Compromise needed for greater Minnesota business
Summer should be a grand time in Minnesota, with parades, flag waving and other festivities in the offing, but unless the Legislature and governor agree on a budget compromise, government shutdown will put a damper on those festivities. It'll be July 4 without the sparkle and for many families it will be a real hardship.
The shutdown, if it does arrive, will negatively impact business through the continuation of economic uncertainty, create more spending reluctance on the part of consumers and deprive the state coffers of needed tax dollars. That is why we, as representatives of several greater Minnesota Chambers of Commerce, are calling on the Legislature to work with the governor in finding a resolution to the budget impasse.
If the Legislature and the governor maintain their current stalemate until late summer or fall, we will all be hurting. The same is true if they resort to cuts to the Local Government Aid program to fix the state's budget problems. Greater Minnesota cities have had to endure 25 percent in cuts since 2003 and have responded accordingly. Additional cuts in LGA will lead to an increase in property taxes on businesses and homeowners and more cuts in services on the local level. Constituents in greater Minnesota should not be the source of increased revenue as they so often have been in the past. With the deficit facing the state, new revenue will be needed, so instead of pretending that there will be no tax increases, the question should be, "Which taxes will rise and who will they affect?"
What we, as members of rural chambers know, is that the state's reliance on property taxes has hurt businesses, and those located in greater Minnesota have been hit the hardest, which is why we don't want to see history repeating itself.
In the years between 2002 and 2010, property taxes on businesses located in the metro area have risen by 44 percent, which is bad enough, but they have risen by an astounding 70 percent in greater Minnesota. That is untenable, but if the Legislature is successful in making more cuts to the Local Government Aid program, those costs are likely to soar again.
The Legislature had all session to show that a "cuts only" solution would work, but some of those cuts - like those to the LGA program - would lead to tax increases and some - like those affecting high education or health care - would sap the economy of the state in the long run.
Income tax increases alone are also not the answer, but the governor seems to have received that message. We hope that the Legislature will also start getting the message that the public is looking for a compromise that includes both revenue increases as well as cuts and avoids a shutdown of state government services.
With the regular session already over and the July 1 deadline looming, it is time for the Legislature and the governor to sit down together and work out a true compromise on a budget that makes Minnesota - not one or the other of the political parties - the winner.
By Lori Paris, president of the Bemidji Area Chamber of Commerce and Randy Kehr, executive director, Albert Lea-Freeborn County Chamber of Commerce