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.”
It’s unclear yet whether those fears are founded.
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.”
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.”