ROCHESTER — Gov. Tim Walz touted southeast Minnesota's economic diversity and innovations in medical science Wednesday in Rochester, promising more effort to advertise the region's benefits to attract more workers and businesses.

"There are few places certainly in the United States, almost globally, where you have a community that is situated in a relatively rural area that has a global reach the way the city of Rochester does," Walz said.

The governor and state officials toured a biotechnology lab, heard from entrepreneurs during a roundtable meeting and spoke to more than 200 business owners and community leaders at an economic development group's luncheon.

Walz highlighted his business-related budget proposals to encourage business growth.

That includes a proposed $10 million in Angel Tax Credits, which would go to investors who fund early-stage businesses focused on technology and new proprietary products, processes or services.

Walz also wants $150 million for a Minnesota Forward Fund, which would be used for grants and loans for large-scale manufacturing and production projects.

Those proposals come as a DFL-controlled Legislature decides how to use a $17.5 billion budget surplus. Republicans say Walz and DFL priorities add too much to the state's bottom line, preferring to use a majority of the surplus for tax cuts and credits to residents and businesses.

At the same time, state officials are starting to expand marketing opportunities to draw workers and businesses to Minnesota.

Walz said Explore Minnesota, the state's tourism bureau, plans to add staff to attract more businesses to the state, while the Department of Employment and Economic Development is hiring directors in an effort to help small businesses as well as communities of color, refugees and immigrants.

And the governor said he plans to lobby for more economic development money to attract major businesses.

While Mayo Clinic remains the region's largest employer, the Rochester area has become a draw for biomedical companies in recent years. That's due in part to the city's Destination Medical Center initiative, which helped fund two buildings designed for biomedical businesses in recent years, with plans for a third building in the works.

Walz told business owners that he spoke this week with officials from Victoria, Australia, who want to learn more about Rochester's biomedical growth.

"They're viewing here as a model, and they're interested to pair up with us," he said.

Rochester-area business owners urged Walz and state officials to push for more economic incentives.

Bill Mirsch, CEO of Mill Creek Life Sciences, said the 13-year-old biotechnology business was partly funded through tax credits and the state-funded Regenerative Medicine Minnesota, which allocates grant money to bio-businesses. Mirsch said the state should build on that by investing in expansion opportunities once small businesses are established.

"You get to a point where you're kind of in a valley," he said. "If we had $100 million in revenue, it'd be no problem, but we're at $5 million of revenue. Venture capitalists, they won't risk like a commercial bank, and they want an 18-month turnaround."

Several business owners noted the hiring difficulties employers face. Rochester has one of the tightest labor markets in Minnesota, which itself is seeing record labor participation. State officials theorize part of the missing labor pool is parents choosing to leave the workforce to care for children because of high child-care costs.

Other business owners stressed the need for less expensive insurance and statewide paid family and medical leave.

Sarah Richardson, founder and CEO of Rochester-based Neighborly Creative, said that when three of her five all-women staff became pregnant last year, she began offering paid leave for workers, including herself — she gave birth a week ago.

One of Richardson's employees is struggling to find child care.

"They called 24 day-care providers locally," she said. "No one's responding."