Rep. Andy Smith and the school of hard knocks

This week the state House of Representatives passed a new employer mandate for paid family and medical leave. HF 2 will impose a new tax on employers to fund paid leave for up to 18 weeks per year for qualifying employees.

One of the most vocal supporters of the bill is first-term Rep. Andy Smith (DFL-Rochester), who touted his business acumen as he downplayed the costs of the new mandate on small businesses. He told House members during a debate that he offered “unlimited paid vacation and sick time” at his two businesses.

It turns out that, at the time he said it, he was down to just one business.

The House’s official bio of Smith lists his occupation as “business owner.” In his campaign bio, he describes himself as a small-business owner,

Andy moved to Rochester with his wife Anna to start his dream business: an independent movie theater and coffee shop. That vision led to Gray Duck Theater & Coffeehouse, a business that not only survived the pandemic but thrived, thanks to community support. Gray Duck was able to add several employees while operating responsibly during the ongoing COVID-19 pandemic, and every employee at Gray Duck makes at least $15/hr. In 2021, Andy and Anna started Garden Party Books, a used bookstore that’s located right next door to Gray Duck. Both businesses are motivated not by maximizing profits, but by building real community through coffee, books, and movies.

In hindsight, “thrived” seems like a bit of an exaggeration. As KAAL-TV reported last month, Smith filed for Chapter 7 bankruptcy for the theater/coffeehouse,

According to court documents, Smith’s total liabilities owed to eight creditors are approximately $204,000. Smith’s wife Anna, who owns and operates Garden Party Books and Zumbro Literary Society, was not included in the bankruptcy filing.

Indeed, according to corporate filings, Andy, a Los Angeles-native, is the only name associated with his Gray Duck Entertainment. His wife is the only name associated with the bookstore, despite both companies sharing a common corporate address.

Smith’s creditors may wish that he’d focused more on maximizing profits on his side of the block.

It appears that AlphaNews was the first outlet to report on the bankruptcy filing, which was made back in late February.

His 2022 political campaign fundraising effort was a modest affair, raising and spending a little more than $21,000 in winning his state house seat by a wide 64-36 margin. He was even able to forward $5,000 of that amount to the DFL House Caucus a month before the election. Smith received more than $4,000 in state (taxpayer) subsidies for his campaign.

Smith’s hometown newspaper, the Rochester Post Bulletin also reported on the bankruptcy of his Gray Duck Theater, The Post Bulletin reports,

Smith noted politicians more illustrious than him have sought bankruptcy protection. Abraham Lincoln, whose portrait hangs above the speaker’s chair in the state House chamber, declared bankruptcy. So did Thomas Jefferson. Donald Trump filed for corporate bankruptcy at least four times.

Such top-tier company. The Post Bulletin notes that the theater has already reopened, under a new name and new ownership.

Smith’s campaign finance reports list a one-time $400 expense for rental of his own theater. Smith himself donated $700 in cash to his campaign.

The Post-Bulletin notes that Smith is only a part-owner of the bookstore. In a later opinion piece endorsing the paid family leave program, in the Post Bulletin, Smith admits to some personal business difficulties,

I am a small business owner. I have known the triumph of a dream becoming a reality; of turning a passion into a paycheck. I have also felt the deep devastation of closing a business; of seeing a dream dashed to pieces on the shoals of financial hardship.

His experience in bankruptcy has left him none the wiser. The lessons of the school of hard knock aren’t always learned.