As we all know the best route to turn around our budget crisis is to improve our economy. With 7.3 percent unemployment statewide, 200,000 unemployed Minnesotans — including 6.1 percent unemploymed in Mower County and 8.2 percent in Fillmore County — it is imperative to grow the number of jobs available to Minnesota’s workforce. It is important for private employers to either grow within or move to Minnesota.

Companies looking to move to Minnesota prioritize the most important factors in their decision calculus. These include tax burden, human capital and a quality workforce, incentives, infrastructure and the cost of doing business. There are no surprises here. These are all straight forward, common sense criteria that smart employers take into consideration when looking down the road. The theme coming into this session was jobs, jobs, jobs. Exploring these job growth factors more closely we see how the potential for job growth is faring during this year’s budget discussions.

Taxes

Businesses look at effective tax rates when planning, meaning what taxes are they really going to pay and at what levels. As homeowners know, you don’t pay taxes on 100 percent of your income, you deduct your mortgage interest. People paying student loans deduct student loan interest. We are able to deduct charitable donations, business expenses and a variety of other items that lower our effective tax burden. Businesses are the same. Just because the corporate tax rate is one number doesn’t mean that is what they pay at the end of the year. Smart businesses understand this.

The biggest tax businesses pay is the property tax. The nonpartisan Minnesota Department of Revenue projects the budget passed by the Minnesota House would increase statewide property taxes by $1.4 billion over the next four years. This large increase is due to unfunded mandates passed by the state on to local governments, cuts to local government aid to cities and counties and caps on K-12 funding for which districts may choose to levy the lost revenue.

Workforce

When out of state companies are being courted by Minnesota’s Department of Employment and Economic Development they often ask about the quality of the state’s workforce. What is their education level? Are there colleges nearby that can provide additional training? For the state, this means a quality education system from early childhood through college. Economists will tell you shortchanging education is a fast detour to economic stagnation.

The E-12 House budget is only the second cut to education in the state’s history. While $23 million may not be a huge cut, the reallocation of funding within the bill is troubling to many across the state. Effective methods to close the achievement gap are being discontinued and additional mandates on schools mean less funding goes to the classroom, where it is best used. As has been recently written, the higher education budget is being slashed back to 1998 funding levels while serving tens of thousands more students. This means fewer academic opportunities such as departments and majors, fewer support services such as libraries and technology and loss of top faculty to other states (or countries).

Incentives

Minnesota has strategic programs focused on employee and employer development. The Job Skills Partnership works with employers, employees and local schools to provide specialized training in fields such as manufacturing and technology-related industries. For example, when Blandin Paper Mill near Grand Rapids needed workers with specialized training for their plant, they coordinated with the local college to develop appropriate curriculum and a timely training schedule.

This year, the majority party in the House of Representatives has proposed cutting the Job Skills Partnership by $1.4 million. In St. Paul legislators hear calls for more strategic partnerships between the government and private sector. This is a successful public private partnership and something the state should be doing more of, not cutting back on.

Infrastructure

Efficient movement of goods, services and people is essential to business success. That is one explanation why the state chamber of commerce supported the veto override of the House transportation bill in 2008. They understood the necessity of quality roads, bridges and transit to a dynamic local economy.

The House transportation bill cuts transit funding to the metro and rural parts of the state. The backlog of maintenance projects is staggering. MnDOT projects that it needs an additional $50 billion in funding to repair, maintain and expand the state’s roads and bridges over the next two decades. This staggering shortfall further delays safety improvements and general upkeep.

Cost of doing business

There are hard costs to doing business. Among these are unemployment insurance (UI) and workers compensation. UI is what employers pay to the state for workers who are laid off or downsized. This pool of money receives no state funds, rather it is a self-insured program that pays unemployed workers (at a reduced rate of their previous salary) while they look for their next job. Workers compensation provides benefits for work-related injuries or illness. These two programs operate under state laws but without general fund appropriations.

It is challenging to see how appetizing the table Minnesota is setting this legislative session. The food is uninspiring and there is no dessert. Time still remains for the Republican majority to change the menu and tempt more businesses to dine in Minnesota.

Please continue to let me know what you consider to be the priorities of the state and the solutions you recommend at the state legislature. If you would like to be on my email update list, please send your email address to rep.jeanne.poppe@house.mn. I also hope you will continue to contact me with your questions or suggestions regarding our state budget. I can be reached by email, or at 1-888-682-3180 or 1-651-296-4193, and by mail at 291 State Office Building, 100 Martin Luther King Blvd., St. Paul, MN 55155.