WORTHINGTON — Representatives from the Minnesota Chamber of Commerce visited Worthington Wednesday as part of their Statewide Policy Tour.
Local business leaders from Worthington and Windom listened to chamber staff's presentation on how the 2019 legislative session affected business in Minnesota, asked questions and gave feedback on the chamber's agenda for 2020.
Minnesota Chamber President Doug Loon presented the chamber's benchmarks for success — legislative factors that affect business outcomes throughout the state. He explained that they all boil down to affordability.
Tax law affects where businesses locate and how they grow, Loon explained.
During the 2019 session, legislators were focused on bringing Minnesota tax law into conformity with federal updates made in 2017. The chamber was in favor of this effort, but wanted to see it done without an overall tax increase.
Gov. Tim Walz, Senate Majority Leader Paul Gazelka and Speaker of the House Melissa Hortman worked together to reach a compromise that resulted in a net zero tax increase.
Two changes in particular were in the chamber's best interest. Business property tax was reduced by 6%, and second-tier income tax was reduced from 7.05% to 6.8%. Loon said many business owners statewide fall into the second tier.
Although some measures that the chamber lobbied against did pass, many others were voted down.
"In my opinion," Loon said, "a whole lot of bad things didn't happen."
"Minnesota's economy is built around a large and robust healthcare industry," Loon said. He referenced the number of health care providers, insurance companies and medical technology firms based in Minnesota.
"We (the chamber) believe the private marketplace, as directed by the government, can be the best provider of goods and services," he continued.
In the health care field, the Minnesota Chamber has two areas of focus: accessibility and affordability. The legislature tackled a number of controversial health care bills this session.
Loon referred to the provider tax, also known as the sick tax. This is a 2% tax incurred on the patient when visiting a health care provider, with the collected funds supporting state-run health care systems.
This year, the provider tax was scheduled to end. Legislators voted to extend the tax, but agreed to cut the rate to 1.8%. The chamber sees this compromise as a small victory, Loon explained.
Another major health care discussion was the idea of moving to a single-payer system.
Loon said the chamber favors the private sector, and explained that Medicare and Medicaid don't reimburse health care providers at the same rate that the market demands. The difference in cost, then, is incurred by private firms, which subsequently increase costs for the consumer or reduce coverage. Loon added that under a single-payer system, the difference in cost would be the burden of taxpayers.
The chamber calls for a research committee to find "honest, non-political solutions that are affordable."
Loon said the chamber is concerned about "government intrusion" into the conversation between employers and employees wherein they negotiate pay and benefits. The chamber opposed the push for 24 weeks of paid leave this session.
Instead, the chamber advocates for a solution that creates options for employees but is not government-mandated.
Although the bill didn't pass this session, Loon believes the discussion isn't over and thinks the legislation will be proposed again in future sessions.
Wage theft legislation is also a major concern of the Minnesota Chamber. Wage theft is defined as an instance when an employer does not pay an employee for time worked. According to the Minnesota Department of Labor, approximately 40,000 Minnesotans pursue complaints of wage theft each year.
New legislation passed this session provides additional protections against wage theft (effective July 1) and classifies wage theft as a felony (effective Aug. 1).
Although the chamber supports penalizing intentional shortchanging of employees, it is concerned about employers who may be guilty of wage theft unintentionally. Loon explained that the chamber would prefer that accidental occurrences of wage theft be handled differently instead of being charged as felonies.
The chamber also believes that the new law is not specific enough in that it does not prevent municipalities from adding more wage theft regulations. For example, the city of Minneapolis is proposing additional city ordinances to prevent wage theft, Loon said. The chamber sees this as an overstep of government.
Loon said that Minnesota's transportation and infrastructure affects its competition with other states.
"The good news is, we're doing something right in Minnesota," he added, referring to public transportation and road safety. The problem is always funding.
The chamber opposed Gov. Walz's proposed 20-cent gas tax increase, which ultimately did not pass.
Walz's proposal also included removing the taxes on auto parts and rental cars, which partially fund roads and bridges. These taxes began in 2017 as a result of chamber lobbying efforts, Loon said. The chamber would like 100% of those funds to be used for transportation and infrastructure, in lieu of increasing the gas tax.
"We will be back at this," said Loon, noting that it's likely the gas tax increase will be resurrected in future legislative sessions.
Workforce development spans a number of local and statewide issues, including affordable housing and skills training. Loon added that in Minnesota, the population is aging faster than in most states. As population is affected by immigration and reproduction — and, as Loon said, reproduction should not be legislated — the problem must be addressed through immigration reform.
Immigration policy affects the local workforce pool, he said, pointing to the diverse workforce at JBS as an ideal. JBS Worthington General Manager Brad Hellinga said that of the Worthington plant's 2,100 to 2,200 employees, 30% are Hispanic or Latinx, 30% are African and 20% are Asian. More than 60 languages are represented among them.
Hellinga said a consistent problem JBS faces is affordable housing for employees. It's difficult to entice developers to build in Worthington, especially its proximity to Iowa, where state regulations make it 30% cheaper to build, he added.
Loon agreed that Minnesota state building codes and inspection costs are barriers to new development statewide. The chamber is aware that many businesses would benefit from affordable employee housing, and lobbyists are working to influence policy changes that will allow for more development.
Community members in attendance gave positive feedback on the chamber's priorities.