Legislators have themselves a plan
Published 6:34 am Friday, April 2, 2010
By Dan Sparks
The Minnesota Senate this week wrapped up a productive first half of session by passing both a spending reduction bill that eliminates one-third of the state’s budget deficit, and a job-creation package that will spur private investment and new economic development opportunities throughout the state.
The goal of this session is simple: cut out the red ink and get Minnesotans back to work.
Along with the bonding bill passed earlier in March, the legislature has made tremendous progress toward meeting our ambitious goals of balancing the budget and growing new jobs in our state. We’re putting forward a responsible deficit reduction plan while making needed investments in public infrastructure and economic development.
The budget bill passed by both the Senate and House this week will trim $312 million out of the state budget – a big step toward solving the immediate $1 billion deficit facing the state. The plan is similar to the proposed budget released by Gov. Pawlenty in February, with one significant difference: the Governor recommended cutting city and county aid by $450 million for 2012 and beyond. The Senate avoids that deep level of cuts, reducing local aid by $105 million in an effort to protect property tax payers and local services.
The Senate worked hard to reach a compromise that would reduce government spending while protecting core services to the greatest extent possible. Obviously, these cuts still will affect Minnesotans across the state, but some level of spending cuts was necessary to begin to address the state’s major budget shortfall.
Lawmakers also recently passed the Jobs Bill. The overall goal is that the capital investment bill passed earlier in March will get Minnesotans back to work this summer repairing and building the state’s vital public infrastructure.
At the same time, the new incentives put in place with this week’s jobs bill will make Minnesota more attractive for investors and private enterprises, attracting new business and job opportunities for the future.
The job-creation package utilizes a variety of tax credits and financial incentives designed to spark investment and jobs in startup companies, construction projects and local economic development initiatives. The package has the potential to create up to 20,000 new jobs in Minnesota – a big help for the 1,968 Minnesotans that received their last unemployment check in the past four weeks, or the families being affected by the state’s 7.3 percent unemployment rate.
Specifically, the jobs bill includes an Angel Investor Tax Credit, which 29 other states use to lure investments in small, start-up companies. In Minnesota, the credit is focused on attracting investors in high-technology, bioscience and green manufacturing businesses that are trying to get a leg up. The Department of Employment and Economic Development estimates this credit will create up to 6,300 new jobs with an average annual wage of $49,000.
Also included in the bill is a Historic Structure Rehabilitation Credit that is expected to create up to 1,500 new Minnesota jobs in the building trades and architecture sector— both industries that have faced unemployment rates as high as 50 percent in recent years.
The legislation also includes an expanded Research and Development tax credit for businesses; an extension of tax incentives to begin new developments at the Mall of America; and an extension of JOBZ benefits for the Ford Plant site in St. Paul, in hope of attracting a new auto manufacturer to develop the plant once it closes in 2011.
There still is much work to be done in the area of creating jobs and stimulating the economy, but I’m happy with the progress we’ve been able to make thus far. The main priority of the second half of session will be to address the rest of the state’s budget deficit. However, before they proceed, we need to better understand how federal jobs and health care legislation will impact the state’s budget situation. Given the tremendous progress already made, all eyes are on an orderly and timely end of session. The Legislature must adjourn on or before May 17.
Please don’t hesitate to contact me with your suggestions or concerns as the budget process continues.
You may reach me at mailto:email@example.com; 651-296-9248; or Room 317 State Capitol, St. Paul, MN 55155.