One size fits all just doesn’t work
The front page headline on today’s Associated Press story says it all: Big issues in dispute as Legislature approaches home stretch.
One of those big issues is taxes. Gov. Tim Walz wants to raise the gas tax by 20 cents per gallon to create a bigger dedicated revenue stream for road and bridges improvements. Republicans argue that there is a big enough surplus and no new taxes are needed.
Almost two weeks ago, Minnesota Chamber of Commerce Director of Communications Jim Pumarlo made his annual pilgrimage to newspapers across the state. Marshall Chamber of Commerce President Brad Gruhot joined Pumarlo for the visit at the Independent office. But he also brought another important guest: Andy Easley, director of human resources and government relations for tru Shrimp.
Right away, Pumarlo went on the attack. “One of the things in the governor’s budget that he talks a lot about is taxing. He puts heavy, heavy tax burdens on business,” Pumarlo said. “He said by doing this, this will help improve services and improve the quality of life for Minnesotans. He kind of talks in a vacuum.”
Pumarlo’s stance on the gas tax aligns with Republicans in the Senate. They call for keeping the rental vehicle tax 100 percent for roads and bridges and increase the amount coming from the vehicle parts tax to 100 percent. The money raised by those taxes would be supplemented with a tiny percentage of money out of the general fund.
Pumarlo continue to argue that increased taxes on business hampers growth. “They don’t stay, they just shift operations,” he said And that is where the importance of Easley’s presence in the meeting came into play. Three months ago, tru Shrimp announced it was making a “shift.” Tru Shrimp changed course and said it was going to build its first commercial shrimp harbor in South Dakota, instead of Luverne in Minnesota.
As explained by tru Shrimp back in January, taxes or any other proposed mandates had nothing to do with tru Shrimp’s sudden decision.
“We did not anticipate the new user permit issues that we had in Luverne,” Easley said. “We weren’t able to resolve those issues in a timely manner. We needed to move. We needed to build that first harbor so we can improve concepts, get the business moving.”
But he said something very important after that.
“But (increased taxes and other mandates) will affect future decisions down the road. Where are you going to put your harbor? Where are you going to hire those 150 employees? Where can you do those things so it will make a difference down the road?”
And it’s not just taxes that Easley and Pumarlo were referring to. There are several mandates which are being proposed on the workplace, such as a family leave proposal that Pumarlo said will create a needless bureaucracy and cost millions. Under the proposal, employers would have to provide paid parental and family leave and 12 weeks of medical leave.
“You look at this new budget, there are some really good ideas. They really are,” Easley said. “But like you (Pumarlo) said, individually they are good, but there are lot of good things I would like to do in my household that I simply can’t afford. I can’t afford everything. And to me, that’s sort of (what I think) when I look at this budget.”
Easley called it “irresponsible” because the budget doesn’t take into account of what is affordable.
“From a tru Shrimp, Ralco standpoint, we are a small business,” he said. “Ralco has been here for awhile and continues to grow and invest and wants to grow. These kinds of taxes prohibit that. If you pay more taxes as a business, you don’t have the money to invest, hire additional people.”
Easley stressed the gas tax increase is especially troublesome. And he said that will really hurt his recruitment process at tru Shrimp. “One of the nice things I’m able to say, southwest Minnesota has a low cost of living. Well, it’s getting harder and harder to say that. So it does impact our ability to attract talent — simply on high taxes,” he said.
And that’s where the battle lines will be drawn. Walz preaches “One Minnesota.” However, that sounds good as a slogan, more difficult to practice it. There are still concerns metro and rural don’t align very well when it comes to policies for the good of all.
“As a border town — Marshall — regarding the tax competitiveness, it’s always scary for us when we are such a highly taxed state,” Gruhot said.
But he explained that while big companies in the Twin Cities may be able to absorb some of the proposed mandates and tax increases, it’s lot harder for smaller businesses in southwest Minnesota. “The workplace mandates are all concerns because a one size fits all for each community isn’t going to work for us,” he said.
And that’s exactly the struggle legislators will face– coming to grips with the reality that one size does not fit all.