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Wary business community appears ready to work with DFL Legislature

Rep. Paul Thissen, Gov. Mark Dayton and Sen. Tom Bakk
Courtesy of Gov. Dayton's office
Will House Speaker-designate Paul Thissen, Gov. Mark Dayton and soon-to-be Senate Majority Leader Tom Bakk stay true to their pro-business message?

DFL majorities in the state Legislature — coupled with a Democratic governor for the first time in 22 years — may not spell doom for Minnesota’s business community, despite some members’ post-Election Day fears.

Will the new legislative majorities — with the addition of potentially more-moderate suburban Democrats — stay true to their pro-business message from the campaign trail?

Senate Minority Leader Tom Bakk, who will assume leadership of the body in January, raised the point almost immediately after the elections.

Standing beside Gov. Mark Dayton and soon-to-be House Speaker Paul Thissen at the Capitol hours after DFLers took back control, Bakk got about three lines into his second-day victory speech before offering a plaudit to the business community.

“I did reach out to the state Chamber of Commerce today and spoke with the president, even though he sent a lot of literature out against my candidates,” Bakk joked. “We do intend to engage the business community in … conversation here at the Capitol and look forward to working with them, with the governor and the House to move Minnesota forward.”

But that didn’t stop Minnesota Chamber of Commerce President David Olson from writing in the Star Tribune the next day that “the statewide business community is more than a bit nervous.”

“We're prepared for two difficult years at the State Capitol,” he added. “We are certain to be faced with major initiatives to raise taxes, increase government spending and add regulations.”

Early signals

It’s unclear yet whether those fears are founded.

David Olson
David Olson

Olson was more mellow when MinnPost caught up with him. “I don’t have a crystal ball, but we’re going to go in hoping that we can [work with Democrats],” he said in an interview. “Obviously, we’ll be able to tell fairly early if folks were staying true to their campaign message.”

His best-case scenario for the business community this session includes education reform for workforce development, tax reform that doesn’t raise state revenue overall and continued work on streamlined regulations.

Charlie Weaver, executive director of the Minnesota Business Partnership, said his organization is willing to look at new revenue that doesn’t put the state “at a competitive disadvantage in terms of job growth.”

He also said the key reform his group would be pushing again this session is an end to the “last in, first out” teacher tenure system in Minnesota.

Dayton campaigned on raising taxes for the wealthy, but Republicans blocked his efforts for the first half of his term. So far, DFL leaders have said that “tax reform” is a key piece of their agenda, but it’s difficult to say what those reforms might look like – or whether they’ll be “revenue neutral.”

Changing the teacher tenure system, better known as LIFO, is likely off the table for Democrats this session, especially since many of their traditional donors and supporters oppose it.

But Dayton has shown an appetite for loosening government regulations to spur business development. He pre-empted GOP lawmakers in the 2011 session, using executive authority to streamline environmental permitting. Republicans, however, didn’t think the governor went far enough.

“They’re just panicking because businesses are not used to having a changed political environment,” said David Schultz, an elections expert at Hamline University. “They’ve worked themselves into a lather about it.”

Charlie Weaver
Charlie Weaver

Schultz added that businesses did well the last time DFLers had control of state government under Gov. Rudy Perpich in 1990. Weaver, who served as a Republican in the state House during those years, said the Business Partnership was able to work closely with the governor then to pass tax reform and open enrollment for schools.

“There’s a track record of being able to work with a DFL Legislature, and frankly, growing jobs isn’t a partisan issue,” Weaver said.

Perhaps the most interesting dynamic of the session will be watching how suburban Democrats vote. Schultz said there’s no guarantee that a new lawmaker like Melisa Franzen of Edina, for example, who campaigned on a pro-business platform, will support massive tax hikes and heavy regulations.

Sen. Terri Bonoff of Minnetonka, the shining star of pro-business Democrats who received the Chamber’s backing this election, said its “imperative” that DFLers work with business groups because “the fragile economic recovery is at stake.”

