After the election - Finance & Commerce

An expanded sales tax break for data centers ? such as the $26 million, 220,000-square-foot data center that UnitedHealth Group completed nearly a year ago in Chaska ? is among the proposals that could get new life in a DFL-controlled state Legislature. (STAFF PHOTO: BILL KLOTZ)

An angel tax credit extension, a sales tax break on business equipment purchases and expanded tax breaks for new data centers are among the business-friendly proposals that might get new life in a DFL-controlled Legislature next year.

A more Minnesota-centric health insurance exchange and overhaul of the work force development programs also could be in the works.

Those are but some of the possibilities after the DFL won back control of the Minnesota House and Senate in Tuesday?s election.

House Democrats won a 73-61 majority, and fellow DFLers in the Senate will control the chamber by a 39-28 margin. When the new Legislature convenes in early January, it will be the first time since 1990 that the DFL controlled both the legislative and executive branches of state government.

Both Gov. Mark Dayton?s spokeswoman and Katie Clark, commissioner of the state Department of Employment and Economic Development, said it is too soon to tell which job-creation measures will be a priority.

Clark, whom Dayton promoted to the commissioner spot last month, plans to tour the state in coming weeks to meet with business owners and local government leaders, and figure out what needs to be done to ensure that DEED?s economic development and work force development programs are meeting 21st century needs. She expects to have proposals for the new Legislature before it convenes.

Some possibilities include a host of measures that Dayton supported, but still vetoed earlier this year because the Republican-controlled Legislature packaged them into a property tax reform proposal. The measures that Dayton liked included:

• Expanding the state?s sales tax break for new data center projects to include facilities that are at least 25,000 square feet versus the present 30,000-square-foot minimum;
• Increased angel investment tax credit funding;
• A research and development credit increase;
• An upfront sales tax exemption on capital equipment for small businesses with 50 or fewer full-time employees;
• A one-time appropriation of $7 million for the Minnesota Investment Fund that DEED uses to support multimillion-dollar commercial construction projects that create jobs.

State Rep. Tim Mahoney, DFL-St. Paul, a candidate to chair the Minnesota House?s jobs committee next year, said the proposals were all good things. But none of them will happen if there is not funding.

Mahoney said he won?t be interested in chairing a jobs committee if there is no money available for it to promote economic development.

?Unless there?s a commitment to pour $50 million to $60 million into economic development, why have a jobs committee?? Mahoney said.

Mahoney thinks the new Legislature?s priority will be figuring out how to make good on Dayton?s promise from 2010 to raise taxes on the wealthy to help alleviate the state?s budget woes, whether it involves outright increases or closing of loopholes.

State Sen. Thomas Bakk, DFL-Cook, the presumptive majority leader for the new Senate, said Wednesday that he was interested in simplifying the tax code, which would likely result in revenue-generating loophole closings.

?I really want to engage the business community in a tax reform discussion,? said Bakk, who spoke during a news conference with Dayton and state Rep. Paul Thissen, DFL-Minneapolis, who is expected to take over as House speaker.

Bill Blazar, senior vice president of public affairs at the Minnesota Chamber of Commerce, acknowledged that there will be ?challenges? when it comes to promoting business friendly policies in a DFL-controlled state government. But he also sees opportunities because Democrats want to create jobs, too.

?Everybody campaigned on creating more private sector jobs. So let?s get about the business of working on policies that will create more private sector jobs,? Blazar said.

The chamber even more or less agreed with the DFL when it came to a Minnesota-based health insurance exchange that would allow owners and individuals to shop for health insurance online in about the same way they shop for airplane tickets.

Dayton will likely need legislative approval for the exchange by April 2013 if the state is to stay on the right side of the U.S. Department of Health and Human Services. Minnesota needed to avoid HHS forcing a one-size-fits-all exchange on the state in 2014, said Kate Johansen, manager of health and transportation policy at the Minnesota Chamber of Commerce.

Legislative approval of the exchange is now assured. Johansen suspects the chamber efforts in early 2013 will focus on assuring that the exchange is easy to use for business owners and does not cost them more money.

Better work force training is another area where the business community appears to agree with DFLers.

For his part, Mahoney would like more of a concentration on quality of life and education issues, including streamlining a work force training system that he considers too unwieldy.

State Sen. James Metzen, DFL-South St. Paul, a candidate to take over the Senate jobs committee, also would like to see reforms in work force development.

And Metzen is interested in some ?outside the box? ideas, including tax breaks for job-creating companies.

Metzen suggested taking the state?s Job Opportunity Building Zone (JOBZ) initiative ? which provides local and state tax exemptions to companies in targeted areas of Greater Minnesota ? and temporarily expanding it statewide.

RELATED:?Voters approve $63M worth of school projects

Paul Demko, a staff writer for Politics in Minnesota and Capitol Report, sister publications of Finance & Commerce, contributed to this story.

This entry was posted on Wednesday, November 7th, 2012 at 6:38 pm and is filed under Business & Economy, Economic Development, Top Story. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.

Source: http://finance-commerce.com/2012/11/after-the-election-businesses-may-still-get-some-love/

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