March 7, 2008
State government must hold the line on spending as lawmakers seek to address the projected shortfall of nearly $1 billion in the state’s general fund, says David Olson, Minnesota Chamber president.
“The downturn in the economy demands that businesses and families alike cut back on their spending,” Olson said. “State government must take the cue and also live within its existing revenues.”
Gov. Tim Pawlenty released his recommendations today on how to balance the budget, saying he will oppose any efforts to increase broad-based taxes. “We wholeheartedly support the governor’s message to address the deficit by holding government accountable and by using available resources,” Olson said.
The state faces a projected shortfall of $935 million for FY 2008-09. Furthermore, budget planning estimates for FY 2010-11 now show a shortfall of $1.086 billion; that swells to nearly $2.13 billion when inflation is factored.
“Businesses are prepared to grow, but growth in Minnesota, like any other state, is not without its obstacles,” Olson said. “One recurring theme from businesses is that they consistently give our state higher ratings as a place to live vs. a place to run a business.”
Minnesota Chamber members underscored that message in policy meetings last summer and fall throughout the state, Olson said. It was reiterated this week.
Nearly 700 business leaders convened Wednesday in St. Paul during the Minnesota Chamber’s annual Business Day at the Capitol. Then, a day later, Olson listened to concerns of manufacturers during roundtable sessions in Brainerd, Rochester and South St. Paul. He was accompanied by Pawlenty and Commissioner Dan McElroy, Department of Employment and Economic Development.
It’s noteworthy, Olson said, that legislative leadership told business leaders Wednesday that they will not increase taxes to address the 2008-09 shortfall. “We hope they stick to their word,” he said, adding, “Let me be clear. We will oppose any rate increases or base changes that raise more money. The only exception is the exact language on foreign operating corporations that was worked out in 2007.”
Olson said companies of all sizes and types face many challenges from health care costs to workforce shortages to a reliable supply of energy. Their overriding concern, however, remains the ability to compete in a global economy.
“It’s critical to cut spending now, which also will reduce the projected budget gap for the 2010-11 biennium,” he said.
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