Opinion editor’s note: Star Tribune Opinion publishes articles combining national and local Commentary Every day, online and in print. (Click to contribute here.) This commentary is included in a collection of articles submitted in response to the Star Tribune’s June 4 Comment or otherwise applied. solicit submissions Read the full answer to the question “Where does Minnesota go from here?” here.
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Since May, many articles have been written about the outcome of the Minnesota legislature. There is no denying that the bill signed into law will have far-reaching implications for Minnesotans. With one-party rule, Congress passed bill after bill, each with big promises as to what they would do.
The list includes energy mandates, a number of social policies, new business regulations and the launch of a new state-owned paid leave programme. It also includes more than $9 billion in tax increases for Minnesotans.
Democrats have taken victory tours to tout the benefits of the session, and recently pointed to CNBC’s state rankings for business competitiveness.
But CNBC’s rankings make the same mistake Democrats make when considering what being a business-friendly state really means. According to CNBC, they used marketing documents put together by state agencies, and among the least influential considerations in ranking states included cost of living and ease of doing business.
Beyond the cost of living and ease of doing business, what do they think is more important to making the state competitive? Access to renewable energy, voting rights, and abortion rights are all categories that weigh more in these rankings than regulatory and administrative costs.
Whatever the value of these policies, they are not directly tied to what it means to run a business.
A more objective measure like the National Tax Foundation offers an entirely different picture. According to their rigorous analysis, Minnesota has the fifth-highest per capita tax collection and the 39th-worst share of state and local taxes in the income Minnesotans pay. Our country has her fifth worst business tax environment, including corporate tax, personal tax, sales tax, unemployment tax and property tax.
Bottom line: Minnesota is an expensive place to live and an expensive place to do business. Even more surprising is that these rankings are for 2022 and do not include the over $9 billion tax increase Democrats passed in the last Congress. These taxes are a burden to Minnesota families of all income levels, making it difficult for them to thrive in the economy.
The district I represent borders both North and South Dakota, and we see first-hand how these policies affect businesses and families. We have seen many people displaced from their families or expanding their businesses in towns across the border. The grass across the river isn’t green, but the bank account is green. They create more jobs because they can put more money back into the business. Families have more money to spend on priorities such as family travel, increased childcare costs, and time savings for college.
Each new burden placed on businesses, each new charge added to the family’s taxes, makes us more and more tempted to consider relocating. There have been some recent headlines about companies doing just that, but looking only at clever marketing packets and ignoring data that goes against the message misses the real-world impact of the policies passed.
The reality Democrats are ignoring is that Minnesota’s economic data lags behind the rest of the country. So far this decade, Minnesota ranks 35th for economic output growth, 40th for employment growth, 35th for labor force growth, and 42nd for domestic net migration. Instead of addressing growth barriers imposed by the Minnesota government, Democrats are making it harder for the economy to grow and applauding the barriers.
Minnesotans can’t afford a government that takes on so much and says it knows best where their money goes. Market-driven growth has historically been the best way to improve living standards for all. Good companies create well-paid jobs and offer quality benefits and work cultures. Because that’s how they keep workers.
There is a place for government in our economy, but we have reached a point where government makes things harder for our people instead of easier. Republicans are ready to argue for better policies in the state, but if Democrats continue their approach of ignoring information they don’t want to hear, families and businesses will continue to move to other states.
Jordan Rasmusson (R-Fergus Falls) is a Minnesota Senator.
