Column: State cannot afford to drive businesses away

Not long ago, I received a letter from David Murphy, president of Red Wing Shoe Co., who told me about the problems that will occur with the company if the Minnesota House and Senate continue with plans that will devastate our business community.

Like nearly every other business not associated with state government, Red Wing Shoe faces economic uncertainty in this lousy economy.

Sales are down; plant operation hours have been reduced; salaries have been frozen.

And now, House and Senate Democrats want them to pay substantially higher taxes.

Mr. Murphy says, “We need help from our state government, not additional burdens. Increased taxes in Minnesota will put strain to the breaking point on our business. We have plants in Kentucky and Missouri, which will become more cost advantageous, if the tax burdens increase as proposed by the House and Senate bills.

“We need your help in creating a budget that reduces costs, strips away inefficiency and does not simply rely on taxing corporate and individual income earners who are the very ones who create and retain Minnesota jobs. Unfriendly legislation impacting Red Wing Shoe will certainly negatively impact the 2,100 employees or our company and even more directly our 1,200 Minnesota employees.”

Here is a company that has literally been a mainstay in Red Wing for 104 years telling me that if these tax increase bills are approved, the business would likely make a larger profit if it produced Red Wing Shoes at a plant located in Missouri or Kentucky.

Red Wing Shoes isn’t the only company outraged by these proposals.

Just this week, VitalMedix Inc., a Minneapolis-based company developing a hemorrhagic shock drug designed to keep alive a victim suffering near-fatal injuries, announced it may relocate to Wisconsin because of its more favorable business climate.

3M has also come out in opposition to these tax hike proposals.

So why do the Democratic leaders in the Minnesota House and Senate insist on continuing down this path toward economic destruction?

These aren’t political points of view being shared by executives — they’re formulating a business plan. It’s a serious conversation when business leaders are trying to determine whether to continue business in this state or expand elsewhere.

Yet, as the House and Senate majorities continue to debate which taxes they want to increase, they also approved a $349 million economic development finance bill that did nothing to create jobs in this state or entice new businesses to relocate here. Thankfully, Gov. Tim Pawlenty recognized these problems and vetoed the proposal.

Sure, it funded a number of state government agencies like the Department of Employment and Economic Development, but it also forgave nearly $33 million in future loan payments that St. Paul owes Minnesota through financing the Xcel Energy Center hockey arena.

This has many folks asking, “If the state can throw away $33 million, why do lawmakers want to raise my taxes?”

They make a good point.

And it has me wondering about our state priorities.

The Democratic majority has established a strange set of priorities by indicating that they want to raise taxes at this time. I would suggest that now is the time to create a much better business environment and allow companies to expand and hire back those that have been laid off. You cannot do this with a jobs bill that has no jobs in it.

When companies like Red Wing Shoe begin to question whether they can continue to operate in Minnesota, we need to take those concerns seriously. It’s time to protect local businesses, provide jobs, and find security for families who are struggling mightily as we try to solve this $6.4 billion deficit.

Tim Kelly, R-Red Wing, can be reached at (651) 380-4345 or rep.tim.kelly@house.mn.

Tags: tim kelly, opinion, columns