I had an opportunity to meet with an employer this week in
northern Minnesota. The employer was planning to build a $300M
facility that would support more than 120 high paying jobs with excellent
This plant will be built in another state. Excellent construction jobs, long term local
economic development, and the revenue the state would have received from it all
through taxes will not benefit Minnesota.
I asked the employer what we could have done to be more
competitive. Naturally there are many
factors that go into site selection. In this case, it was not our low
temperatures or high taxes. Here are my takeaways:
Speed to Market. Because of our permitting regulatory environment, Minnesota
is at a huge disadvantage. In this case, Indiana offered a proposal that would allow construction in less than nine months.
In Minnesota, the permitting process was at least two years, and with greater uncertainty. The opportunity cost of production,
financing costs and uncertainty would cause rational decision makers to
look to other states without these delays. Minnesota needs to prioritize critical opportunities and compress timelines by
putting in parallel state and federal approvals. One size fits all labor requirements hurt the workers they attempt to
help. We need to be hungry for family supporting jobs and predatory when competing with other states. When labor requirements are arbitrarily
superimposed over prospective contracts, the costs force employers
elsewhere. Labor contracts protect workers and ensure that states do not engage in a “race to the bottom” for
wages and benefits. However when they are arbitrary and lack flexibility, Minnesota stays stuck at the bottom
with no shot to compete.
Attitude is everything. Economic development becomes real when the state and local units of government share in the
desired goal of the economic success. What if the Pollution Control Agency (MPCA), the Department of
Natural Resources (DNR) and state and local permitting authorities all had a goal of working with business owners?
Many great folks in the agencies do on a daily basis. However it would be silly to ignore the
fact that Minnesota businesses suffer under unnecessary delays and feel snarled in
bureaucratic red tape. What if economic success was not seen as contradictory with environmental
Leadership matters. Minnesota’s governor is our ambassador,
promoter and salesman. The Governor
can (as he did this year successfully with the Vikings stadium) drive
legislation and public support for major initiatives.
Legislative, community and business leaders also have a
role. We need to work together to rekindle Minnesota’s success story. Our state is a pioneer
state. We have the people and resources to attract the best to do their best here in Minnesota.