Minnesota’s economic development strategies reviewed

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Minnesota was once a leader in job subsidy programs, but one organization now considers the state to be in the middle of the pack.

That was one message Greg LeRoy shared Thursday with the House Select Committee on Living Wage Jobs, which hopes, in part, to gauge the effectiveness of job programs created by the state.

LeRoy, executive director of Good Jobs First, a Washington D.C.-based nonpartisan group that looks at business incentives across the country, said that when it comes to incentives, tax provisions often rank behind things like an educated workforce, infrastructure and closeness to suppliers. He also noted incentives, such as tax-increment financing, have created more battles between suburbs than being of benefit to states.

As an example of perceived abuse, Dane Smith, president of St. Paul-based Growth and Justice, noted TIF districts have been created for big-box retailers. According to the nonpartisan House Research Department, “Before creating a TIF district or subdistrict, a local government must find that in its opinion the subsidized development would not have happened but for the use of TIF.”

Among LeRoy’s suggestions is that Minnesota leaders focus inward when looking to improve, noting that spending money to try and attract jobs from other states may not be worth the time and effort.

“You need to sharpen the tools you have to get better bang for the buck,” he said.

Smith also urged broad training for workers, especially targeted incentives to populations who struggle to find jobs.

Educational reform would help better prepare Minnesotans to succeed in the state workforce, said Rep. Andrea Kieffer (R-Woodbury).

Rep. Ryan Winkler (DFL-Golden Valley), the committee chair, said the group would meet again during the interim with a goal of providing recommendations to the 2014 Legislature.