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Governor candidates tackle big questions in state economics

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Gubernatorial candidates Lori Swanson (left), Tim Walz, Jeff Johnson and Erin Murphy address a bevy of complex economic questions -- drawing upon their diverse backgrounds, occupations and political leanings. Steve Kohls / Brainerd Dispatch2 / 2

NISSWA—The state's gubernatorial candidates—with the notable exception of Tim Pawlenty—converged on Grand View Lodge in Nisswa Thursday, June 28, to tackle economics.

Though this was hardly a superficial take on the subject, the candidates, including DFLers state Attorney General Lori Swanson, Rep. Tim Walz, D-Mankato, and state Rep. Erin Murphy, DFL-St. Paul, as well as Republican St. Louis County Commissioner Jeff Johnson, were asked to expound on a number of complex topics that look to shape much of Minnesota's future.

In their opening remarks at the Economic Development Association of Minnesota's 2018 Summer Conference session—billed as "All Things Legislative: What to Expect Moving Forward"—each candidate was invited to introduce their compulsions for running and their general economic positions as gubernatorial hopefuls.

• Johnson: "I came to give people more control over their own money, more control over their own businesses, and over their own kids and education, and over their own health care," said the St. Louis County commissioner, who criticised what he sees as a state hostile to business, a product of bloated, overbearing government agencies and regulations that hurt the endeavors of individual entrepreneurs.

• Murphy: The DFL-endorsed candidate for governor pointed to a career of service in the state Legislature—under both GOP and DFL governors—as well as an upbringing that emphasized the well-being of people. "I grew up in a family who taught me about a powerful kind of politics about improving people's lives," Murphy said in her opening remarks. "And when we use that together as Minnesotans we can build a future for the people of Minnesota. That's exactly what I want to do as this state's next governor and I want to do it with you."

• Swanson: The three-term Minnesota state attorney general said government plays a vital role in ensuring people have the right social foundation—from cradle to grave—to pursue a secure, prosperous life. "That's what it's really about," said Swanson, who touted her credentials as a "problem solver" in this regard. "It's making sure people can have a shot at a decent job, they can pay the bills, that they can have health care that isn't going to bankrupt their families, that their children can get a good, affordable education and that someday when they retire they can have a pension and a dignified retirement."

• Walz: The former high school teacher and former enlisted soldier extolled on Minnesota's strongest resource—its people—and said he would push for bipartisan coalitions that build up the workforce in a holistic manner, through improving wages, working conditions, infrastructure, health care, housing, etc. "The highest measure (for prosperity) is quality of life," Walz said. "Are our people happy and safe and have opportunities?"

The issue of Amazon

In early 2018, Minnesota (specifically, the Twin Cities) did not qualify for the 20-city shortlist of cities the online retail giant was considering for its new second headquarters—an initiative that looked to bring 50,000 jobs, as well as construction spending in the ballpark of $5 billion to whichever area it was established.

Candidates were asked to give their thoughts on the subject of attracting huge businesses like Amazon to Minnesota.

• Murphy: First off, Murphy criticized the lack of transparency on the issue of the state's courting of Amazon—"If there's going to be a public process, if there's going to be a public bid, then the information should be open to the people of Minnesota," Murphy said. She also took issue with a kind of divisive cronyism that characterized these dealings, she said—with Amazon pushing the state to make concessions to attract its business, often to the detriment of industries and companies that already invested in Minnesota. By creating a foundation of infrastructure, education, housing and mass transit, she added, these opportunities will become more viable.

• Swanson: The state attorney general cautioned against large enterprises—notably, in terms of hurting small business or sacrificing one enterprise (for example, Best Buy) for another (its direct competitor, Amazon), which damages the labor force at the same time as it builds it. Amazon, she said, ultimately rejected Minnesota's bid because the state did not feature a satisfactory well of technology-proficient workers, which is a problem that can be solved with fostering education, then fostering partnerships between companies, unions and communities.

