The Free Press, Mankato, MN


August 3, 2013

State incentives need more transparency

WHY IT MATTERS: Incentives use tax money to lure corporations who may be turned off by other negatives


Peter Nelson, director of public policy for The American Experiment, opines that the new tax hike on high income earners may have pushed the Twin Cities out of consideration. He pointed to Colorado offering tax advantages to Ardent Mills even before the 2013 tax hike.

These are just one of many considerations for businesses and they all have a fiduciary responsibility to pursue the best deal for their owners or shareholders.

For any state, mitigating negative effects of a high tax rate — or unskilled labor force or any other reasons companies can check you off the consideration list — means offering some other advantages to remain in consideration. It would appear Dayton and the DFL have chosen to woo with money that seems to be taking from Peter to pay Paul.

DFL Rep. Ryan Winkler to PIM: “I don’t like the idea of taxing people in order to provide incentives to a corporation because people hear from lobbyists who say these companies are going to do good things.”

Winkler said he at least would like a stronger provision requiring companies that receive incentives meet a certain labor standard and specific wage.

But, rather than “buying jobs,” the best incentive for a business is to make working here the least restrictive, provide the best possible workforce, a strong infrastructure and supply network, and offering sustainable quality of life for themselves and their employees.

If you make doing business here too expensive, if hurdles for permitting are too long or too high, if taxes and regulations are too unpredictable, then those states that don’t have those restrictions will be looked on more favorably.

To counter that, our incentives become expensive and more risky. So yes, governor, we would like to know what’s on the table and to whom. After all, it's our money.

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