St. Paul, Minnesota — Tonight the Minnesota House of Representatives passed HF 729, the Omnibus Jobs, Commerce, and Housing Finance Bill on a 75-57 vote. The bill contains important provisions initially authored by Reps. John Ward (DFL – Baxter) and Joe Radinovich (DFL – Crosby).
The bill includes a substantial tax cut for Minnesota employers through a reduction in the rate that employers pay on unemployment insurance. Rep. Radinovich was the chief author of this provision. This reduction will save businesses almost $350 million in the next two years and the average Minnesota employer will save $150 per employee.
“This is a responsible, targeted tax cut that will provide businesses with more money that they can then use to hire new workers, expand their business, and grow our economy,” said Rep. Radinovich. “Rather than leaving money sitting in the Unemployment Insurance Trust Fund in Washington DC, this puts it in back in the pockets of our businesses.”
Minnesota’s unemployment insurance (UI) tax rates are determined by the balance in the UI Trust Fund. The Trust Fund has recovered from the economic downturn and is projected to have sufficient reserves — well within the solvency levels recommended by the federal government — to meet future needs.
The proposal also contains $750,000 in grants for Enterprise Minnesota — legislation chief authored by Rep. Ward. The grant would go to the Growth Acceleration Program, matching grant that enables small manufacturing companies to access business improvement services.
Since its inception in 2008 GAP has helped more than 245 Minnesota manufacturers create or retain 1,700 jobs and realize a $15 return for every $1 spent by GAP. Two local companies have benefited from this program: Stern Companies, Inc. in Baxter and Pequot Tool in Pequot Lakes.
Manufacturing represents one in seven jobs in Minnesota. Each manufacturing job supports another 1.3 jobs elsewhere in the economy or 800,000 jobs in the state, a total of 29 percent of the workforce.
“This in an excellent program and I’m pleased it was included in the jobs bill,” said Rep. Ward. “We need to move forward with this proven program. It has already helped businesses near us and I’m hopeful it will continue to bring a boost to manufacturing in our area.”
One of the largest single investments proposed is $20 million to the Minnesota Investment Fund (MIF) which helps companies bring quality jobs to the state delivering funds to Minnesota cities, which can then offer incentives for businesses to come to their area. It also brings $33 in private investment for every $1 it loans out.
Another significant investment will be over $18 million for a job creation fund. These dollars would be allocated to the Department of Employment and Economic Development (DEED) which would then use the fund as a tool to help businesses make capital investments and create jobs in Minnesota.
Other investments include $1.5 million for the Minnesota Trade office to help create business relationships that strengthen Minnesota’s economic output and $5 million for a FastTRAC program that works to provide local employers with the skilled workers they need to grow.
“Growing good-paying middle-class jobs and strengthening Minnesota’s economy is a top priority for our state’s future,” said Rep. Radinovich. “Our jobs package reverses the trend over the last ten years to shortchange economic development and job creation efforts in Minnesota and makes bold, necessary investments that will move our state forward.”
Among the Commerce provisions in the bill is a $10.6 million increase in funding for the Explore Minnesota Tourism (EMT) advertising campaign, which was chief authored by Rep. Ward. The increase is paid for through lower spending for the Commerce Department.
Tourism is an $11.9 billion industry in Minnesota, supporting 240,000 leisure and hospitality jobs, which represents 11 percent of private-sector employment. In addition, tourism generates nearly $769 million in state sales tax revenues, which is 17 percent of Minnesota’s sales tax revenues. From 2003 to 2011, state sales tax revenue from leisure and hospitality grew 41 percent, while those from all other industries grew just 16 percent.
Today, Minnesota’s tourism office funding level ranks 30th nationally and far below regional competitors like Michigan, Wisconsin, South Dakota and Illinois. Wisconsin Dells has a larger marketing budget, just for itself, than EMT does for all of Minnesota. Two independent consultant groups found that EMT marketing campaigns generate almost $8 in state and local tax revenue for every $1 of public funds spent on the ad campaign.
“In our area, tourism affects nearly everyone directly or indirectly,” said Rep. Ward. “We need to do what we can to help keep our tourism industry growing and prosperous. By investing in Explore Minnesota, we can make Minnesota a priority destination, help our tourism industry create jobs, and generate new tax dollars.”
Reps. Ward and Radinovich encourage constituents to contact them with any questions, comments, concerns, or ideas on any legislative topic. Rep. Ward can be reached by phone at 651-296-4333 or by email at rep.john.ward@house.mn. Rep. Radinovich can be reach by phone at 651-296-2365 or email at rep.joe.radinovich@house.mn.