The recent economic news nationally and in Minnesota has shown positive signs for our economy, but there are still nearly 200,000 Minnesotans out of work. It’s clear Minnesota faces a persistent jobs deficit that demands our attention and action. While there are signs our economy is headed in the right direction, now is not the time to sit on our hands.

We need to step up our game in seeking solutions that create jobs by strengthen strengthening the middle class and support the many bold Minnesotans who are striving to embark on new careers. Rising property taxes on middle class homeowners and small businesses has made it harder. So have unfair policies that protect wealthy special interests at the expense of the majority if Minnesotans.

The recipe for Minnesota’s success and prosperity is to build a broad and prosperous middle class, where everyone plays by the same rules and has a fair opportunity to succeed. That’s how we will rebuild our economy and create good paying jobs and new careers for hardworking Minnesotans.”

House Minority Leader Rep. Paul Thissen says the state’s new approach to property taxes won’t provide relief.

“The bottom line: Republicans eliminated a program that provides $538 million each biennium in property tax relief and replaced it with a program that provides $0 in property tax relief,” Thissen wrote in a recent e-mail to constituents.

Thissen’s claim is correct.

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The fact is that this is a beg-borrow-and-steal budget. It borrows and steals from Minnesota’s future and begs the people of our state to look the other way as once again you simply kick the can down the road. We can and must do better. Minnesota’s prosperity and future depend on it.

Governor Should Build Institutions and Policies that Last

His book, Overburden, is a good read.

Some additional commentary from Mn Publius

Q. What should the state government do to solve our transportation challenges? Please address toll lanes, light rail, bus rapid transit and increased construction to add more lanes.

Thissen:There is wide agreement that Minnesota must continue to invest in its transportation infrastructure. The Legislature made an important start when it passed the transportation bill last spring. The gas tax increase is constitutionally dedicated to build roads and bridges and adding more capacity is important. But we must also expand transit options including light rail and bus rapid transit. I have supported toll lanes.

Q. Would you support the educational reform measures expected to be proposed by the K-12 Education Finance Division in the House in 2009?

Thissen: We need to look hard at how we fund our schools. The underlying premise of the House K-12 “Second Minnesota Miracle” – a shift from reliance on local property taxes to greater reliance on state resources – is worthwhile, but I will not support the proposal until I see additional details. Any reform must be tied to clear standards for measuring the success of our investments in education.

Q. Health care costs continue to rise and more and more people are being squeezed out of the system or finding that they cannot afford insurance. How can the state address this growing problem?

Thissen:The health care reform package that the Star Tribune labeled the “prize” of the last session takes important steps in that direction, but there is more to do to reduce costs and increase quality. We need to change how we pay for health care – we shouldn’t pay doctors to do procedures; we should pay them to care for the patient. And we should adopt an affordability standard which sets an expectation that no Minnesotan should pay more than a reasonable percentage of his or her income on health care.

Q. Protection of the environment sounds good on an election platform, but tell the voters what you would specifically propose for your district and the state to accomplish this.

Thissen: I have a record of votes for cleaner water, cleaner air and cleaner energy. For instance, I chief authored legislation to reduce phosphorus in our lakes and streams. I was an early advocate for renewable energy standards. Our top priority should be cleaning up and maintaining our waters – perhaps our most valuable resource – through reduction in pollution sources, investment in municipal treatment plants and lakeside land management.

Q. Should the state government play a role in encouraging investment in alternative-energy businesses that would bring so-called “green collar” jobs to Minnesota? If so, how?

Thissen: The state government does have a role to play in building a green economy, primarily through investment in basic research and development on our university campuses. My primary concern is that we focus on areas where we have a clear and natural strength, rather than chasing the latest fad.

Q. In what ways, if any, should the Legislature/state assist in jump-starting the state’s economy?

Thissen: State government cannot turn a sour economy around by itself. But it can take advantage of opportunities where job creation and proper public investment intersect. For instance, in many communities across the state, housing is substandard. Our state should be investing and getting people to work to transform those communities with high quality housing.

The key to economic success in Greater Minnesota are manufacturing, processing and other businesses which grow by adapting to the needs of their customers in a global, competitive economy.  How do we help those entrepreneurs?

One difficult challenge for our rural businesses, particularly manufacturing and processing businesses, is the lack of resources to make the jump from a thriving small local business into a thriving medium-sized regional business that brings more jobs and more dollars into the community.  Instead, successful local businesses are bought out – or driven out of business – by larger companies from outside the region.   To avoid that, we must find ways to attract patient investment capital to rural Minnesota businesses. 

Tax incentives for “angel investors” are one way to attract targeted investment in rural Minnesota.  But the tax incentives cannot stand alone because such an approach ignores another critical economic dynamic that hurts small-town Minnesota – the exporting of homegrown wealth to other regions and states.  Instead, a portion of the tax credits should be targeted to regional investment pools governed and funded by local residents for investment in locally-owned businesses.

When out-of-town venture capital funds invest in a small-town businesses, the rewards of business success flow into the investors’ pockets and out of the community.  This exacerbates the torrent of wealth that already is pouring out of our rural economies.  According to a study on food and farming in southeast Minnesota by the Crossroads Resource Center, $800 million is annually drained from that region as families import farm inputs and food while exporting commodities. 

Instead, we must envision a future where groups of neighbors along with local businesspeople and banks invest their wealth in successful local businesses that have the potential to jump to the next stage.  Imagine a locally focused mutual fund, governed by local residents, funded by local residents and invested in local businesses.  Forward-looking leaders in southeast Minnesota are germinating the idea in that region.

The reality is that rural Minnesota has immense natural resources and homegrown wealth.  But it is dispersed instead of concentrated and illiquid instead of readily accessible.  The real key to sustainable rural communities is to create a mechanism to tap into that existing wealth and combine it in investment pools large enough to sustain local business expansions with local dollars.

To achieve that vision, two obstacles must be overcome.  First, there are transactional costs associated with pooling resources of small local investors.  Second, small businesses require more patient capital – a willingness to wait longer to see a return on investment.  Both factors likely mean a lower overall immediate return on investment than comparable investment opportunities.  An investment tax credit targeted at locally-controlled regional investment pools would even the playing field and leverage the wealth of Minnesotans to create sustainable, prosperous communities across the state.

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H.F. 361 (2007-08)

“Rising health care costs play a key role in the economic insecurity Minnesota families are feeling,” said State Rep. Paul Thissen, chair of the House Health and Human Services Policy Committee. “With health care becoming more and more unaffordable, many are forced to make difficult choices when it comes to providing for their families.