Replay-Tom Emmer On Jobs, Budget Plan

Republican candidate for Minnesota Governor Tom Emmer unveiled what his campaign is called “part one” of his budget plan which was about creating a good environment for jobs.

The ironic backdrop to Emmer’s announcement is Permac Industries in Burnsville, Minnesota. Ironic because Permac avoided laying off workers thanks to funding from the federal Recovery and Reinvestment Act, which Tom Emmer has very vocally opposed.

Permac President Darlene Miller was quoted just this past week saying, “The subsidized jobs program has provided us with a wonderful way to identify dedicated and dependable workers.” The Center on Budget and Policy Priorities reports:

Permac Industries has hired five employees through the jobs program, expanding Miller’s business while training candidates for unsubsidized positions. These employees, in turn, are developing the experience needed to increase their financial independence.”

Miller said that Permac employed nearly 50 workers in early 2008. The number plunged to 23 by the end of last year. Today, thanks in part to the subsidized job program, Permac is on the rebound, and now boasts 36 workers. But at today’s news conference, (near the 23-minute mark on our video) Miller denied that federal stimulus funds were used for her workers. She said instead that Permac has benefited from a local Dakota County workforce program (the company hired an employee who was trained by the local program). When asked if federal funds indirectly subsidized her workers through the local workforce program, Miller was interrupted by Emmer, who said curtly, “None of them came from federal stimulus” money.

(Despite promising an interview earlier in the day, Miller was unavailable to speak with TheUptake following the news conference.)

To participate in the live blog for this event continue reading. To view the live blog in a new window Click HerePress release from the Emmer campaign on his plan:

Emmer Budget Plan, Part 1:
Jobs-creation agenda to put Minnesotans back to work

Tax relief and government reform vital to lowering unemployment, strengthening Minnesota’s economy

Tom Emmer, the Republican nominee for governor, today announced the first part of his state budget plan: his agenda for creating jobs and revitalizing Minnesota’s economy.

“On this holiday dedicated to working people, too many Minnesotans are out of work. On this Labor Day, too many Minnesotans are fearful about their jobs,” said Emmer. “We need policies which will make Minnesota once again a place where jobs flourish and where business people want to make investments for future growth.”

At Permac Industries, which manufactures precision parts for customers worldwide in Burnsville, Emmer announced a sweeping plan to lower government obstacles to job growth and to allow Minnesota to improve its competitiveness not only among other states but in the global marketplace.

“Minnesota has an extraordinary history of entrepreneurial innovation and business success. But continued economic success has been hampered by the high costs, regulatory impediments, and indifference of state government,” said Emmer. “Unfortunately state taxes and regulations discourage many businesses from expanding here or starting a new business in the first place.”

“Make no mistake, government cannot create the jobs we need to turn our economy around, but private business people can. State government can either help improve the necessary business climate – as I will do if elected governor – or it can hurt job development, as my opponents’ proposals to maintain the status quo would do.”

Emmer stated that enacting his Jobs Agenda will be his highest priority as governor. “The most important task of the next governor is ensuring that businesses can create jobs for struggling and anxious Minnesotans. We must allow job creators in the private sector to do what they do best.”

“In this weak economy, business owners and their employees are in survival mode. With my Jobs Agenda, I am throwing them a life line,” he said.

Emmer’s job creation plan calls for reducing three major taxes which discourage investment and hiring; expanding tax credits and exemptions which can spur business investment for small businesses, start-up companies, and established technology companies alike; reforming public education for long-term competitiveness; and reforming the state government’s regulatory processes and bureaucracies to lessen the burden on businesses and investors.

The GOP candidate noted that all of the tax relief measures in his plan have received bipartisan support in the legislature and were endorsed by the 21st Century Tax Reform Commission in its 2009 report. Also, small and large companies alike will benefit from two of the three tax cuts in the Emmer Jobs Agenda, ensuring benefits to the broadest range of Minnesota employers, including those which make little or no profits.

In contrast, DFL candidate Mark Dayton’s so-called “Jobs Plan” relies on more unsustainable government spending and ignores the tax and regulatory burdens on Minnesota employers. Tom Horner’s budget plan merely tinkers at the margins of the business climate problem; and he raises sales taxes immediately while only promising some tax relief for some employers later, beginning in 2013.

“My opponents are members of the political class, captives of the status quo, and unwilling to recognize that Minnesota has an even worse problem than the next state government budget deficit – we have a job creation deficit,” said Emmer. “I’m calling for a new direction for Minnesota in my campaign. And my Jobs Agenda and budget plan puts the right priority in place: getting more Minnesotans back to work.”

Emmer will release the remainder of his budget plan in two more announcements within the next two weeks.

