Minnesota, Winona chambers of commerce call for competitive taxes, fewer state mandates

April 3, 2019

Curtailing workplace mandates and increases to the corporate income and gas taxes set forth in Gov. Tim Walz’s budget proposal were high on the list of priorities laid out by members of the Minnesota and Winona chambers of commerce Tuesday.

The 2019 legislative priorities from the state chamber of commerce include reducing the tax burden for businesses owners, preventing the expansion of government health programs, opposing state-mandated paid leave, improving the state’s crumbling roads and bridges, and attracting and retaining skilled workers.

“We really don’t need the folks in St. Paul telling us what we need,” said Jim Pumarlo, the director of communications for the Minnesota Chamber of Commerce.

Pumarlo highlighted Minnesota’s high taxes — some of the highest in the country — as one of the biggest burdens for businesses owners across the state.

He said Walz’s proposed budget would increase the corporate tax rate significantly over the next four years and would drive the gas tax up by 20 cents a gallon, both factors that would not only negatively impact business owners but drive up prices for consumers.

For Joe Plunger, owner of Midwest Metal Products in Winona, increasing the corporate tax rate means passing the costs on to customers and businesses partners.

“We’re creating regressive taxes on the consumers of Minnesota,” he said. “It’s a tightrope.”

On the gas tax, Scott Myran, president of Mississippi Welders Supply Co., echoed Plunger’s concerns.

“My company uses 250,000 gallons of fuel a year,” he said. “That’s $50,000 off the bottom line, or $50,000 passed onto customers.”

According to Pulmarlo, Minnesota’s 28.6 cent-per-gallon gas tax is actually competitive, but that could soon change if Walz’s budget — which calls for a 20-cent increase to the gas tax to pay for transportation improvements — were to pass.

“The gas tax is a significant cost of doing business in Minnesota,” he said.

Instead, the chamber is calling on the Legislature to dedicate 100% of sales tax collected on auto parts to transportation.

Pumarlo said dedicating 100% of sales taxes from transportation-related purchases and auto parts would generate approximately $330 million a year for Minnesota’s roads and bridges.

The chamber also took aim at a proposal to enact mandatory paid leave for employees.

Under the proposal, employers would be required to provide 12 weeks of paid parental leave and 12 weeks of paid medical leave, which would be financed by a new tax on employers and employees.

Despite claims that the proposal would help make offering paid leave possible for smaller employers, Pumarlo argued it would ultimately result in lower wages and less competitive benefits packages.

“It’s difficult in southeast Minnesota to find help,” Myran said, adding that keeping wages and benefits competitive is essential to attracting and retaining skilled workers.

“In the past year we’ve elevated pay rates, we’ve added more benefits packages,” he said. “All of that is designed for recruitment and retention.”

Both Plunger and Myran made the case that these proposals would reduce what they could offer their employees creating a “snowball effect.”

“If you can’t afford to hire more people because of the burdens imposed, gradually we would probably shrink,” Myran said.