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Dayton, DFL leaders unveil three-pronged jobs package for ‘quick’ action

The efforts include targeted tax credits, a $750 million bonding bill and a sales tax charge for Internet sales.

Gov. Mark Dayton
MinnPost photo by James Nord
Gov. Mark Dayton

Gov. Mark Dayton and DFL legislative leaders unveiled a jobs plan this afternoon that includes targeted tax credits, a $750 million bonding bill and a sales tax charge for Internet sales.

The unveiling of the plan also produced several challenges to Republican legislators to “quickly” move on each of the proposals.

“There’s no excuse to sit on the sidelines” is how Paul Thissen, the House minority leader, put it.

But only the tax credit plan would seem to have a chance to move through the process without a tussle. Under that plan, Minnesota businesses of all sizes would receive a $3,000 tax credit for each Minnesotan hired in 2012, assuming those hires come from one of three categories. The first category would those who are unemployed. The second would be veterans, and the third very recent tech school and/or college graduates.

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The credit would be lowered to $1,500 for every hire made in 2013.

This $35 million program, the governor said, would create 10,000 private-sector jobs.

Since it’s focused on the private sector and because it would seem to act as a tax cut for expanding businesses, this is a plan that likely would be embraced by the Republican majority.

Likely tougher going for the others
But two other portions of the plan released by Dayton, Thissen and Senate Minority leader Tom Bakk, likely face tougher going.

DFLers will be proposing a $750 million bonding bill, with details to be released next week.

Bakk is passionate about “early passage” of the bill.

“The construction industry is more than in recession. It’s downright depression,” he said. Bakk chided Republicans for moving slowly on a special bonding bill last session — a $500 million package that didn’t pass until July as part of a settlement to end the government shutdown.

“We lost an entire construction season last session,” said Bakk of the long delays in reaching agreement.

A sales tax for online buys
A third portion of the jobs plan doesn’t amount to much money, but it surely will create interesting debate.

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The governor and DFLers want to apply the state’s sales tax to online purchases. Under current law, out-of-state retailers that don’t have a bricks-and-mortar presence in the state are not required to pay the sales tax. For example, sales taxes from large operations such as Amazon are not collected.

The amount at stake is surprisingly small, about $3.5 million for fiscal 2013, according to the governor.

But DFL legislators said that this issue is “the No.1 priority” of Minnesota retailers. And Sen. Ken Kelash, who represents Richfield and the corporate headquarters of giant Best Buy, said this is a crucial “fairness” issue for Minnesota businesses.

According to the governor’s staff, 12 states have enacted laws similar to the DFL proposal.

This, however, can be a dicey issue for Republican no-new-taxes purists. On the one hand, many in the business community support the proposal as a basic fairness-in-competition issue. But Republican hardliners have said that to apply the tax is the same as creating a new tax.

“Customers go into a Best Buy store, choose the item they want, then go home and order it online [somewhere],” said Kelash. “Best Buy loses a sale and Minnesota loses sales tax.”