“I have a very strong relationship with those folks at the Chamber, and I plan to work closely with them,” said Bonoff, who joined Republicans and the business community in attempting to end LIFO last session.

The Chamber has been honing its agenda for months, and Olson said its issues aren’t changing because a different party is in political control, just the tactics to address them.

“We’re going to bring our agenda. We’re going to bank on the campaign promises they made,” he said. “Here we come.”

Business groups active politically

Perhaps what’s clearest for DFLers in the Legislature is what’s at stake if they sweep the business community aside with waves of spending and burdensome regulations: their majorities.

Business groups, including political committees run by the state Chamber and the Business Partnership, spent hundreds of thousands of dollars this election attempting to elect Republicans.

“To the victor goes the spoils, so I think we’re all professionals and we all want what’s best for Minnesota,” Weaver said of the necessity of working together.

The value of working together is true for the DFL, too.

 “If they don’t oppose you in the next election, it’s certainly easier for you to stay in power,” Schultz said of the business coalitions. “It’s better to buy them off than it is to fight them.”

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Comments (18)

Sweep aside?

No one's talking about sweeping business aside. Business just have to realize that Republican economics and their support of those economics have been bad for business. I keep asking other business people why they think recessions, poor education, weak infrastructure, and non-existent public policy are good for business and I've yet to get a reply.

To expand on Mr. Udstrand's point

And as Bill Clinton reminded us all, Democratic policies have proven to be better for business than Republican ones. It may be that vulture capitalism, (piling up big gobs of cash and excessive pay-packages for CEOs, upper management and hedge fund profiteers, freezing or reducing the wages of workers, shifting health care and environmental costs to tax payers and "harvesting" companies after bankrupting them) thrives best under republican rule -- but it is neither healthy nor sustainable.

The public

Has every reason to be wary of the business community.

Chamber not the only Biz group

The historically monumental failure of trickle down to actually trickle down and the tragic result of deregulation resulting in our deep recession should be enough to convince anyone that Republican economics has been, as George Bush Sr. called it, voodoo economics.

It has long been a fable that business groups must necessarily support Republicans. Many business leaders believe that the public investment in schools, science, roads, courts, as well as expense deductions for building businesses are springboards to business success. The work of Growth and Justice consistently highlights the complimentary nature of business and the community. MN2020 puts forth a vision of strong business opportunities when the community is healthy.

Small Business Minnesota is a relatively new membership organization (an alternative to right leaning chambers) that believes small business is an integral part of the local community and believes healthy communities and healthy profitable small businesses are mutually supportive not mutually exclusive. SBM members -all small business owners- personally advocate (no hired lobbyists) at the state and national for the real needs of small business in Minnesota. (see www.smallbusinessmn.org)

Chamber doesn't speak for "business"

Far more businesses in Minnesota are NOT members of the Minnesota Chamber or the Minnesota Business Partnership than are. Many business owners have reviewed the policy positions taken by these organizations and REJECTED support for them. Small businesses in particular have reason to see that these organizations often work against their interests; as an example, the Chamber opposed caps on credit card swipe fees that are now reducing overhead costs for Main Street businesses.

About 60,000 new businesses are formed in Minnesota each year, and their policy priorities and views are as diverse as the state's population. There is no such thing as "the Minnesota business community."

And perhaps a good first step

And perhaps a good first step towards solving our state's problems is for not only the legislature but also the press to understand what you said and stop thinking that the business groups with the most PAC money represent most businesses.

34,700 jobs created in MN in the past year

If each new business created only one job, the state would have had at least 60,000 new jobs created if 60,000 new businesses were formed in the last year. The latest figure I saw from MPR on Nov. 15 was 34,700 new jobs. I'm sure that there is an explanation for this.

Easy explanation

Not all businesses, let alone new businesses, hire people. Many, probably most, only employ one person--the owner. And in many cases, the business does not employ that one person for the equivalent of a full-time job. As a result, they're not often counted when surveys of job creation and employment are done. That doesn't make them unimportant, though. Many local products and services are produced by such businesses. If you buy local, not only do you support a local job, but you increase the odds of those small businesses of reaching a point where they can hire others.

