It appears that Minnesota businesses had a reason to be apprehensive.

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Just after the 2022 election, which gave control of state government to Minnesota Democrats, Jonathan Weinhagen wrote a commentary outlining how they could work with the region’s business community to strengthen the economy and improve Minnesotans’ lives. He even said, “Business has nothing to fear from DFL dominance” in a piece for the Star Tribune. However, now that the legislative session has concluded, it’s clear that Democrats didn’t follow Weinhagen’s advice. Instead, they appeared to act as if this might be their only chance to have full control and pushed ahead with a long to-do list without regard for how it would affect Minnesota’s ability to retain and expand jobs.

During this session, DFLers largely disregarded the guardrails that Weinhagen recommended. In November, he wrote, “The surplus should temper the desire of some Democrats to raise taxes, which would be a bad idea as companies and families deal with unprecedented levels of inflation and economists predict a recession.” Given the events of the past six months, it seems that Democrats either didn’t take that advice to heart or never saw it.

While Weinhagen’s November column urged the Legislature to work with the business community on issues such as rising costs for families and businesses, affordable housing, and infrastructure development that could fuel growth, the outcome of the session doesn’t appear to have paid much attention to that advice. The child tax credit was an excellent step toward moving thousands of Minnesota children out of poverty, but many of the DFL’s actions added to the cost of living for families and businesses, rather than reducing it. For example, the paid family and medical leave program needed more flexibility, and policymakers ignored suggestions to that effect.

However, the budget did include new funding for affordable housing, which allowed Minnesota to maintain its edge in that area. Additionally, there was a one-time investment of $500 million in the Minnesota Forward Fund for large-scale economic development projects, which was a significant step in the right direction. Finally, a bonding bill received bipartisan approval, which was a positive development.

Weinhagen’s November column also urged elected officials to make wise use of the record surplus, but most Minnesotans were shocked to learn that the Legislature tacked billions of dollars in new taxes onto the already massive $17.5 billion surplus. Although some of the worst ideas were dropped, such as a new income tax bracket and a worldwide combined reporting tax, entrepreneurs and business leaders may feel as if their contributions to the state aren’t a priority.

While DFL legislators occasionally met with business representatives during the session, that feedback was seldom incorporated into the final legislation. Weinhagen hoped that the 2022 election would be a message to stay the course and work together and that business members would want to see cooperation across the aisle, even if one party was in charge. However, this session did not feature the expected level of bipartisan cooperation.

Looking ahead, Weinhagen believes that Minnesota and the Twin Cities have a lot going for them, but policymakers should not use this as an excuse to tamper with the foundations of their success. Instead, policymakers should recognize that businesses, employers, and entrepreneurs are vital to our state’s overall wellbeing. Returning to balance in Minnesota will be a challenge, but Weinhagen is optimistic that it can happen.

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