DFLers in the Minnesota Senate unveiled a $50 million package of tax incentives Monday aimed at growing jobs. The package of incentives is the latest job-creating plan to emerge early in the 2010 legislative session.
The $50 million proposal would provide tax credits for investments in startup companies, energy efficient buildings and the rehabilitation of historic structures.
Sen. James Metzen, DFL-South St. Paul, says 100 labor and business groups are backing the measure, which he says will benefit thousands of construction workers who are currently unemployed.
"This is not just labor. It's not just business. It's not just DFL. It's not just Republican. This is a jobs bill," said Metzen. "No matter what party you're with, or if you're with business or labor or whatever, this has got to get done."
Metzen says the tax credits will complement another job-creating measure that's moving quickly this session. That bill, a $1 billion borrowing proposal for public constriction projects, is set for a Senate vote this week.
A key provision in Metzen's bill is the establishment of an Angel Investor Tax Credit. The incentive is designed to get private seed money into qualified emerging industries, such as bioscience and renewable energy.
“No matter what party you're with ... this has got to get done.”Sen. Jim Metzen, DFL-South St. Paul
State Sen. Kathy Saltzman, DFL-Woodbury, says Minnesota is losing some of those companies to neighboring states that already offer the credit.
"To see these areas emerge, and then not have the capital to advance them, is tragic. And because of that, we see other states who are investing in these companies, coming into Minnesota and plucking out our best ideas," said Saltzman.
The legislation also provides a tax incentive for the rehabilitation of certified historic buildings. Bonnie McDonald of the Preservation Alliance of Minnesota estimates that provision alone would generate about 1,500 jobs a year.
McDonald says dozens of historic rehabilitation projects in Minnesota are in desperate need of a financial boost, including the Palace Hotel in Crookston.
"This would have provided about $2 million for them. Without the state tax credit, that project is not going forward," said McDonald. "It was listed on our 10 most endangered historic places list, and we will probably lose that national registered property in the state."
At $50 million, the Senate proposal is significantly larger than a similar House bill which comes with a $10 million pricetag.
Legislators have made jobs a top priority this session, but it's not clear what long-term difference their efforts might have on a still sluggish economy. State economist Tom Stinson says he doesn't see improvement anytime soon on the employment front.
"The best guesses are that we're going to see the national unemployment rate go back up to more than 10 percent again, and to stay at the 10 percent level more or less through the end of this year," said Stinson.
Gov. Tim Pawlenty is expected to announce his own ideas for economic growth. His spokesman says the Republican governor wants to focus on cutting taxes for job creators.
Republicans in the Minnesota House have a similar goal in mind. They tried unsuccessfully to force a floor vote on a proposal to phase out the corporate income tax over 10 years. Rep. Mark Buesgens, R-Jordan, says taxes and mandates have hurt businesses.
"We have a chance today to step forward and say we value our businesses in this state, want you to stay in this state. We need you to grow, so that our people can get back to work and take care of their families," said Buesgens.
House DFL Majority Leader Tony Sertich argued the proposed GOP tax cut would only worsen the state's deep financial problems.