Paul Thissen: Innovation in Action

Somali Community, St. Cloud

Keeping Local Businesses Local

Minnesota’s looming retirement boom will have a great impact on small business ownership throughout the state. As business owners prepare for retirement, they will seek buyers for their businesses. The Hiawatha Fund, a nonprofit investment fund in Southeast Minnesota, is looking to identify upcoming ownership transitions for small businesses and farms and work to keep those businesses locally owned and managed.

In my community, Plainview – a town of 3,000 near Rochester – I learned of a small business owner who was ready to retire and put his specialty industrial services company up for sale.

Two prospective buyers approached the owners, but because the buyers were outside Minnesota, the company’s work in Plainview would eventually be phased out. Although a small business, the annual $525,000 payroll was not insignificant to the 12 employees and their families, or our community.

In addition to the loss of jobs, the outside sale of the business would put two buildings on the market, and profits would leave Plainview.

Through the Hiawatha Fund, we asked the owners if they would consider a third sale option structured to maintain local control. The owners agreed, and since then a transition plan outline has been presented.

If the business would have been sold to outside owners, the current owners would no longer have a stake in the company. Proceeds from the sale of the business would be taxable and they would need to find a new investment to reinvest the proceeds.

An outside sale would mean an increase in unemployment in Plainview, and a promising young manager who worked for the company would likely be required to move, further depleting the pool of leaders in our community.

However, a sale to local investors would allow the current owners to continue as members of the board of directors, providing new owners with their valuable knowledge, and they could hold company stock as a retirement asset, gradually selling as needed over time and deferring taxes.

Local ownership also would allow the current employees to keep valuable jobs, the buildings would stay occupied, and profits would stay local. Equally important to Plainview, the talent and local commitment of the existing owners and staff would stay in the community.

Identifying business transitions is an important role of regional development groups. Starting this process well before a sale allows a broader range of tools to be used, and structuring the sale in a series of steps or phases over a period of several years will make the transition more manageable.

By maintaining local ownership, the profits are reinvested in the community, business owners enrich the community leadership pool, and decisions are made with more sensitivity to regional realities.

Minnesota’s Budget Deficit: Balancing Priorities and Minnesota’s Values

Minnesota is faced with one of the greatest budget challenges in decades. The $5 billion budget deficit is driven by the rapid collapse of the economy and a high rate of job loss in Minnesota.

Just like private corporations and small businesses, we will be forced to make substantial cuts.  But we must do so with a clear vision of our priorities and our shared values. I believe that means balancing the immediate needs of Minnesotans who have lost jobs and face economic insecurity along with the need to build institutions and polices that will help us do a better job of preparing for future economic storms.  We need to build an economy that is not solely about productivity, but also about reliability and security for Minnesota families.

Below I include some ideas for how I would prioritize the budget (in the context of budget cuts) in the upcoming session. But we need the ideas of all Minnesotans across the state to pull us through this economic crisis. Please share your thoughts on our Idea Board.

Invest in Jobs that Will Serve the Common Good

State government cannot turn a sour economy around by itself. But it can prioritize opportunities where job creation and proper public investment intersect. For instance, in many communities, housing is substandard or unaffordable. Our state should invest to transform those communities with high quality housing. We also know buildings built in the last century waste energy and water because they are inefficient. We can make it a priority to invest in updating our buildings so they are efficient for the 21st century. Good jobs now are good for all of us in the future.

Reform Health Care Programs to Get Relief to People Now

As people lose jobs, families lose access to health care.  Yet, the state imposes rules that prevent people from quickly accessing health care benefits for which they are eligible.   One area the state has a budget surplus is in the Health Care Access Fund, a pool of money to make sure Minnesotans have access to affordable health care.  We should use that money to speed up access to benefits for those who have lost their jobs in the economic downturn.  Not only would that provide needed relief to thousands of Minnesota families, but it would allow us to learn how to administer those programs more efficiently in the long-term.

Emphasize Retraining So We Emerge with a Smarter, More Competitive Workforce

As workers lose their jobs or move into part time positions, the State should work in partnership with private businesses to increase the number of non-traditional, older students who earn college degrees.  We should approve a tax credit to employers who are willing to cover the costs of college tuition and educational fees for newly part-time or temporarily furloughed employees who return to school.

Support Service and Minnesota’s Non-Profit Sector

Minnesota has been well-served by its vibrant community of non-profits and a high rate of volunteerism.  Community organizations are among our best innovators in delivering social services.  We could reprioritize existing money to create a Community Investment Fund; a corollary to the venture capital funds that provide support to for-profit entrepreneurs.  A Community Investment Fund would make long-term, results-oriented and stable investments in effective non-profits to allow their ideas to be brought to scale.  And the fund would leverage additional private resources and tap into the federal Serve America Act money that is likely to be a priority for the incoming Obama administration.

These ideas are just scratching the surface of new and innovative ways to approach the budget deficit. Over the coming months, I will share more of our work in the legislature. And I hope you will join us by sharing your ideas and comments.

Austin Daily Herald Speaks with Rep. Thissen During School Visit

STUDENTS LEARN VALUE OF CITIZENSHIP

Lee Bonorden, Austin Daily Herald, Dec. 18, 2008

Superintendent Joseph E. Brown, Sr. wants to graduate “citizen scholars” from the Grand Meadow Independent School District, young men and women who know the value of citizenship and public service.

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News 12 Previews Equity and Opportunity Tax Credit Legislation

LEGISLATIVE PROPOSAL WOULD HELP ECONOMICALLY DISADVANTAGED STUDENTS

Erick Lind, News 12, December 11, 2008

Many school districts are facing financial problems when it comes to state funding. There are students that are having problems themselves. Currently over 150-thousand children in the state live in poverty. News 12’s Erick Lind is in the studio to take a look at a piece of legislation that could help those students with a better education.

Minnesota is looking for a way to have citizens help economically disadvantaged students have a better opportunity in the classroom. District 63A Representative Paul Thissen is authoring the Equity and Opportunity in Education Tax Credit legislation. He led a forum today for the Coalition for Kids at the Kaiserhoff in New Ulm. Thissen is supporting a bill that would give tax credit for individuals and companies. Representative Thissen says, “The really great thing about this, is that there is an investment of public dollars, but it leverages more private dollars, so we actually end up with more money going toward education.”

Public schools would benefit through educational programs, while private schools would be able to use funding for tuition. Whether private or public school, some in attendance see the potential tax credit incentive as an investment in education. New Ulm Cathedral Athletic Director John Vetter says, “This program would address needs of kids in both schools. I really see it as something that would be great for young people in the state of Minnesota.”

The Coalition for Kids is proposing a 10 million dollar cap for contributions annually that would be allowed to take advantage of an 80 percent tax credit. That is considerably higher than the nearly 8 percent it is right now. In the plan, individuals would be allowed to donate a maximum of 10-thousand dollars, 20-thousand if filing jointly, and corporations can make 100-thousand dollar donations. If the bill goes through in Minnesota it may give a lot of students a chance they never had.Erick Lind, News 12.