Dayton Frustrates Businesses

By Andrew Tellijohn

Many in Minnesota’s business community were pleased with the Legislature’s performance during the 2012 legislative session, but they are frustrated with Gov. Mark Dayton for scuttling some of their biggest goals.

Dayton closed the book on the session by vetoing a largely Republican written bill that would have provided property tax relief for small businesses, as well as increasing tax credits for research and development and to those who invest in start-up stage companies.

“It was a priority for the business community,” said Laura Bordelon, senior vice president of advocacy with the Minnesota Chamber of Commerce. “The veto is a complete disappointment.”

It was the second time in May that Dayton vetoed a tax-relief bill. He also previously nixed an education reform measure that would have removed seniority as the main factor in laying off teachers.

“We had some challenges with the governor this year,” Bordelon said.

Dayton, in a letter explaining his tax veto, wrote that Republicans, who have majorities in the House and Senate, passed the bill without consulting his administration and expressed concern that the bill increased future projected deficits. Republicans say Dayton would not meet with them.

“It retains a large imbalance between its significant business tax reductions and virtually no tax relief for anyone else: homeowners, renters, senior citizens and farmers,” Dayton wrote.

That explanation did not satisfy Bordelon or Charlie Weaver, executive director of the Minnesota Business Partnership, both of whom said Republican lawmakers incorporated many of Dayton’s suggestions into the reworked bill.

Those measures included a tax credit for businesses that hire veterans and incentives for hiring interns. The bill also would have provided thousands of jobs through the altering of tax increment financing rules regarding a proposed expansion at the Mall of America.

“It is mystifying to me why he vetoed it,” Weaver said. “I don’t understand it.”

Still, business supporters say the business community still got some of what it wanted.

For the second year in a row, the Legislature and Dayton worked to streamline the state’s permitting process and passed a public works spending bill that is expected to create jobs for trade workers. The chamber also was happy with education reform bills requiring teachers to pass skills tests and linking principal evaluations to test results.

Weaver touted the Vikings stadium construction bill as important in ensuring the team’s future. He called efforts in some districts to punish Republicans who supported the bill by pulling their endorsements “really dumb” and said building a stadium now was more fiscally conservative than waiting another year or losing the franchise and paying considerably more for a stadium later.

“The ability to recruit top executive talent to the state requires that we remain a first-class town,” he said. “Investments in theater, music, parks and pro sports all go hand in hand. Losing an NFL franchise would have been a significant blow.”

Over two years, Weaver said, the Legislature was successful in turning a $6 billion deficit into a $1 billion surplus without raising taxes.

“For the business community that was job one,” he said.

The Minnesota Business Partnership expects to deal with health care issues once the Supreme Court decides on the legality of President Barack Obama’s reform efforts. Weaver said reforming taxes and education also will remain priorities.

“The focus on our agenda is going to be how do we keep Minnesota competitive in this global economy,” he said. “Right now we are not competitive.”

Ken Warner, president of the Willmar Chamber of Commerce, praised the Legislature for not doing anything to make the climate more difficult for business owners and celebrated the bonding bill, which contained nearly $14 million for designing and renovating buildings at Ridgewater College.

Going forward he’d like to see the Legislature move past partisanship bickering, working for the betterment of the state “and not so strong on party and special interest.”

“The economy is finally starting to move a bit,” he said. “We’d like to do everything we can to keep it moving forward and not put the brakes on.”

Moorhead Mayor Mark Voxland was disappointed with Dayton’s veto of the first tax bill because it included a property tax exclusion on the first $200,000 spent on the construction of new homes in Moorhead and Dilworth. That would have matched a similar clause across the border in Fargo. He said he will work to advance that again next year.

“That’s going to be something that I feel is going to be problematic for us,” he said. “It’s not going to help our building trades. That’s the biggest downside I saw.”

While many business groups are frustrated with the governor, Duluth  Area Chamber of Commerce President David Ross was appreciative of the efforts Dayton and the area’s Democratic legislators put forth in helping secure funding for the Multimodal Transportation Center.

The project needed $6 million in state funds to go with other federal and private funding. The project was not specifically included in the public works bill, but ultimately was included as part of an allocation toward “Greater Minnesota Transit.”

“We did receive the funding we needed so we’re very excited about that,” Ross said.

Ross added that he is hopeful a $4 million request for funding Wade Stadium, an aging baseball park in Duluth, will be covered by another pot of money. He also said he was happy the Legislature and Dayton worked together to pass stronger regulations against synthetic drugs.

The only disappointment in Ross’ eyes was the Legislature’s inability to find money to pay back money borrowed from schools over the last few years.

“Our district is struggling mightily,” Ross said. “That would have been a great respite to them.”