New Jobs

Your figures assumes that no one was laid off in the past year and no businesses closed.

Cof C

Very well said. Your posting reinforces once again that you can't make money without reinvesting in your community. Education, airports, roads, and rails are all important parts of our community that helps businesses grow. We need to build a community that attracts the best and brightest minds that businesses so covet. Digging in our heels and promoting a cold Mississippi is not the way to accomplish that goal.

Thanks for the info

On Small Business Minnesota - plan to join tomorrow.

Based on David Olson's tone...

it doesn't sound to me like he's at all interested in working with the DFL. It sounds more like if he doesn't get "his agenda" met, he'll be working with obstructionist Republicans and then in the next election cycle, guess what? Blame the Democrats!

A good idea

'Twould be a good idea if several/many/all of the people who purport to be business "leaders" read the first four comments above.

The state is in trouble financially precisely because "no new taxes" and "revenue neutral" has been the mantra for lo, these many years, while roads crumble, schools have to borrow money to operate, and state aid to local governments has been strangled to death. Meanwhile, at least in the past 3 years, corporate profits are at an all-time high.

As for the business assertion about a connection between taxes and employment, we should keep in mind that Wyoming, Nevada and Washington state have zero corporate income tax, yet all three have substantial unemployment, even if we make allowances for Nevada's very high rate because its primary business is relieving people of their money via gambling.

There's ample evidence – anecdotal, statistical, real-world and academic – that "trickle-down" does not work, and never has. The people running the C of C need to get out of their paneled offices more often.

What About Us

“We do intend to engage the business community in … conversation here at the Capitol and look forward to working with them, with the governor and the House to move Minnesota forward.”

How about working with and for the people? Isn't that what government was created for?

So What's The Problem

“We're prepared for two difficult years at the State Capitol,” he added. “We are certain to be faced with major initiatives to raise taxes, increase government spending and add regulations.”

The taxes will help pay for society, especially infrastructure that businesses need to get their employees to work and products to market. The government spending will help as it will put people back to work, something that's been sorely missing these past few years. Not to mention the money spent in turn goes to businesses, who provide the products and services that the government buys.

And the additional regulations, if any, are there to provide a level playing field so your competitors can't take advantage of you. Not to mention prevent businesses from poisoning our air and water.

So what is the Chamber of Commerce really crying about? So far I'm not that impressed with their commentary.

Lie down with dogs, Get up with fleas.

It seems it is the business community that needs to show more balance, at least the Chamber of Commerce. They associated themselves with a Republican party that spent a lot of time pushing voter suppression, anti-gay legislation, and all sorts of ugly sentiment, and few truly constructive job creation ideas. The idea that LIFO will somehow fix education is not based on any facts. It's a tool to attack Democrats. Research shows that the best way to improve education is to improve the quality of principals and better administration. The many small business owners I know did not support the Chamber of Commerce and the Republican agenda.

Minnesota Democrats want business to prosper. It's good for the state and good for their supporters. Protecting the middle-class and working class folks is good for business, and business' support for the right wing agenda always seemed counter-productive, since those policies drive wages down and decrease the ability of folks to buy what business produces. Business needs to make the effort to work with both ends of the spectrum, and not throw all its eggs in the right wing basket.

I'm sure it's a little scary.

The thing that might be sending a few shivers down spines is the fact that the slavish devotion to the Republican party and it's magic plans is rendering this "business" community irrelevant. It's gotten to the point where they can't elect politicians, write or pass legislation, or speak for legitimately for the business community. They're simply not needed, as long as the Democrats don't blow it again, we can move forward without these business people. The irony is that they'll benefit as much if not more than anyone else.

How Did The Last Legislature Work Out?

The GOP promised a laser like focus on jobs. We got two amendments (both not job related) and a failure to advance the Southwest LRT, which the Chamber wants.

And they're worried about not getting what they want now?