As DFL drives final pieces of agenda, business interests object

A woman holds a sign and leads a chant
Claudia Lainez, a coordinator with COPAL, leads chants during a rally at the State Capitol in St. Paul on May 8.
Ben Hovland | MPR News

Minnesota lawmakers are expected to put together the final pieces of the $72 billion state budget this week and approve a variety of new policies.

Democrats who hold the trifecta of control at the Capitol — the House of Representatives, Senate and governor’s office — have said the package includes pieces that have popular support and that have for years been held up under divided control of state government.

But business groups, health care organizations and Republicans have pushed back, saying they’ve had little input in shaping the budget and could face higher costs and more state mandates should it pass.

The Mayo Clinic earlier this month threatened to pull investments and projects from Minnesota unless a pair of provisions on health care pricing transparency and staffing levels in hospitals are dropped from a broader health bill or changed. 

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And some small business owners say they’re considering moving across the border as plans to implement a paid family and medical leave program and raise revenue for the state with new taxes and fees make their way through the Capitol. Finding replacement workers and paying a payroll tax to fund the family leave program would create financial hardship for businesses, they said.

“We have a presence in Ohio and we don't deal with really any of these mandates,” Ameet Shah, CEO of the Burnsville-based technology consultant the Shah Corporation, said. “We're competing nationally on what we can charge. So if the cost of doing business continues to accelerate here, it's going to be hard for us to continue to work in Minnesota.”

Taken together, the DFL stand on taxes and family leave have spurred condemnation from Minnesota’s business community. And the Minnesota Chamber of Commerce deemed the DFL agenda “anti-employer, anti-business.”

“I do think this is a historic session, because I think it is the potential cost and growth and spending that might be imposed, really is going to set the state on a path. And the concern is it's on a path that is not sustainable,” said Beth Kadoun, vice president of tax and fiscal policy for the Minnesota Chamber of Commerce.

As lawmakers put the final touches on tax and transportation budgets this week, they’ll consider proposals to impose a new fee for some package and food deliveries, a higher metro sales tax, higher income taxes for top earners, and new taxes for corporations and people who make money from capital gains. 

DFL lawmakers have said the state needs to bring in new revenue to fund schools, health care programs, public safety and infrastructure into the future. 

“We need to make investments all across this system, whether it’s higher education, whether it’s bonding to build some road and bridge projects and some wastewater infrastructure. We can’t just take the entire surplus and plop that into transportation, we’ve got to think about what do our kids and our grandkids deserve for us to have invested in the system that they will inherit,” House Speaker Melissa Hortman, DFL-Brooklyn Park, said. 

A person speaks during a press conference
Business owner Jodi Theis of Waconia spoke against a proposed paid family and medical leave bill Monday at the Capitol.
Dana Ferguson | MPR News

Republicans at the Capitol have opposed the efforts to impose new taxes and fees and said the state should draw from its $17.5 billion budget surplus for any new spending needs.

“I don’t think Minnesotans are expecting us to raise taxes. We have to cut government, and that looks at all of government spending,” House Minority Leader Lisa Demuth, R-Cold Spring, said. “I think we have to look at ways to reduce taxes rather than just piling on and making it harder to do business, to live here and to afford what we actually need.”

The DFL plan is also getting support from many. Last week, labor unions, faith leaders, teachers and others rallied outside the Capitol to support DFLers and to urge them to get their budget over the finish line. And they supported plans to impose new taxes on corporations to fund some of those budget bills.

“We need to come together like we're doing right now to stand up to the big money and make sure that the corporations pay what they owe in taxes,” Catina Neal Taylor, president of Minneapolis Federation of Teachers and Educational Support Professionals. 

“In Minnesota we won't stand as greedy corporations try to stop the policies our families need to thrive. In Minnesota we put the people first,” she continued.

The group also supported the creation of a state paid leave program and said it would help ensure that workers are able to take care of themselves and their families – no matter where they work. They said they also support the new payroll tax that would eventually fund it. 

“I'm willing to pay for it. My employees are willing to pay for it. It's affordable. Otherwise, I'm paying out of pocket for recovery,” said Alyshia Jackson, who owns First Class Cleaning Service in Golden Valley. 

Jackson had her gallbladder removed last year and she said that she had to shut down her business for three weeks while she recovered. She said if she’d had access to partial pay during that leave, she wouldn’t have had to stress as much over making ends meet. And she said that many other women of color frequently bear that burden, too.

“I went from working all day every day to doing completely nothing but my bills were still due,” she said. 

Lawmakers have a May 22 deadline to finish their business. Legislative leaders have said they hope to get done sooner than that.