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Gov. Dayton's budget proposal includes several initiatives to attract and retain businesses.
(Published Jan 28, 2013)
Gov. Dayton included several new or expanded initiatives related to attracting and retaining businesses and jobs in his budget proposal released on Jan. 22.
Full details on the new programs have not yet been released, but some information was included in the governor’s proposed 2014-2015 biennial budget.
Minnesota Investment Fund
The governor is recommending that the Minnesota Investment Fund (MIF) receive $15 million per year for the fiscal year (FY) 2014-2015 biennium. The MIF loan program, which has been in place for many years, is designed to provide financing to create and retain jobs to improve economic vitality for all Minnesota citizens. MIF funds are disbursed to local governments and then subsequently provided as a loan to the business.
According to the Minnesota Department of Employment and Economic Development, the loans are attractive to businesses because they are awarded up front and can be used to offset capital expenditures, often equipment purchases. All MIF projects must meet minimum criteria for private investment, number of jobs created or retained, and wages paid. Some loans are forgiven, depending on the transaction requirements. Recapitalizing MIF with the governor’s recommended funding will allow the state to actively compete for jobs created by expanding manufacturing and high-tech businesses looking to relocate to or expand in Minnesota.
Minnesota Job Creation Fund
The governor recommends the creation and funding of the new Minnesota Job Creation Fund, which is designed to be a statewide job creation incentive program. The budget includes $12.5 million per year in funding for the program. The governor is not proposing any extension of the soon-to-expire Job Opportunity Business Zones (JOBZ) program.
According to the budget documents, this economic development tool will help Minnesota compete for job creation from businesses expanding or locating in the state. This program, in conjunction with the Minnesota Investment Fund, is designed to provide Minnesota with flexible and effective tools to craft incentive packages that would be most appealing based on differing business financial needs.
This new program is described as a performance-based statewide grant program. It was designed to follow incentive program best practices, and would provide financial awards to businesses that meet industry requirements as well as minimum capital investment and job creation thresholds.
Minnesota Global Competitiveness Initiative
The governor also recommends funding for a new Global Competitiveness Initiative to increase exports and foreign direct investment. The budget includes $750,000 per year in funding for the program. According to the budget documents, this program would establish foreign offices in three new markets whereas the Minnesota Trade Office currently only has one foreign location.
The initiative also provides funds for a marketing campaign designed to better communicate the benefits of doing business in Minnesota and an export assistance grant program for small businesses to participate in trade-related activities. These activities equip Minnesota with the tools it needs to be competitive in a global marketplace.
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