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Governor Pawlenty proposes extending JOBZ benefits for 10 full years
The governor has asked the Legislature to revise the JOBZ law to grant new companies a full 10 years of tax-free benefits, no matter when they enter the program. As JOBZ currently is implemented, a company that signed a business subsidy agreement in January 2004 – the first effective year of the program – receives tax incentives for 12 years. However, a company that entered the program in January 2007 receives tax breaks for nine years, the maximum time allowable before the program expires on Dec. 31, 2015. Companies that sign up for the program later will have even fewer years, greatly diminishing the incentive value of the program as the years go on. To keep the value constant, Governor Pawlenty wants JOBZ benefits to be made available for a full 10 years to any qualifying business that signs on for the incentives anytime prior to the program’s sunset. Now in its fourth year, JOBZ has helped stimulate nearly 300 startups, expansions or relocations, creating nearly 4,000 jobs that pay an average wage of $11.37 per hour, and attracting $600 million in capital investment.
“It’s crucial that we sustain that energy and investment in our communities. To do that, we need to change the JOBZ program so that the incentive value stays strong and doesn’t erode year after year.” | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Redwood Falls discovers that JOBZ offers power payoffs and rewardsGood jobs, paychecks, and hundreds of millions of dollars in capital investment throughout Greater Minnesota are easily quantified public benefits of the JOBZ program. But the people of Redwood Falls will tell you that there are other powerful payoffs – like a renewed sense of enthusiasm and hope, a more close-knit of community, and a shared sense of responsibility for making good things happen. In the summer of 2006, Redwood Falls was left reeling after Artesyn Technologies, a subsidiary of Emerson Electric, the city’s largest employer, announced that it would close at the end of the year, leaving 240 people jobless and with few prospects for re-employment. “It was a very emotional time in the community,” says Mayor Sara Triplett. “We all know these people. They’re our friends. Our neighbors. Our relatives. I walked up and down the streets of Redwood Falls that day. There were tears.”
Knowing there was no time to waste, community leaders went to work immediately to find a new tenant for the 98,000 square-foot plant that would soon be idle. Within days they were making a presentation to officials at Daktronics, a Brookings, S.D.-based company that was having difficulty finding an adequate number of workers with the technical skills they required. “We knew that we had the skilled workforce they needed,” says Julie Rath, an economic development specialist with the Redwood Area Development Corporation. “So we went after them.” And the pitch was successful. One of the world’s largest suppliers of, electronic scoreboards, computer-programmable displays, large screen video displays, sports venue sound systems, and control systems, Daktronics will manufacture its line of Galaxy electronic message centers in the Redwood Falls facility. Initially, Daktronics will hire about 100 people, but company officials anticipate annual employment growth of 20 percent or more. The company expects Galaxy displays to begin coming off the production line by March. Meanwhile, others worked on different fronts. Along with the larger plant shutdown, a division of Emerson Electric known as Astec-Artesyn was also slated to close. But employee Robin Stegner convinced Emerson officials to consider spinning off the division and selling it. The company agreed and Stegner found a buyer in Montevideo businessman Kevin Wald. Renamed RVI, Inc., (which stands for Rural Values and Integrity), the company provides power supply repair and upgrades for a wide variety of communications, computing and networking companies. CEO Wald says he will hire 40 people initially, but he anticipates gradual increases in workforce as the company takes off.
Wald, who used JOBZ incentives to open a welding company in Redwood Falls two years ago, says the program was pivotal to his decisions to open businesses in the community. “It kind of helps glue the package together,” he says. “It gives us that little extra edge. It’s been a very important factor in everything we’ve done.” All told, more than 140 people slated to lose their jobs in the plant closure have new employers thanks to a major company expansion and another company spin-off made possible in part by the JOBZ program. And there’s one intangible benefit that will pay even greater dividends in the future: “I think this has been huge for Redwood Falls,” says Stegner. “I think that we’ve really learned to work together as a community to do economic development. We’ve learned that it’s everybody’s job. There’s optimism in the community that we haven’t felt in a long time.”
