House Ways and Means Committee [Source] Translate

The Ways and Means Committee meeting began with the chair emphasizing the importance of maintaining decorum and outlined guidelines to ensure a respectful environment. A quorum was acknowledged, and the minutes from the previous meeting were unanimously approved. New committee members were introduced, including Cedric Frazier as co-chair and Representative Scott as vice chair. Frazier expressed eagerness to collaborate on addressing challenges facing Minnesota. The meeting featured two presentations on Minnesota's economy ahead of the February budget forecast. Jennifer Byers and Sean O'Neill from the Minnesota Chamber Foundation presented the 2026 Business Benchmarks Report, highlighting the state's economic strengths and challenges. They noted Minnesota's above-average prosperity but pointed out a slowdown in economic growth, with GDP per capita growth ranking 38th among states and labor force growth at just 0.2% annually. Key areas for improvement included increasing overall economic growth, enhancing labor force growth, and addressing domestic migration challenges, as Minnesota has faced a net loss of population due to migration for 20 of the past 25 years. Concerns were raised about Minnesota's business climate, with the state ranked 44th in tax competitiveness, which deters investment. High operating costs, including taxes and healthcare, along with regulatory complexity, were identified as significant barriers to business growth. The cost of living and housing availability were also discussed, with Minnesota ranking 31st in affordability and 48th in new housing starts. Opportunities for growth were identified in sectors like AI, advanced manufacturing, clean tech, and agriculture, with an increase in new business formation since 2020. Representatives discussed the impact of regulatory changes, such as paid family medical leave, on workforce dynamics and recruitment challenges. The need for property tax relief and strategies to improve the business environment was emphasized. The meeting also addressed the importance of tracking wealth migration and the impact of state policies on businesses. A case study highlighted the costs faced by a midsize manufacturer due to new labor mandates. The workforce participation rate was noted to be high, but there were concerns about the affordability of higher education and job growth being concentrated in the healthcare sector. The discussion included the impact of tariffs and trade policies on businesses, particularly in agriculture and manufacturing, and acknowledged the contributions of immigration to the economy. The meeting concluded with a presentation on per capita GDP, indicating that Minnesota's economic performance has lagged behind the national average since 2014, with stagnation in human capital and physical capital growth. The need for policies to attract skilled workers and boost investment in capital-intensive sectors was emphasized. Concerns about the housing shortage and the importance of cultural amenities in attracting higher-skilled workers were also discussed. The meeting concluded with a reflection on Minnesota's fiscal policies and the importance of maintaining a competitive edge in attracting and retaining residents. The next meeting will focus on an upcoming forecast.