Tom Emmer’s Agenda for Job Creation

1. Provide tax relief to encourage job creation and business investment.

A. Provide tax relief to employers by cutting the business tax. Tom Emmer calls for the current rate of the business (corporate franchise) tax of 9.8% to be reduced to 8.8% in 2011, 7.8% in 2012, further phased-in reductions to 3% by 2015, and eventual repeal. This proposal will save Minnesota employers in both greater Minnesota and the metro area an estimated $368 million in FY2012–13. Reducing this tax enjoyed bipartisan support in the last legislature, and is cited by state business leaders as a major impediment to business growth by C-corporations. This phased-in repeal will greatly improve Minnesota’s tax competitiveness among the other states.

B. Provide tax relief to small business to get them hiring again. Tom Emmer will provide a 10% subtraction beginning in 2011 of active pass-through income for S-corporations, partnerships, and LLCs. This will give small business owners critical tax relief estimated at $75 million in FY2012 and $83 million in FY2013, and will give them a greater means to reinvest in their businesses and hire new employees. This is another proposal which enjoyed both Republican and DFL support last session. Tom Emmer wants to increase this subtraction to 20% in later years.

C. Reduce the state general property tax. This tax is onerous to both small businesses and large corporations alike. Tom Emmer will prevent this tax levy from increasing by inflation adjustment and will reduce the levy amount by $100 million in FY2012–13, with further reductions in future biennia. Reducing this tax will provide balanced tax relief to a broad array of businesses, including those which are presently unprofitable.

D. Increase Minnesota employers’ opportunities to grow knowledge and technology jobs by expanding the state Research and Development Tax Credit. Minnesota created the first state R&D credit almost thirty years ago. Today, however, its credit is among the lowest in the United States and puts the state’s companies at a competitive disadvantage. Tom Emmer will expand the R&D credit to regain Minnesota’s competitive footing with other high-tech intensive states.

E. Accelerate the growth of start-up companies and subsequent jobs through expansion of the angel investor tax credit. Minnesota recently enacted legislation to provide a tax credit for investors in early-stage companies. However, Tom Emmer believes that this credit should be expanded to provide more help to early-stage enterprises, many of which are highly mobile technology companies, so they can attract venture capital investments and create new jobs and innovation here in Minnesota.

F. Prevent delays in business reinvestment by making the capital equipment sales tax refund an upfront exemption. Minnesota business owners essentially loan the state their own money by having to pay and then request a refund for sales taxes paid on equipment used in manufacturing, mining, or refining. The refund mechanism delays businesses the ability to reinvest their money in their own businesses. Changing the refund to an outright exemption will free up hundreds of millions of dollars for new investment needed in these capital-intensive industries.

G. Extend the capital equipment exemption to service companies subject to the sales tax. The extension of this exemption to so-called “1987 services” will permit small cleaning, maintenance, security, and other businesses additional capital to make new investments and hire new workers.

2. Reform state regulation.

Tom Emmer believes that the state’s regulatory powers and procedures must be exercised with common sense, consistency, and timeliness. Duplicative rules and onerous regulations create costs to businesses and prevent them from expanding and hiring. He will insist on a fundamental review of state agencies’ processes to ensure that unnecessary or counterproductive regulatory barriers are removed to ensure economic growth.

3. Reform the state’s education systems.

Tom Emmer will demand changes from Minnesota’s K–12 and higher ed systems to improve the quality of our children’s education and the competitiveness of our future workforce. The benefits to Minnesota’s economy from these reforms will not be immediate, but they will be profoundly importance to sustain the state’s long-term global competitiveness. (Tom Emmer’s detailed education reform agenda will be announced separately in the near future.)

4. Reform state government to improve efficiency and lower the cost of the public sector.

The projected budget deficit for the next biennium must be solved without raising taxes on struggling Minnesotans and their employers. But demographic changes will continue to put unsustainable demands on the state budget for many years to come without fundamental changes. Tom Emmer knows that there is waste and inefficiency in the bureaucracies and programs of state and local government. He will demand broad reform inside state government, and lead the effort to reprioritize state spending.

Independence Party candidate for Governor Tom Horner’s campaign issued this statement:

It is good to see that Representative Emmer finally acknowledges the need for business tax reform. As he points out, much of what he now proposes was offered in early 2009 by the 21st Century Tax Reform Commission and is included in the Horner-Mulder Minnesota Works budget. The difference is that Tom Horner has the political honesty and the plan that tells Minnesotans how we will pay for that tax reform.

It is also curious why Rep. Emmer took so long to come around on the need for business tax reform. Unfortunately, the tax reform commission’s recommendations were rejected out of hand by Republicans including Gov. Pawlenty — who appointed the commission — as well as the Republican caucuses, including Rep. Emmer’s GOP House caucus.

Those who have not been briefed on the Horner-Mulder Minnesota Works plan may do so by visiting our website at or by requesting a copy.