic principles in mind, the end result will be productive.
Charlie Weaver is executive director of the Minnesota Business Partnership.