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Minnesota’s New Year’s Resolution

This time of year, many Minnesotans are making New Year’s resolutions, pledging to do better in 2017 by going to the gym more often, spending more time with their kids, and so on. Maybe the State of Minnesota should make New Year’s resolutions, too. If so, here’s a suggestion: Minnesota should resolve that next year, it will take steps to make its economy more competitive. Most Minnesotans think our economy is doing well, but the reality is not so rosy. Between 2000 and 2015, Minnesota ranked only 30th among the states in income growth, 34th in increase in disposable income, and...

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Millennials Voted On the Economy

This Millennial Impact Report survey is interesting, but beware--the sample size is only 350. Still, the findings are fascinating: The organization found that millennials had considered education to be the most important topic during the election through each of three waves of surveying. However, this changed when respondents were surveyed between Nov. 9 and Nov. 14. The survey showed employment and wages were the primary concern for millennial voters. Which means they wised up! The country's slow growth during the liberal Obama years didn't do much damage to middle-aged Americans who already had jobs, and quantitative easing improved their bank accounts. But these...

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Cigarette Smuggling Soars in Minnesota After Big Tax Hike

Cigarette smuggling has soared since Minnesota imposed a $1.60 per pack excise tax increase in 2013, propelling the state to fifth highest for the crime in a new Tax Foundation and Mackinac Center for Public Policy report. The study shows smuggled smokes accounted for more than a third of cigarettes--36 percent--consumed in Minnesota in 2014, leading to an estimated $313 million loss in revenue due to tax evasion and avoidance by so-called border shopping. “Minnesota’s big leap in the ranks of smuggling states is no surprise,” said Michael LaFaive, Mackinac Center Fiscal Policy Director and co-author of the report. “As tax differentials...

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Many Minnesotans to Pay Just Shy of the Highest 2016 Income Tax Rate in the Nation

Minnesota’s income tax rate on top earners moved up to the third highest rate in the nation for tax year 2016 after the expiration of a temporary tax increase in Hawaii. The third highest rate on top earners is bad enough, but there are a great many Minnesotans who pay an income tax rate that is just a hair shy of the highest rate in the nation. That’s because Minnesota starts applying the top rate at a much lower income level than some of the higher tax states.  Minnesota’s top rate for single filers starts at $155,650 and the top rate for...

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Sagging Liquor Profits Force Edina Munis to Compete

Edina's municipal liquor stores used to rake in millions in profits from the city's monopoly on the booze business for years, $1.5 million as recently as 2012. But profits have plummeted ever since competition came to town in the form of a Total Wine mega store that opened in the next door suburb of Bloomington, declining to $650,000 last year. Instead of privatizing the city's liquor stores or cutting city services, Edina city councilors penalized residents by increasing property taxes 7 percent in 2016 to offset the continuing loss of sales. After another  year of stagnant profits, however, City Hall may be...

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Contractors Pressed to Shop Subcontractor Bids as MnDOT Misses Minority Goal Again

A new MnDOT report shows the agency has again failed to reach its goal for minority and women-owned business participation on transportation projects for at least the tenth year in a row. This despite spending an estimated $10 million of taxpayer funds on training and recruitment to pave the way for the federally mandated Disadvantaged Business Enterprise program since 2007. The DBE program requires states to set goals for companies “owned and controlled by socially and economically disadvantaged individuals” for federally-funded MnDOT projects. But the latest numbers indicate DBE-qualified firms landed 8.5 percent of federally funded road construction contracts statewide in fiscal year...

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Will General Mills be the next Minnesota Fortune 500 company lost to a takeover?

General Mills, one of Minnesota’s premiere Fortune 500 companies, made the news this week with renewed speculation that the company is ripe for a takeover.  According to the Star Tribune, the “Brazilian billionaire who helped merge Kraft and Heinz last year could have General Mills in his sights next.” Losing General Mills would, of course, be a substantial blow to Minnesota. The most immediate blow would be felt from the loss of high-paying corporate management jobs that would either be eliminated or moved to the location of the new headquarters.  When AlliedSignal acquired Minneapolis-based Honeywell in 2000, they kept the Honeywell name...

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Uber Drivers: A Preferred Way to Get Around When I Travel and a Great Income and Flexible Job for Many

I was in D.C. last week meeting with colleagues who are focused on labor issues both in their respective states and the U.S. Congress. It was exciting to consider all the bad policies that are going by the wayside (like Obama’s overtime rule) and all the good policies that will now get a fair hearing. I had a few hours on Monday morning before my meetings began. Should I spend the morning responding to emails, or head out to Mount Vernon to commune with George and Martha? Hmm, hard choice…. When I travel I strongly prefer to use Uber to get around,...

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Court Blocks Controversial O.T. Regs Imposed by Executive Order

There goes another one.  Another signature Obama executive order put on hold as effortlessly as it was imposed, further underscoring the fragility of a presidential legacy that could be determined in great measure by the courts. A federal court in Texas this week blocked implementation of a sweeping set of controversial white collar overtime provisions that were set to take effect within days.  Critics called it a "ham-handed attempt to raise wages through regulation" and harmful to the middle class. Meantime, one media outlet noted the irony that the federal judge who rebuffed the Administration got his black collar job as a result of being selected...

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Business friendly policies spur stronger growth in counties across Minnesota’s border

A forthcoming article in American Experiment’s magazine, Thinking Minnesota, will reveal the grass is growing greener on the other side of Minnesota’s border.  For the article, I analyzed job growth in counties on either side of the state’s border and found jobs are growing at a faster pace in counties just outside Minnesota. This comparison adds another strong piece of evidence to show that Minnesota’s tax and regulatory policies stifle growth.  Growth along Minnesota’s border is strongest where taxes and regulations are the least burdensome. Researchers are increasingly comparing economic activity along state borders to help identify how differences in state policy...

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