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Jobs summit follow-up: Dayton announces plan to free more capital for small businesses

In an effort to get more capital into the hands of those running small businesses in Minnesota, Gov. Mark Dayton announced that the state will deposit $100 million to $200 million into state-chartered banks.

The money will come from state pension funds, managed by the Minnesota State Board of Investment. That board will purchase certificates of deposit from participating banks rather than purchasing treasury notes, which is no great sacrifice given the low rate of return on T-notes at the moment.

Dayton said this is an answer to concerns raised throughout a series of economic summits he held throughout the state in recent months. Over and over, he said, he heard small-business people say that the difficulty in borrowing money is curtailing growth in the state.

Those concerns about access to capital were repeated at Tuesday’s jobs summit in St. Paul.

Dayton made it clear that the state can’t require private lenders to make loans to small businesses in their respective communities but it can “prod” banks to make loans that will allow small businesses to grow.

This action is possible, to a large part, because during the recession, the Federal Deposit Insurance Corp. has raised the amount of funds that will be fully insured. All State Board of Investment funds will be fully insured under the relatively new federal limits.

Dayton admitted that this is just one small step in trying to spur economic growth.

At the same time, he announced other efforts that the state — either through executive actions, government reform or legislation — will make in coming months. Many of these seven ideas stem from the jobs summit, the governor said.

They are:

1. Increasing access to capital for small businesses.

2. Aligning training at state colleges and community colleges with the job market.

3. Continued streamling of government regulations, which Dayton noted had begun, in a bipartisan fashion, in the last legislative session.

4. Investment in state infrastructure, such as roads, bridges and “border-to-border’’ high-speed Internet.

5. Delivery of better government services at lower costs.

6. Increasing exports of state products, coupled with an effort to entice foreign investment in Minnesota.

7. Continued work on closing the achievement gap in both education and employment.

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Comments (2)

  1. Submitted by Paul Brandon on 10/26/2011 - 02:14 pm.

    Point number 2 confuses the role of higher education in employment.
    When colleges try to train students for specific jobs (as industry seems to ask), the jobs that students are trained for often don’t exist by the time that they graduate.
    The role of higher education is to teach students the basic skills necessary to be able to acquire specific job training as they need.
    Historically, it has been the role of businesses to profit the specific training necessary to do a specific job. They are now asking the government (through public higher education) to provide this service to them for free.

  2. Submitted by Dennis Tester on 10/26/2011 - 09:12 pm.

    “They are now asking the government (through public higher education) to provide this service to them for free.”

    No one’s asking government to provide this service for free. If I need to hire Java programmers but the local schools are only teaching C because they’re out of step with the marketplace, I may have to go outside the state (or country) to get them.

    Worse case scenario is my company gets tired of not having an adequately training population so I move to Texas and take my jobs with me.

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