Incentives would help economic development in FFPublished 10:53am Wednesday, April 3, 2013
Four economic development bills could impact the local the economy through job training tax credits, increasing the Greater Minnesota Angel Investment Credit, an internship tax credit for businesses and an easier-to-manage JOBZ program.
All the bills are in committees at the Minnesota Legislature. The bills are supported by the Coalition of Greater Minnesota Cities and Greater Minnesota Economic Development Parternship. The Fergus Falls City Council approved a resolution of support for the bills at its meeting Monday.
The bills include:
• New employee job training program tax credit —This program would provide employers with money for flexible training programs. One of the most common problems facing greater Minnesota areas like Otter Tail County is the lack of a well-trained workforce to fill jobs that are available. While there’s several opportunities for training across the state, the biggest issue people face is an inability to pay for it.
The job training tax credit would reduce the cost for both employees and employers to provide funding for jobs that meet qualifications. The tax credit program cost is $10 million per year and does not apply to temporary work, recalled workers or replacement workers.
• Expansion of the Greater Minnesota Angel Investment Credit — This bill would increase the angel investment credit from 25 percent to 50 percent for investments in qualified businesses that have their headquarters and more than half of their employees and payroll in greater Minnesota.
The investment credit was passed in 2010 with the goal of attracting private investment to start up companies across the state. However, the $60 millions over five years for the credit is not meeting the needs of the state. In 2012, 95 percent of the qualifying investments under this program were made within the seven-county metropolitan area.
Part of the problem is that the funds are usually gone six months into the year, said Harold Stanislawski, executive director of the Fergus Falls Economic Improvement Commission. This would give companies incentive to invest in greater Minnesota.
-Internship tax credit program
It’s more difficult for businesses outside the Twin Cities metro area to attract and also retain young workers. Sometimes, it’s just a case of students not realizing the opportunities that are available. This internship tax credit program creates initiatives that develop public and private partnerships to help attract talent to greater Minnesota.
Businesses would be allowed to “test drive” potential employees and help train them for the future. For students, they can receive critical learning opportunities, educational credit and get their foot in the door with a local business.
Finding a job today is all about relationships and an internship can give you your first window into building those relationships, Stanislawski said.
“I think it’s a really good program for Fergus Falls,” Stanislawski said. “As we try to introduce younger people into jobs that we may have openings in the future.”
The local manufacturers, utilities and other businesses would be able to use this program, he said.
The program would pay 40 percent of an intern’s wages up to $4,000. The $11 million for the program in a biennium would provide for 2,400 internships lasting 24 weeks.
-JOBZ replacement proposal
JOBZ has been used by businesses, but there are concerns with the program including unmet goals resulting in the repayment of credits, businesses moving from city to city and excessive reporting.
That’s why there’s the simpler, easier to manage replacement program with three benefits the Department of Employment and Economic Development can choose from. They include: Jobs tax credit, sales tax exemption and statewide business property tax exemption.
The new JOBZ program would also have a lower wage threshold to match the economic reality in greater Minnesota and have greater flexibility.