Turns out Minnesota business did have something to fear

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Just after the 2022 election delivered control of state government to Minnesota DFLers, I wrote a commentary on these pages outlining how Democrats could work with our region's business community to strengthen our economy and improve the lives of Minnesotans.

I even said, "Business has nothing to fear from DFL dominance" (Nov. 16, 2022).

Now that the legislative session is complete, it is fair to say DFLers did not heed my advice or follow the approach I suggested. Instead, they acted like this might be the only time they'll have full control and pressed forward with a laundry list of priorities, seemingly without regard for how it will impact our state's ability to keep and grow jobs.

In their desire to complete a checklist of pent-up issues from their left flank, DFLers ignored the guardrails we recommended. In November I wrote that the "surplus should temper the desire of some Democrats to raise taxes, which would be a bad idea as companies and families deal with unprecedented levels of inflation and economists predict a recession." I'm guessing that Democrats didn't exactly have that sentence pinned to their office corkboard during the session.

Let's take a look at the past six months — "How it started" vs. "How it's going."

How it's going: We support the new child tax credit, which will move thousands of Minnesota children out of poverty. But many of the actions of the DFL trifecta will add to rising costs facing businesses and families. In particular, the paid family and medical leave program was an opportunity where policymakers should have listened to suggestions to allow flexibility regarding benefit packages.

On the plus side, affordable housing received new funding, which will help our state maintain our advantage in this area. And the budget included a one-time investment of $500 million for the Minnesota Forward Fund to support large-scale economic development projects in critical industries including semiconductor chips, bioindustrial manufacturing innovation and sustainable aviation fuel. Bipartisan agreement on a bonding bill was also a positive element of this session.

How it started: With a record surplus, we pressed elected officials to hold the line on taxes, while making smart one-time investments.

How it's going: Most Minnesotans are stunned when they learn the Legislature tacked billions of dollars in new taxes on top of a $17.5 billion surplus. Some of the worst ideas — a new income tax bracket and a worldwide combined reporting tax — were fortunately jettisoned. But the message to entrepreneurs and business leaders seems to be that their contributions to the state — taxes paid, employee payroll and benefits, and support for nonprofits — are not top of mind.

Support for the business community was far too infrequent in St. Paul. While DFL legislators sometimes met with representatives from the business community, that feedback was rarely meaningfully incorporated into final legislation.

How it's going: This session did not incorporate the level of bipartisan cooperation that a one-seat DFL majority in the Senate should have indicated. Over the past three decades, Minnesota state government has almost always featured divided government. While it's sometimes not pretty, we expect our lawmakers to work across the aisle and to come to the middle. That's not what happened this year.

Looking ahead, we'll continue to make the case for a balanced approach. What happened at the State Capitol in 2023 was out of balance. We'll need corrective action to bolster our ability to create and grow jobs here.

Ultimately, I am an optimist. Minneapolis-St. Paul and Minnesota have so much going for us. But that shouldn't be an excuse for policymakers to play fast and loose with the foundation of our success. We need a greater acknowledgment by elected officials that businesses, employers and entrepreneurs are critical to the health of our state.

Balance has a way of returning to Minnesota and we'll be working to make it happen.