Revitalize Minnesota Communities – The Horner-Mulder Community Revitalization Plan
July 2010

Minnesota’s communities are facing tremendous challenges, and among the toughest for many small communities is that young people are leaving their hometowns because there isn’t a future for them. This “brain drain” of young adults moving to more urban areas has left many communities with aging populations, low school enrollments, poor housing and deteriorating public infrastructures. We must replace the “brain drain” with a “brain gain” for Minnesota. Our state cannot afford two Minnesotas; we need healthy, vibrant communities that reach every corner of our state. Hard economic times require practical solutions that are easily understood and easily carried out.

The Horner Community Revitalization Plan
The Horner Community Revitalization Plan provides a balanced approach for state and local investment, planning and support for rebuilding the economic development foundation for Minnesota communities. The plan encompasses issues that range from tax policy, to training, to local decision making. It allows local officials to target those opportunities that best meet the resources of their communities whether it is tourism, manufacturing, agriculture or new green industries. There is not a magic bullet response to revitalizing communities across Minnesota; revitalization requires hard work and strategies that are flexible, innovative and sensitive to the needs and resources of each community.

Minnesota’s economic development efforts must be balanced, flexible and strategically focused to meet the needs of each community. Community revitalization requires building upon the assets found in each region of Minnesota recognizing that each has its challenges, but also that each has its own competitive advantages.

1. Applied research is vital to the growth of new jobs in Minnesota’s community economy.

a. Research – Fund applied research at the University of Minnesota and other higher education institutions as a separate line item in the state budget. Minnesota must become the Knowledge State. Innovations and new technologies that come from the University add value to the entire state. The proposed bioscience corridor in southern Minnesota, the wind/energy research at the University of Minnesota-Morris, the solar research at Minnesota State University-Mankato, the agro-science research at the University of Minnesota-St. Paul are a few examples of Minnesota innovation on the verge of prominence.

b. Investment in Innovation – Investment in innovation requires a state tax system that supports taking new ideas and processes to market by Minnesota companies. The corporate income tax is regressive and must be reduced and eliminated within four years.

2. Government agencies must be supportive and responsive to entrepreneurs through the elimination of red tape and unnecessary bureaucratic road blocks.

a. Sales Tax Exemption for Capital Equipment Investments by Businesses: By exempting businesses from the state sales tax on capital purchases, business will be encouraged to invest in new technology and to upgrade current facilities. This is particularly important to small manufactures who wish to remain competitive at the local, state, national and international levels. This proposal allows a phase out of the JOBZ and Green JOBZ programs, which are bureaucratic and arbitrary in application.

b. Streamlined Regulatory Processes: By eliminating bureaucratic impediments to business expansions, entrepreneurs and developers will be able to get to market more quickly. The speed of decision making has increased exponentially as businesses compete in a global economy. Government must continue to carry out its regulatory and fiduciary responsibilities, but must also accommodate the speed of business by adopting transparent guidelines and requirements for acquiring permits and regulatory approvals. The Horner administration will propose a six-month approval process in which a business can be assured that their application will be processed and a decision made.

3. The MnSCU two-year technical training schools must play a key role in workforce readiness as these schools are regionally situated and best positioned for agility and responsiveness with customized training needs, refresher training courses, and professional licensing requirements.

a. Coordinated Vocational Education and Training Program (CVETP):  A vital element of a solid economic development plan is to coordinate state-supported education and training programs that meet the needs of expanding businesses.  Modeled after the Iowa Industrial New Jobs Training Program, CVETP is financed through bonds sold by the state or local governments. It also supports retraining of individuals to meet the challenges of changing business economy. Depending on wages paid, the supported business diverts a percentage of state withholding taxes generated by the new jobs to the state or local government to retire the bonds. The training program is made available to the company at no cost since the bonds are retired with dollars that otherwise would have been paid to the state as withholding taxes. In addition to increasing worker productivity and company profitability through structured training activities, businesses participating in the program are eligible for reimbursement of costs associated with on-the-job training.

b. Support Minnesota Trades and Vocational Program (MTVD): Upon high school graduation, Minnesota’s young adults must be prepared to succeed regardless of whether they attend a university, community college or technical training environment. Minnesota’s high schools and technical colleges must coordinate curriculum to ensure that Minnesota’s secondary school system supports the needs of those students who wish to pursue vocational careers.

4. The state must support public infrastructures that include both broadband and transportation assets.

a. High Speed Broadband Build Out:  Expand the state broadband backbone to ensure that each Minnesota community, business and citizen has access to the next generation’s super highway. The plan recommends, in partnership with the private sector, using state bonding authority to reach the access goal. It is particularly important that community schools have high speed access to Minnesota’s university systems.

b. Transportation – Greater Minnesota needs a strong transportation network that can move product to markets and support worker access to jobs. This includes well-maintained highways; revitalized freight and passenger rail (starting with a Rochester to Twin Cities high speed corridor), and inter- and intra-city transit options. The Horner administration will propose $100 million of state bonding for the Local Bridge Improvement Program.

5. Collaboration is the key for competing nationally and internationally. State entities must coordinate their assistance with and through regional organizations. Workforce and economic development organizations, business and labor organizations, Minnesota Initiative Funds, the University systems, and Minnesota Foundations must collaborate with the state in building a strategic, coordinated economic development plan. As a state we must recognize that for many communities adding one job to a local manufacturer or the construction of a new home, which keeps local carpenters, plumbers and electricians working, is economic development. Minnesota’s economic strategies must maintain a focus on the creation of well paying, career opportunities. At the same time, economic strategies for all of Minnesota need to emphasize well-paying, career jobs

a. Redesign the Department of Employment and Economic Development (DEED): DEED is a valuable tool that plays an integral role in Minnesota’s economic development strategies. But like all organizations, DEED must be redesigned to ensure timelier, more responsive services to entrepreneurs, communities and individuals. Programs must be prioritized and programs with poor returns of investment must be eliminated. Expanding a business and creating new, high paying jobs in Minnesota should be simple to do.

b. Redeploy Economic Development Resources.  Encourage Economic Development Association of Minnesota / Minnesota Association of Professional County Economic Development / University of Minnesota Extension / Positively Minnesota and similar entities to work together to reduce redundancy and focus on a unified front for community economic development policy.  The Horner Administration will create a point of the spear support structure for working with business developers and entrepreneurs.