Our opinion: Repeal business-to-business tax hike, keep the jobs

Published 2:20pm Thursday, January 23, 2014

Daily Herald editorial

As the state Legislative session nears, Minnesotans should heed a move by Hormel Foods Corp. The Austin-based company announced on Jan. 14 it would cut work for 75 employees in St. James, Minn., and move that operation to Dubuque, Iowa, where it could add about 90 jobs. And while the company won’t say what all precipitated the move, we can’t help but think Minnesota’s recent tax increases for businesses, and Iowa’s $4.1 million in tax incentives for an expansion weren’t checkmarks for the land of 10,000 lakes.

Hormel chose to move its Bacon Bits production from a Tony Downs Food facility in St. James to its own plant, Progressive Processing in Dubuque, so there were obviously other factors, like production costs versus outsourcing expenses. But Democratic Gov. Mark Dayton and the DFL-controlled legislature certainly didn’t help matters when they passed new taxes on certain business transactions last session.

Conversely, in November Dubuque and Iowa state officials approved a $4.1-million incentives package in hopes of luring the expansion to the area. Included in the package were state tax benefits, a jobs-training partnership with Northeast Iowa Community College and an extension of an existing tax increment financing agreement with the city.

Dayton is now considering a repeal of some of those tax increases for businesses, but he’s already facing resistance from the Senate Democratic leader, who, unlike the governor, is not up for re-election this November.

Lawmakers and their constituents should consider Hormel’s move and others like it a warning, and consider the ramifications of tax hikes on businesses. The state has a lot to offer, but right now that doesn’t include a cheaper cost of doing business. Legislators should repeal the business-to-business tax increases.

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