MARSHALL - Even as Minnesota's unemployment rate dipped to 4.6 percent this week, Republicans in St. Paul are fearful the business and job climate in the state is perched on a slippery slope.
House Minority Leader Kurt Daudt, in Marshall this week to speak at Boys State, said the tax decisions Democrats in St. Paul have made have lessened Minnesotans' opportunities to find quality, well-paying jobs.
He said while the unemployment rate is low, more than half of working Minnesotans are under-employed, meaning they're working at a job at a lower skill level or at a lower pay rate than they are accustomed to.
"These tax decisions have implications, and they have implications on Minnesota families and on jobs," said Daudt, R-Zimmerman. "I think the No. 1 thing that people need right now is a better job opportunity, a better-paying job opportunity. All of the decisions that Democrats have made have lessened the possibilities for that to happen, not increased them."
As an example of a result of the state's tax climate, Daudt cited Medtronic's decision last weekend to buy Ireland-based competitor Covidien for $42.9 billion in cash and stock - a move that would put the combined company's executive offices in Dublin where the corporate taxes are lower. However, the merged company would continue to operate in Minneapolis, where Medtronic employs more than 8,000.
"Over the weekend we found out that Medtronic is moving its global headquarters to Ireland how many emails have I gotten about companies leaving? Just got another one today (Thursday)," said Daudt. "An auto parts store (Advanced Auto) is moving 100 employees out, and moving their CEO and CFO. And Rochester is slowly losing IBM."
IBM announced last March it was moving some of its Minnesota operations to New York and Mexico.
Daudt said it shouldn't be up to government to create jobs, but that the people should create an environment where job creators can thrive. However, he said the combination of increased regulations and an un-friendly tax climate has made it more difficult to create jobs.
District 17 DFL Sen. Lyle Koenen of Clara City said the Medtronic merger had more to do with the national tax situation and what Ireland does with its tax structure compared to here. He said the state needs to keep an eye on trends in the business world but calls the deal normal business activity.
"Businesses are always moving around, there's nothing new about that," Koenen said. "A lot of times their consideration is based on several things, not just one thing like taxes. Do some businesses head for areas with lower taxes? Yes, you will see that. But it's also important to remember that last year Minnesota had a record number of new business starts."
Koenen said while the corporate tax rate in Minnesota is high, the state is middle-of-the-road when it comes to the effective tax rate, as companies take advantage of write-offs and tax breaks.
Concerning leadership at the Capitol, Daudt said Republicans feel good about gaining the seven seats they need to win back control of the House. Meanwhile, the GOP field of gubernatorial candidates aiming to face off against Dayton in November has been whittled to four. Daudt said balance is key to moving the state ahead in a positive direction.
"We'd like to restore a little balance back to St. Paul," Daudt said. "There isn't any right now no compromise, no balance. We think Minnesotans are better served when Republicans and Democrats have to come to the table and work together."
Daudt called out Democrats in St. Paul for unnecessary moves this past session that worked against Minnesota's economy. He argues that the state would have more revenue in the state's budget had tax increases not been put in place this year. Daudt, who is running unopposed this year, said Gov. Mark Dayton's "Unsession" idea to purge the state of antiquated and redundant policies and laws was little more than an election-year tactic.
He said some "un" business that was important to take care of this session was the repeal of some controversial taxes enacted under DFL rule.
Koenen said it's important to remember Minnesota has the fifth-fastest growing economy in the U.S. and that the state's housing market is on the mend.
"Neither the Democrats or Republicans in the Legislature have complete control over any of these things that affect us," he said. "Sometimes, we in the Legislature tend to think we're the center of the world; that's not the case."