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Excerpts from recent Minnesota editorials

October 14, 2013
Associated Press

The Free Press of Mankato, Oct. 11

Change federal budget policies

The malady of U.S. political dysfunction isn't likely to react to even a dose of strong medicine, so we should consider preventive strategies that could stem the onslaught of our chronic fiscal condition.

The current breakdown of negotiations in Washington over budgets and debt limits will continue as long as we've got a political system that allows small groups of lawmakers to obstruct the process because they come from extremely safe political districts.

The power of caucus leaders like Speaker John Boehner has been diminished and the conflict industry including big media add gasoline to these fires of discontent and create a chaotic situation where almost nothing gets done.

Routine political appointments are held up. Seemingly uncontroversial laws like the farm bill and transportation bill don't get renewed.

The prevention policies the U.S. political system needs are not rocket science. Other modern western democracies connect spending policies to debt policies and don't operate them separately. That's how it used to work in the U.S. too. Going back to the strategy makes sense, as we are one of the few industrialized nations that do spending and debt decisions so separately.

But there are also simpler strategies that would protect the average taxpayers and others who rely on consistent federal policy. On budget resolution issues, we need to simply require that budgets currently in place will continue at current spending levels should we not be able to approve a new budget in a timely fashion. This simple provision would show taxpayers that while lawmakers might need time to work out their differences they will not make the rest of us pay for their dawdling or obstruction.

The farm bill is a case in point. It appears the lack of a farm bill will push us back into policies of the 1940s, possibly doubling the price of a gallon of milk to $6 or $7. Bankers who need a certain amount of certainty on farmer's financial state can't approve routine loans if the law reverts to 1949.

Taxpayers not only have to put up with frustration of a political stalemate, they often pay a price in jobs and business. The cost of the shutdown was estimated during the first week at $1.6 billion in lost economic activity, according to IHS Inc., a market research firm in Lexington, Mass.

And Bloomberg news reports that office closures are costing the U.S. economy about $160 million a day.

Those figures are just hard for taxpayers to accept. It's no surprise the congressional approval rating is down to 5 percent.

But it doesn't have to be this way. It seems both parties would have an interest in creating preventive policies that protect hard-working people from the devastating economic impact of a government shutdown. That's the least our leaders should be willing to do. They all say they don't want a shutdown. There's one way to prove it.

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St. Paul Pioneer Press, Oct. 12

Our demographic shift and its threat to how we compete

We've been warned for years about the daunting demographic challenges that loom in Minnesota's future.

We've wrung hands, formed task forces and invested millions to cope with one aspect of the changes -- the stubborn achievement gap between the state's white students and their peers of color. It remains among the nation's largest.

Still, this future we've been warned about -- driven by population shifts and the retirement of the baby boom generation -- is "coming on like a tsunami," Minnesota State Colleges and Universities Chancellor Steven Rosenstone told us.

Rosenstone's approach to this long-running discussion is useful and necessary. He frames the numbers in market-oriented and competitive terms that focus on the state's "fragile human capital pipeline."

From his perspective as a leader in efforts to align education with the state's workforce needs, the topic takes on new urgency:

-- No state in the nation relies on a highly educated workforce more than Minnesota, Rosenstone told us. By 2020, 74 percent of jobs here will require some post-secondary education.

-- The challenges will be particularly acute in the Twin Cities metro area, as the population grows by nearly 1 million over the next two and a half decades. Growth will come from people of color as the region becomes increasingly diverse.

-- "These are precisely the populations that have been traditionally underserved by higher education," he said, representing those who in the past were the least prepared to pursue or complete their schooling.

That means the "pipeline" that connects Minnesota businesses to the trained workers they need is not flowing as it should, he said.

The situation, according to Rosenstone, is a "fundamental threat to the vitality of Minnesota."

A well-educated workforce will be needed to retain the portfolio of Fortune 500 companies that call the state home, to allow young companies to grow and to attract new firms.

If we're the state that requires a greater-educated workforce than any other in the nation, Rosenstone said, we should be leading the others in the number of students going on to college.

We're not.

Instead, Minnesota's achievement gap is shockingly high, he said, and its four-year high school graduation rates are shockingly low. In 2011, the state was last in the nation in graduation rates for Asian, Hispanic and American-Indian students and second-to-last for black students. White students were in the middle of the pack, tied for 23rd. Many fear that the onetime brainpower state has lost its edge.

Yet "education is the closest thing we have to a silver bullet in getting people to move from poverty to the middle class," Rosenstone told us. "It is the closest thing we have to a silver bullet in reducing disparities in our community."