• Walz: "We have to be proactive, not reactive," said Walz, who spoke critically of "get-rich-quick schemes" like Amazon, Foxconn in Wisconsin, or other large enterprises that look to single-handedly boost an economy when more substantial changes—such as partnerships between research, technology and business, the private and public sectors, or workers and their governments—are ultimately more beneficial and more sustainable. In doing so, Walz noted, these large enterprises will come to a better-positioned Minnesota.

• Johnson: "This is not rocket science and no one else is mentioning this, but we have to be more competitive as a business climate," said Johnson, who compared Minnesota unfavorably to other states in this regard. He also expressed opposition to the "big-deal model" typified by Amazon's proposal—which, he noted, creates few jobs and most of the profits are taken out of state.

Funds, funds and more funds

During the session, the candidates were asked how they would address the use of state fund depositories—including the Minnesota Investment Fund (grants and loans for expanding businesses), Job Creation Fund, redevelopment and contaminated land clean-up funds (used to remove blighted buildings and for soil purification).

• Swanson: The state attorney general pointed to her lawsuit with 3M—a case revolving around the leaking of chemicals into the watershed in east St. Paul by the manufacturing giant, upon which she litigated a settlement for more than $800 million. Clean-up efforts were funded by these government resources, she said. "It would have been impossible for these communities to fund this on their own, nor was it economically viable because these are expensive projects," Swanson said, speaking on the general use of these funds.

• Walz: These funds and their effectiveness dispel a "myth," the representative of the 1st Congressional District said, because they prove seemingly disparate groups can work well together—whether that's urban versus rural, public versus private interests, or the government and everyday Minnesotans—for the common good. Walz said he is a believer in the power of free markets to foster growth, but he is also a realist who acknowledges the power of these programs to stabilize markets when they fail. He noted there needs to be accountability and transparency for these funds to function properly.

• Johnson: The redevelopment and contaminated land clean-up funds should take priority, the lone GOP candidate said, because not only is there an environmental benefit, but an infrastructure benefit attached as well. In terms of all these funds, Johnson expressed support, if skeptical and guarded. "I am open to all of these programs," Johnson said. "But there will be a higher level of scrutiny when I'm governor."

• Murphy: Speaking on her experience when she was the state House majority leader, Murphy said the state saw what happens when these funds are gutted—notably, in the wake of the 2008 Great Recession, as well as the policies of former governor Pawlenty. If funded and accounted for responsibly, she said, they're proven to spur economic growth and foster stronger communities.

Do you believe in Angel?

The Angel Tax Credit Program provided a 25 percent credit to investors or investment funds that put money into startup companies focused on high technology, new proprietary technology or a new proprietary product, process or service in specified fields. It became defunct on Dec. 31, 2017.

The candidates were asked if they would support refunding and resurrecting the program.

• Walz: In support of the program, Walz took aim at legislative dysfunction and uncompromising practices by Gov. Mark Dayton's administration that ultimately stonewalled popular and necessary programs like the Angel Tax Credit Program. "I think you're going to hear this across ideologies, we're all going to agree it's needed, it didn't get done," said Walz, who agreed with Murphy that research backs the effectiveness of the program. "So the issue here is about leadership ... we know that it works, the only issue is broken politics. We're accepting this as the status quo. Do not accept it."

• Johnson: In a short answer, Johnson said "Yes," he would support the Angel Tax Credit Program—though, he noted, it would form part of a larger push for "getting government out of the way of people" and spurring innovation and economic growth.

• Murphy: "It's a smart investment," said Murphy, who noted state educators and entrepreneurs have spoken highly of the program's ability to spur economic growth medical, technological, agricultural, educational, childcare and other fields.

• Swanson: Echoing Walz, Swanson also expressed opposition to gridlock and a lack of cooperation between the GOP and DFL, as well as the state Legislature and the state's executive branch—which ultimately doomed the program, as well as bills to address pressing issues like the opioid epidemic, school safety or elder abuse laws. "Stuff isn't getting done because of that," said Swanson, who noted she and her running partner, Rep. Rick Nolan, D-Crosby, plan if elected to sit down with each member of the Legislature to foster cooperation and understanding.