A Step In The Right Direction PDF Print E-mail
Written by LL   
Monday, 08 March 2010 08:52

Thanks to the internet, I still manage to keep track of goings on back in the old district (back in MN).  When I got my latest online edition of the old hometown newspaper I was very happy to see that Rep. Mike Beard (Shakopee) is still fighting the good fight for small business development.

The House Small Business Caucus announced plans today to spur business growth and improve Minnesota’s economy. Rep. Mike Beard, R-Shakopee, serves on the bipartisan caucus.

The Small Business Caucus is proposing legislation to:

  • Create an angel investor tax credit.
  • Expand the research and development credit.
  • Evaluate the effectiveness of the state grant and loan resources available to Minnesota’s small businesses.
  • Encourage the deposit of state funds into local and community banks.
  • Create a one-stop portal to connect small businesses with existing resources through the state Department of Employment and Economic Development.
  • Streamline Minnesota Pollution Control Agency regulations.
  • Create a fast-track small-business registration process.
  • Create a study comparing the challenge of business start-ups in Minnesota to neighboring states.

The "Angel Investor" credits are a huge deal - especially in the light of the loss of companies like VitalMedix, who left Minnesota for friendlier tax climes last year.  Businesses, business owners and employees have been leaving Minnesota in droves due to the tax climate in Minnesota.

From 2002-2009 Minnesota lost an estimated 54,113 residents to other states, according to the new report, Minnesota’s Out-Migration Compounds State Budget Woes. These out-migrants also take their incomes with them. Between 1995 and 2007, the total amount of income leaving the state was at least $3,698,692,000 on which state and local governments would have collected an estimated $423,317,000 in additional taxes.

When you consider that Minnesota's current budget deficit is just south of $1BILLION, that $423+ thousand is more than just a drop in the bucket.  That is almost HALF of what the current deficit is today! 

Many of those people (and their businesses) are moving to lower tax states like Utah which has been one of the FASTEST GROWING states in recent years!  And while growth has slowed, Utah is still not losing people like Minnesota, New York, New Jersey and California are (to name a few).  With two world class universities, a growing, motivated workforce and a business friendly climate is it any surprise why businesses are moving here?

A real lesson can be learned from the states out-migration data and I am not surprised to see Rep. Beard has recognized that.  Rep. Beard was always looking out for the multitude of small businesses that dot the landscape of his district (Prior Lake and Shakopee).  They are fortunate to have someone like him in St. Paul watching out for their interests.

High tax states need to realize that they are competing with lower tax states like Utah for these businesses and adjust their thinking accordingly.  Gone are the days of "happy to pay for a better finll-in-the-state-name".  States are able to fund the infrastructure necessary to keep their citizens happy and productive without the confiscatory taxes that the high tax states are charging.  Until the "happy to pay for..." mindset changes, these high tax states will continue to bleed employers and employees.  Is that really what we are "happy to pay for"?