Should the state work to entice new businesses to expand or relocate to rural Minnesota?
As we currently face a $935 million budget deficit, my answer to this question would be yes. To me, the best way to turn the economy around is to put more people to work by creating jobs.
The House DFL apparently believes otherwise, as it is trying to eliminate programs designed to bring good-paying jobs to rural Minnesotans.
Recently, the majority party approved taxes legislation that eliminates Job Opportunity Building Zones. JOBZ offers tax exemptions to companies that choose to locate, relocate, or expand in rural Minnesota communities if they provide higher-paying jobs to their employees.
So far, 339 businesses have participated, and they have created nearly 5,500 full-time jobs. It has been a godsend for many communities located along the borders of South Dakota, Iowa, and Wisconsin, as the program has enticed many companies to either stay in Minnesota or encourage them to move to our rural areas.
Four of these JOBZ businesses are located in Red Wing. Two new JOBZ businesses in Zumbrota held their ribbon-cutting ceremony earlier this month.
But if the majority party has its way, JOBZ and other tax credit programs will disappear.
If JOBZ is so bad, then why did Wisconsin quickly follow Minnesota's lead and develop a similar law? According to the Wisconsin Legislature, lawmakers crafted this program "after a similar business incentive program in Minnesota that has successfully helped generate nearly $400 million in new capital investments and created nearly 2,500 new jobs in its first year."
Economic development officials on the other side of the river have to be smiling over discussions to end our JOBZ program.
Tough tax climate
And if you take away JOBZ and other job growth programs, why would businesses want to relocate here? The non-partisan Tax Foundation ranks Minnesota's business tax climate at 42nd in the nation. The Small Business & Entrepreneurship Council ranks states from best to worst in terms of the costs of their tax systems on entrepreneurship and small business. It used 16 different tax measures, and combines those into one tax score.
Minnesota is ranked 49th.
It's also worth noting that Wisconsin has 48 total incentive programs to attract new business, while Iowa has 31 and North Dakota has 22.
Minnesota has 13.
Let's face it, Minnesota's job climate is not improving; it's getting worse.
Northwest Airlines has agreed to merge with Delta Air Lines and will move its headquarters out of Minnesota. Losing Northwest could cost Minnesota 13,000 jobs. Medtronic recently announced it will terminate 350 jobs in Minnesota. Home Depot recently announced it was eliminating positions in Minnesota.
And to respond to this bad news, the Minnesota House approves a plan that eliminates a program designed to lure businesses to our state.
To me, it's clear that businesses are suffocating under the oppression of Minnesota's government. Until we lower taxes on businesses, why would out-of-state companies relocate in Minnesota?
By the time you read this, I'm hopeful this plan will have died on the vine and not become law. But even if that best-case scenario happens, the question is worth asking: Should Minnesota provide tax exemptions to businesses looking to expand or relocate in our state in exchange for putting more of our residents to work?
Judging by the positive numbers generated since the inception of JOBZ, the answer should be a resounding yes.
Rep. Steve Drazkowski, R-Wabasha, can be reached at 651) 296-2273 or email@example.com.