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Department of Revenue Answers JOBZ QuestionsThe Minnesota Department of Revenue has posted a JOBZ Bulletin that discusses many questions that are frequently asked by subzone administrators and business owners. It’s a handy reference that covers all the basics. Take a look: Click on the “JOBZ Bulletin” link near the middle of the page.
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Help Keep JOBZ Benefits in Your Community
Who Should Hear Your Story? Simple: Every newspaper and magazine editor, radio and television news director in your area. And don’t forget Web sites – everything from media outlets to professional associations to local government advocacy groups to the official web sites of cities and counties.
JOBZ Information & MarketingMedia Outreach Guide for Community and Business Leaders How to Tell Your StoryThe most powerful advocacy starts with a powerful story. It’s up to you to tell the JOBZ success stories in your community and region. Some things to consider as you begin:
Useful Facts in Telling Your StorySome basic information about the statewide impact of the JOBZ program may help as you develop your own story. Here are some important details. To date JOBZ has produced:
The vast majority (72 percent) of new jobs are in the manufacturing and construction industries, followed by professional, technical and scientific (7 percent); wholesale trade (6 percent); services (4 percent); warehouse and transportation (3 percent); finance, insurance and administration (3 percent) and other (5 percent). How important were JOBZ incentives in company decisions to start-up, expand or relocate? Here are some interesting insights:
Full-time Jobs Created by Region, 2004 and 2005
Actual JOBZ Capital Investment as of Feb 2, 2007
Useful Themes in Telling Your Story
JOBZ Key ContactsFor most JOBZ-related questions, you’ll get the fastest and most accurate responses if you direct your general questions first to your local sub-zone administrator or one of DEED’s business marketing representatives, all of whom have contact information listed on the JOBZ web page: http://www.deed.state.mn.us/bizdev/PDFs/jobzAdmSupCont.pdf In addition, five DEED technical assistance representatives are ready to answer any purely technical questions you might have about any of the 10 zones. To reach the appropriate technical assistance representative for your zone, check the following list:
Positively Southern Minnesota JOBZ Growth Corridor and Southwest Regional JOBZ and Southern Minnesota JOBZ and West Central Minnesota JOBZ and For MNPRO and Community Profiles For business subsidy policies, public hearings, annual reporting For program-related information about specific businesses For tax and revenue information
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Minnesota JOBZones
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JOBZ TrackerThe number of completed JOBZ deals stands at 291 projects with commitments to create 4,361 new jobs. Businesses also promise to retain 9,144 existing jobs and to make $600 million in new capital investments, according to data from the signed business subsidy agreements. |
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In his two-year budget proposal, Governor Tim Pawlenty is seeking an important change to the JOBZ program that will ensure it remains a powerful tool for stimulating economic growth in Greater Minnesota.
“JOBZ is helping write a tremendous success story in Greater Minnesota. It shows just what can take place when we get excessive taxation out of the way and allow the energy and innovation of Minnesotans to go to work,” Governor Pawlenty said.
The economic impact of the impending job losses would have been far-reaching in the community of 5,500 residents where many households would have lost two jobs to the layoffs, says Triplett. “The hospital, the clinic, the library, the drugstore – every business in town would have been affected,” she says. “There would have been houses for sale all over town.”
“I’ve learned to appreciate the value of rural Minnesota,” says Wald, an aerospace engineer turned entrepreneur who owns a number of companies that employ 180 people in rural Minnesota communities. “The bonds are strong here. The employees need this to work. The employers need this to work. And the communities need this to work.”
Your active support is needed to ensure passage off the Governor’s proposed extension of JOBZ benefits. If the program has been successful in your community, your story needs to be told!
As you develop your story, here are some themes you may want to consider:
Northwest Land of the Dancing Sky JOBZ and 
For information about Prevailing Wage requirements and compliance