Gov. Mark Dayton would like an additional $30 million in the next biennium to help businesses move to Minnesota or expand within the state.
The proposal, offered as HF3, sponsored by Rep. Rep. Shannon Savick (DFL-Wells), was held over Tuesday by the House Jobs and Economic Development Finance and Policy Committee for possible omnibus bill inclusion. A companion, SF54, sponsored by Sen. Matt Schmit (DFL-Red Wing), awaits action by the Senate Finance Committee.
As the commissioner of the Department of Employment and Economic Development, Katie Clark Sieben’s role includes finding ways to entice businesses to the state.
There are lots of things companies look for when thinking about relocation or starting up, such as specific building types, specific cities, transportation networks and a skilled workforce, she told the committee.
Established in 1985, the Minnesota Investment Fund also can provide an assist by offering loans to businesses that commit to increasing jobs in the state.
“The recent $3 million appropriation by the Legislature in the 2011 session and all current MIF loan repayments are now already committed to projects, making it impossible for Minnesota to compete for major job expansion when incentives are the final determination of the location decision,” Clark Sieben said.
Through the fund, the state distributes money to units of local government, such as cities or counties, which then loan the money to businesses as incentives to expand existing operations or relocate operations from another state. If hiring and wage goals are met, the loans can become forgivable.
“This is a proven tool in our toolbox, and one that we know that will have great success in years to come with attracting and retaining companies,” Clark Sieben said.
Over the past eight years, the fund has provided $7 million in loans to 53 projects. That has resulted in excess of $580 million in private investment while helping create in excess of 3,000 jobs. Using the ratio that every $1 loaned returns $33; the governor’s plan would attract an estimated $800 million in private investment and create 10,000 jobs.
Some Republicans said other costs of doing business in the state also need to be addressed, such as the governor’s proposed tax plan that includes taxing business-to-business services and a higher tax rate on high-income earners.
“We just need to reduce the cost of doing business and that’s going to grow jobs in our state,” said Rep. Andrea Kieffer (R-Woodbury).