Keeping taxes in line and training a 21st century workforce need to be done to keep Minnesota competitive, says Minnesota Chamber President David Olson.
"We know .... Minnesota's competitive advantage has never been taxes, or the weather for that matter," Olson said Thursday. "But we've always been willing and able to pay a little more for our quality of life, which is a good thing."
Olson was keynote speaker to the Bemidji Area Chamber of Commerce's Awards of Excellence luncheon at the Hampton Inn & Suites.
"But our worry at the State Chamber right now is that a lot of folks in decision-making positions inside a lot of these companies also realize that there's great quality of life in other places outside of Minnesota," Olson said.
He listed off:
- Northwest Airlines is now Delta and headquartered in Atlanta instead of the Twin Cities.
- The St. Paul Companies is now Travelers and headquartered in New York City.
- 3M, for all intents and purposes, has not added a new job in Minnesota since moving part of its facilities to Austin, Texas.
- Medtronic has made it clear that it will not do any manufacturing in Minnesota, and many research and development jobs are now in Singapore and Ireland.
- Two weeks ago, Medtronic announced its new diabetes facility will be located in Texas, and last week cut its Minnesota employment by 600 jobs.
- Honeywell's headquarters are now in Maryland and there is no senior management in Minnesota.
"What we're seeing on the smaller company front is a lot of people that started their company in Minnesota, made a success, are now selling their company to somebody who doesn't live here or who doesn't have a connection to Minnesota," Olson said. "And then they move off to Naples (Fla.) or somewhere a little warmer, and they take their taxes, and their charitable giving and their volunteerism with them."
The loss of big and small companies "are huge drains on our economy," said Olson, with the Minnesota Chamber representing 2,400 Minnesota companies, 130 chambers of commerce and 65 business trade associations.
"I'm worried about some things, and I'm not Chicken Little and I don't think the sky is falling," he said. "Our biggest advantage ... about a Minnesota location is the workforce, and the quality of the people that we have working here."
That fact has set Minnesota companies apart from the rest of the country for years, he said. "But we're a little worried about that, as well."
Minnesota needs to retain its workforce advantage, he said.
"We have the largest high school graduating class in the state of Minnesota right now for the next 20 years," said Olson, State Chamber president since 1991. "When this economy turns around, which hopefully will be sooner than later, we're going to need all of these kids to be able to work and hold a job."
There cause for concern that those high school graduates are prepared for the 21st century workforce, he said. "We think we can do some of this without spending more money or going to the Legislature. We ought to think about how we recruit and train teachers."
High quality teachers are needed to prepare students, Olson said.
"There's nothing more important that who is leading a particular class and producing better teachers is a function of how people are accepted into our schools of education, and then tuning the curriculum to meet the needs today's learners," he said.
The Minnesota Chamber had lobbied the 2009 Legislature for alternative licensure for teachers, a measure that failed to gain traction. The Chamber also sought this year to keep the Graduation-Required Assessment for Diploma math requirement for high school students to receive a diploma, but lawmakers waived the provision for five years.
Olson to the Chamber luncheon that there were five good things going on in Minnesota.
Airborne, a medicine company, is moving its headquarters from Florida to Minneapolis, he said. Faribault has lured a Finnish wind turbine/generator manufacturing plant which had been looking at Iowa. Essar Steel on the Iron Range will open its operation, triggering millions of dollars in construction and millions in payroll.
Michael's Foods was looking at a plant in Wisconsin, and instead will locate in Chaska, Minn., he said. Swift meatpackers in Worthington, Minn., will double the size of its plant in meat processing, with help for additional housing given the plant.
"There are some good things going on, we just want to make sure that we pay attention to those things," Olson said.
In an interview, Olson said The Minnesota Chamber supported Republican Gov. Tim Pawlenty's insistence on no new taxes, especially the Senate DFL's push for a new fourth tax bracket and increasing taxes on all brackets.
"We think, again, with the economy the way it is today, that now is not the time to raise taxes," he said. "We were obviously most concerned about a fourth tier or increasing all three plus a new tier on the income tax, because a lot of companies flow their corporate income tax through the personal income tax. It would have raised taxes on thousands of small companies, and the timing for that is just not good."
And even the governor "probably didn't think it was the best policy option," Olson said of Pawlenty's offer to bond $1 billion for ongoing spending, repaying it with tobacco settlement funds. "But I'm sure he also thought that's a better policy option than raising taxes."
As for the session, Olson said that "I think we thought we survived the session. Obviously we didn't think it was time to increase the cost of doing business but we had some things we were disappointed with.
"We thought Minnesota ought to be able to talk about nuclear power for baseload electricity," he said. The Senate passed, but the House didn't, legislation to lift a ban on new nuclear energy plants in Minnesota.
That issue will be on the Chamber's agenda next session, Olson said, adding that Chamber officials will tour the state with 35 stops next month to garner input on a 2010 legislative agenda.