Through thick and, mostly, thin, the Minnesota business lobby has for eight years moved in lock-step with Gov. Tim Pawlenty and the “no new taxes” fiscal agenda, with the noteworthy exception of its support for a 2008 proposal to increase the state gasoline tax to pay for transportation infrastructure needs.
In the 2010 election, business organizations and individuals led by the 2,400-member Minnesota Chamber of Commerce and the CEO-only 110-member Minnesota Business Partnership stood on its platform and, through its independent campaign funding organizations, legally backed specific pro business legislative candidates of both parties and firmly supported Republican Tom Emmer for governor through the sometimes controversial “Minnesota Forward” 527 organization.
Even before the completion of the mandated recount in which Mark Dayton won the governorship, business had largely accepted that the DFLer and former U.S. senator would be the next governor. Many in business are encouraged that Dayton has sought to involve business in various policy discussions, has described his philosophy as “hating waste” and has often encouraged new and better ways for state government to do things.
In post-election comments, the Minnesota Business Partnership’s Charlie Weaver has focused on a common agenda of reform, economic development and the need for a world-class education system to prepare the state’s workforce.
In remarks assessing the House and Senate state legislative elections in which the GOP won control of both houses, the Chamber CEO, Dave Olson, has said that “voters told politicians that they are frustrated with business as usual … we pledge to work with both parties as we offer solutions to the most pressing issues to ensure Minnesota remains competitive in the global marketplace.”
Unusual allies in balancing the budget
Far more than rhetoric, the state Chamber has begun to actively frame a jobs-centered, bold plan to help the new governor and Legislature through its balancing of a projected $6.2 billion deficit that is based on $32 billion in income (a 5 percent increase) over the next two years. Among its unusual allies in this effort are budget reformers that include the Citizens League.
In a recent briefing in St. Louis Park, the state Chamber’s chief lobbyist, Tom Hesse, shared some of the preliminary ideas with several dozen suburban business leaders. The tone was somber and respectful, with the understated Hesse inviting feedback from businesses owners and operators, many of whom expressed a frustration with the current economy that has resulted in employee cut backs and layoffs, also including reductions in health and savings benefits.
When Hesse did not include a 2011 repeal of the $1.6 billion Minnesota corporate income tax, a popular idea to many in the room, one response was “business is not the Republican, DFL or even the Tea Party, we are for business interests and there is no better way for us to move ahead than a repeal of this.”
The 2010 shift of $1.4 billion in payments to local schools, something that Hesse’s plan does not now anticipate repaying in the next two years, got pushback, too, as several in the audience expressed sympathy for strapped districts that would have to borrow money to keep its schools open. “That just doesn’t make sense,” said a CFO who is also an elected local school board member.
The expansion and taxing of gambling revenues was suggested to increase state revenue while others offered cost containment suggestions ranging from a pay cut for legislators to a return to a biennial, every two year legislative session.
‘A long way to go …’
Still, there was uniform agreement that the state ought to live within its means over the next two years while keeping a strategic eye on critical programs that may need more jobs-centered investments; through a fair analysis, axing low-priority programs was suggested, too. The group did not endorse the revenue-raising suggestion of broadening the sales tax to include clothing and other items.
What made this dialogue different was the thorough preparation and conciliatory tone that Hesse and his colleagues are bringing to the discussion at some 30 similar meetings around the state. The Chamber believes that to be responsible, its ideas have to work. Budget reform and redesign are the first priority and “service changes will be necessary to do this and will result in some pain for all, including Minnesota businesses.”
Among the cost-cutting ideas on the table are those in human services, public employee compensation and benefits, transportation and environmental programs. Additionally, the Chamber, in working with the Bush Foundation and local Chamber partners, has undertaken six service redesign programs that could be workable templates for local communities.
After presenting detailed fiscal options and a number of uncomfortable budget trade-offs, Hesse’s plan-in-progress still fell over $1 billion short of closing the gap. “We’ve got a long way to go and we need your help,” he said.
Chuck Slocum is president of The Williston Group, a management consulting firm. He is a current Chamber member and has served as state Republican chair and former executive director of the Minnesota Business Partnership. He can be reached at Chuck [at] WillistonGroup.com.