• 2022 Chamber Federation Priorities

        

  • 2022 Federation Priorities 

    Accelerate Economic Growth

    The state’s 2-year budget was set in 2021 with a 10% increase in spending from the previous biennium. Minnesota will have a significant budget surplus providing the opportunity to accelerate our state’s economic growth and improve Minnesota’s tax climate. The state will be flush with cash:

    • $1.15 Billion federal funds unspent (from $2.8 billion federal ARPA bill)
    • $2.39 Billion budget reserves (after expected transfer in November 2021)
    • Billions in additional surplus dollars expected after the November 2021 forecast

    Replenish the Unemployment Insurance Trust Fund:  Use American Rescue Plan (ARPA) funds and the large budget surplus to help resolve the $1.13 billion deficit in Minnesota’s Unemployment Insurance Trust Fund. Nearly half of the other states in the country have replenished their unemployment insurance funds with money from the CARES Act or ARPA. Minnesota lawmakers could impose a significant payroll tax hike on employers to replenish the fund. Increased payroll taxes will further impede economic recovery. Employers should not be penalized, especially when state and federal funds are available to cover this pandemic created deficit in the Unemployment Insurance Trust Fund.

     

    Tax Relief: Reducing Minnesota’s tax burden continues to be the number one priority of Minnesota businesses. Minnesota has the third highest corporate income tax, and fifth highest personal income tax rate in the country. These taxes, coupled with other significant tax burdens are one of the major factors driving an increase in the number of businesses to consider locating and expanding in other states. The Legislature can encourage long term economic growth by reducing uncompetitive taxes that are hindering entrepreneurship, talent recruitment and retention, and business growth and investment. This includes getting Minnesota out of the top ten highest tax rankings by lowering top rates for both corporate and individual income taxes: continuing progress in reducing the state business property tax levy and enacting federal estate tax conformity.

     

    Enact Employer Friendly Workforce Strategies: The ability to attract and retain workers is as important to employers as reducing the overall tax burden. Minnesota employers are subject to a unique 0.1% payroll tax that generates over $150 million dollars per biennium for workforce development programs that too many employers simply do not use. A more collaborative approach in the development and management of and access to these programs would provide a greater return on investment for both employers and our workforce. Further, allowing employers to receive a credit on this tax to support their own customized training specific to their needs would have an immediate and direct benefits to the workforce.

     

    Facilitate Innovation and Productivity:  An important ingredient for Minnesota’s future success is a thriving and growing private sector. Business success is contingent on an environment that is attractive to investment, risk-taking, innovation and growing productivity.  Access to capital is also critical. Encouraging investment and innovation through the angel tax credit; enhancing the research-and-development tax credit and similar tax incentives to encourage investment and productivity improvements will help generate needed capital for new business growth.

     

    Do No Harm

     

    Oppose additional mandates and workplace restrictions: Minnesota businesses must be provided with the autonomy to make appropriate and responsive decisions for their workplace and changing economic conditions. We support employer flexibility in determining workplace wage, benefit, scheduling and staffing decisions. Employers design benefit packages to meet their employees’ needs. Employer protections must be recognized, addressed, and implemented if Minnesota legalizes use of recreational marijuana. In addition, Minnesota’s environmental and regulatory process must provide greater timeliness, accountability, and predictability.

     

    Streamline Inefficient Regulation: Reasonable regulation is essential to keeping Minnesota’s workers, consumers, and our environment safe and healthy, but Minnesota burdens employers with regulations, certifications, licensing, and permitting requirements more than other more competitive states. Overregulation harms our economy – by raising prices, thwarting competition, stifling employee earnings, and can keep otherwise qualified individuals unnecessarily under-employed – or out of the workforce altogether. We support reforms requiring the state to use the least restrictive regulation necessary and remove duplication. Minnesota’s environmental and regulatory process must provide greater timeliness, accountability, and predictability.