As a member of the National Federation of Independent Business (NFIB) I had the chance to meet Minnesota Governor Tim Pawlenty on Wednesday morning. During the morning session we visited with State Senate Republican (David Hahn,Eden Prairie) and then State House Democrat (Julie Bunn, Woodbury), both were very informative. Then we went over to the Governor’s office and twenty of us met with him for a half an hour or so.
Despite your political affiliation, I think it is really cool to meet your elected officials. Last year, Brenda and I met with Senator Amy Klobuchar in Washington. With the Governor, though, I was very impressed with his viewpoints and approach. I do lean on the Conservative side of things, especially fiscally; so the Governor’s thoughts already lined up with mine. Here are some examples, and since I didn’t take notes from the sessions some of the statistics might be a little off – sorry!
- We talked about Streamlining Environmental Permitting. At this time, the three main Government agencies (DNR, Pollution Control Agency and Department of Agriculture) have no real pressure to approve anything. Private sector companies that are run like the government are soon out of business. And frankly, we all know most government programs are bankrupt. The new legislation being proposed (HF 3079, SF 2761) wants to force the agencies to approve or disapprove the permit within 150 days. To me that seems like a long time anyway! One of the members has had an active permit being reviewed now for 26 years. LITERALLY! The Governor was shocked by this information and is having a staff member follow up on that particular permit. In general the delays are monstrous. One problem is that without any penalties or consequence (like the department’s budget can’t be approved without full compliance of 150 days) these agencies will just blow this off.
- An interesting side point was a major development in Northern Minnesota (I didn’t write down the name) was having significant issues getting permits for development. There are a bunch of Minnesota investors involved and this had been in the news, condemning the slowness of our government. The Governor calmly told us what was really happening. The developers had not filed the correct permits, missed deadlines and basically didn’t follow any procedures. The Governor called the CEO himself and told him that he needs to back off or the Governor will hold a press conference and tell the world that this developer hadn’t filed the right permits, missed deadlines, etc. Everything has been quite for the last three months….. Not only did this story make me smile, but it also showed me the Governor isn’t just about bashing the government agencies in general and will find out what is reasonable. AND he didn’t pass the buck to someone else. This story also reminded me there is ALWAYS two sides to every story and issue. Without question, there is logic on the liberal viewpoint of things.
- Healthcare Mandates. There are a lot of specialized mandates being presented. One of these is Expanded Autism Coverage. The issue here is that if one of my employees has an autistic child and then our insurance company is forced to cover additional services; our rates skyrocket. Blue Cross has a similar coverage already which reports a $40,000 per year average cost and some claims go as high as $100,000. So, this one situation can force me out of providing coverage to all my employees, as we simply wouldn’t be able to afford it anymore. The point, would it be hard to have an Autistic child? Of course. But, in any of these situations, along with some of the provisions in the new Federal Healthcare bill the money comes from somewhere. By adding new services, covering more people, eliminating pre-existing conditions, etc. those fees will come from somewhere. I’ll give you a bit of time to figure out where they might come from. OK, I’ll give you two places; increased premiums or taxes.
- Some of the legislation is getting crazy. Did you know there is a bill (HF 2810, SF 2408) that requires mandatory bathroom breaks?? The term “Nanny-state” is relevant.
- Some of the members wanted to reduce Corporate Income Tax and expand consumption taxes, such as sales tax. The Governor replied that while this sounds like a really good idea, once you start peeling back the layers, it just won’t work. According to him, the three main places to increase sales tax is a) clothes b) healthcare and c) business to business services. With clothes, this would generate only $190MM in revenue- – which it is a lot and would be enough to significantly reduce corporate income taxes. Healthcare – we are having issues with increasing costs of healthcare and taxing on top of that is a tough deal. Business to Business taxing? This hurts business, the very thing we should be trying to promote. I liked his reasoning and difference between the Pundit/Theory world of what should be done, to the practical – what can be done world.
- If I can assign one basic principle to the Governor now, it would be controlling costs. The simple fact is that all of us deal with balancing a budget. To do that, we can either raise income or cut expenses. PERIOD. It is that simple. So, we can raise taxes to generate revenue. I am not a believer that raising taxes generates better economic activity. Minnesota is already among the highest in most taxing categories. We are looking at potentially losing a US Congress seat due to the fact that we aren’t growing near as fast as other states. Businesses do not want to come here because of the current tax structure. So, we have to cut costs. To cut costs, as in your own budget there are some really tough decisions to make, but they need to be made. Face it, if you have only $300 left in your household budget and are looking at a $300 car payment, $100 Cable bill, $100 healthclub membership and $100 Buck Hill skiing pass – well, you have to cut something out. You don’t want to, but you have to. What is the right thing to cut? Well, it depends on each person and what they value. I don’t believe there is a clear cut answer, though I’m sure some answers would float to the top as better. The point is, there are a lot of things we, as citizens of MN, want to spend our money on but if the money isn’t there, it just isn’t there.
- Did you know that 42% of the entire MN budget is spent on K-12 expenses? Of that 80 some percent is related to employee wages and benefits. It is by far, the largest expense. Did you also know the most powerful lobbying group, BY FAR, is Education Minnesota, which has 55 lobbyists on staff. The next closest?? 11. They pay millions on every election. Everyone is afraid of Big Labor, but the simple fact is they are controlling the biggest part of the budget. All of us in the private sector would love the entitlements, pensions, benefits, salaries, job security, etc that our teachers are receiving. Both of my parents were teachers. My birth mom is a teacher. Teaching is one of the hardest and most important jobs we have. But, I think we have to control costs, especially with these retirement packages. Our government spending is bankrupting not only our generation, but our kids generation as well.
Bottom line – is well, the bottom line. I hope Americans understand basic fiscal prudence and the long term consequence of spending. I want a profitable country, even if it means having to cut good programs.
John Long is the founding Partner and CEO of Avionté, a customer-focused provider of staffing software solutions. He has extensive knowledge of the staffing industry that began with four years at Paychex, where he developed an in-depth understanding of back-office functions, specifically with payroll software processes. Over the next several years, John worked for established staffing software firms in advanced roles that included President, Vice President of Sales and Chief Revenue Officer. John’s ability to empathize with staffing software users and fully comprehend their needs is a direct result of his hands-on involvement at every level. John holds degrees from St. Olaf College in Math, Computer Science, and Statistics. John Long can be contacted at 651.556.2121, or by email at email@example.com. Visit Avionté online at www.avionte.com.