Without education for the jobs of future, people won't have work with a family-sustaining wage, he said. They "will be condemned to a life of poverty. That's unacceptable. We can't afford to leave anybody behind."

In responding, he's convinced that we must understand that "this is an emergency." Rosenstone credits St. Paul Mayor Chris Coleman for characterizing the impact of the achievement gap that way a couple of years ago.

What we're facing is "not just a little problem; it's not going to disappear," Rosenstone told us. "It's going to be around for long time unless we really treat it as an emergency."

From his vantage point in higher education, "we need to make sure every student graduates from high school, graduates on time and is prepared to begin some kind of post-secondary education."

His market-oriented approach also makes the challenge clearer: "Just about everything we imagine for our region, everything we dream of for Minnesota is at risk if we don't fix this," he said.

Many millions of dollars and person-hours have been spent trying. The problem is easy to talk about and hard to solve. But there it is, and it's useful to have the chancellor of a diverse, statewide system that serves 400,000 students a year trying.

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Duluth News Tribune, Oct. 11

Pay attention, Minn., to biz-unfriendly rep

States considered high-tax and thus not the friendliest for doing business "suffer from the same afflictions: complex, non-neutral taxes (and) comparatively high rates," the Tax Foundation, a Washington, D.C.-based think tank, opined this week in releasing its 2014 State Business Tax Climate Index.

And apparently Minnesota is afflicted because the Gopher State ranked a dismal 47th, or fourth from the bottom, on the annual index.

"Minnesota . enacted a package of tax changes that reduce the state's competitiveness, including a retroactive hike in the individual income tax rate," Scott Drenkard and Joseph Henchman wrote for the Tax Foundation.

"While taxes are a fact of life, not all tax systems are created equal," their report stated. "One measure, total taxes paid, is relevant but other elements of a state tax system can also enhance or harm the competitiveness of a state's business environment. . It is important to remember that even in our global economy, states' stiffest and most direct competition often comes from other states. The Department of Labor reports that most mass job relocations are from one U.S. state to another. . This means that state lawmakers must be aware of how their states' business climates match up to their immediate neighbors and to other states within their regions."

If that's so, Minnesota has little to fear from its neighbors to the east and south: Wisconsin ranked 43rd in the index and Iowa 40th. But North Dakota was 28th and South Dakota was an impressive — and worthy of worry for Minnesota — second.

So what do high-ranking states have that Minnesota and others at the bottom lack? The absence of a major tax, Drenkard and Henchman answered.

"Property taxes and unemployment insurance taxes are levied in every state, but there are several states that do without one or more of the major taxes: the corporate tax, the individual income tax, or the sales tax," they explained. "Wyoming, Nevada, and South Dakota have no corporate or individual income tax; Alaska has no individual income or state-level sales tax; Florida has no individual income tax; and New Hampshire and Montana have no sales tax."

Liberal-minded Northlanders might be quick to disregard the Tax Foundation and its determinations and views. Despite its efforts to remain nonpartisan and its clean listing at sourcewatch.org, the Tax Foundation sometimes is labeled as right-wing extreme or libertarian, probably because of its advocacy for reducing the tax burden on all. The nonprofit has been around since 1937, however, suggesting its message, analysis and revelations about how much Americans are being taxed are more than heard; they're respected.

Regardless of the source, warnings about Minnesota's taxes and business climate demand serious consideration — in St. Paul and across the state, and especially in border cities like Duluth.

In May, billboards went up near Minnesota's western border, touting North Dakota as "open for business." The suggestion was that Minnesota wasn't because of taxing and spending decisions made by the DFL-controlled 2013 Legislature. The Minnesota Chamber senior vice president told the News Tribune Opinion page at the time that, "We raised the price of doing business in Minnesota this legislative session."

Then, this week, in a commentary in the News Tribune, the commercial real estate development association NAIOP warned that a new warehousing tax enacted by the Legislature this year, along with other business-unfriendly business-to-business taxes, threatens to force Minnesota businesses "out of our state to (neighboring states) without such a tax."

While it's true Minnesota ranked eighth last month on Forbes 2013 List of the Best States for Business, the Minnesota Chamber and others were quick to point out that the ranking didn't take into account the effects of DFLers' decisions this past legislative session, as they're not yet known.

No matter who's spinning it or ranking it, Minnesota, like other states, has good reason to be concerned about its business climate. A strong, tax-friendly, business-friendly environment equals jobs, which equals prosperity and a healthy economy. State leaders have more than enough motivation to seriously consider every bit of criticism and praise and then to act accordingly. The index released this week by the Tax Foundation was only the latest bit of concern. How will lawmakers respond?

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