We received some disturbing news this week about Minnesota’s economy with the announced "restructuring" due to a merger of medical device provider Medtronic. We have been told this will change their "headquartering" although there are promises that no jobs will be lost and that Medtronic will still be making investments for the next 10 years in Minnesota. Advanced Auto Parts of Bloomington and Quad/Graphics in St. Cloud are consolidating their operations with the loss of a few hundred well paying jobs. If the state and relevant local governments had dealings with these companies (subsidies, loans, bonding, tax abatement) with the promise of new jobs in the past, they should be dusting off those laws and agreements to see if what is being promised meets at minimum those legal requirements.
While each of these changes are for different reasons having to do with conditions in their industries, or the situation of the company itself, it’s worth asking, what will replace them? The Dayton administration points to companies that have been lured to Minnesota with tax abatement schemes, "forgivable loans" and other such bait but the fact is that we need to take a hard look at the general conditions that don’t put Minnesota at the top of the list when businesses choose to locate or relocate. The weather was the same, in the 1960s and 70s when we had a growing stable of fortune 500 companies with their headquarters in the state. Hint: it had something to do with tax policy. Although the media would have us believe that those were the years of high tax-high quality of life Minnesota, the truth is that we did not punish corporations for their success elsewhere.
And while these companies’ changes made the newspapers because of the obvious repercussions, right now there are many more smaller decisions that will have a bearing the state’s economy in the near future. In Minnesota today, in some factory office, boardroom or basement home office somebody is deciding not to add workers, not to install new equipment, not to invest in a new opportunity because "the numbers don’t work." The solution is not to shower one time money on entrepreneurs and business owners; the solution, at least at the state level, is to level the playing field with other states.
In Case You Missed it: The Governor and the Legislature raised taxes…and you won’t believe what happened next!
Have a good weekend!
Taxpayers League of Minnesota
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