(00:00:00) Don W. Larson's long suit is intact. That's how Bill Beck staff writer for the Duluth hero began his front-page story on Larson speech at a recent Minnesota dialogue breakfast sponsored by the College of st. Scholastica later. The Duluth newspaper account says this along the way the 51 year old former business editor of the st. Paul Pioneer Press and dispatch took a verbal meat ax to most all of the Sacred cows in the business labor and political Community. Well judge for yourself here. Is that speech as delivered by corporate reports, Don Larson to about 150 Duluth businessmen. I want to talk to you today briefly about a (00:00:43) subject that I feel very keenly about the serious problems that I feel confront all business in Minnesota today. I've been harping on this subject for years and I've established a bit of a reputation of being a critic but I'm not I'm one of the biggest fans of business and Minnesota that you will find my concern is I want to see that the business community in this state is kept as viable it is has been in the (00:01:19) past and I see an awful lot of signs to show (00:01:23) that it's deteriorating and I think that something has to be done before it gets too late in researching my book. (00:01:35) I was rather (00:01:36) amazed to discover just how viable business in Minnesota really is. A lot of people don't realize that we've got (00:01:47) more (00:01:47) large companies in Minnesota on a per capita basis than any state in the country with the exception of Of New York and Connecticut. There are 25 corporations headquartered in Minnesota that are in the billion-dollar classification with sales exceeding a billion or assets of more than a billion dollars. And that's a lot of money and that's a big big company and to have (00:02:13) 24 of them headquartered in (00:02:15) a backwoods state is really a phenomenal case and it isn't just big companies also on a per capita basis of all corporations over ten million dollars and that includes an awful number of them. There are more than in Minnesota than in any other state and I would suspect that might be true tool with the real small businesses all I've seen no studies done on that but we do have more than a hundred thousand small businesses in Minnesota. (00:02:48) So there's no question (00:02:50) when opponents of the argument that I Say that we've got a lot going for us. They are correct. We do have something very unusual in Minnesota's as far as business, but we're losing an awful lot of business in Minnesota and we're not getting The Replacements. I don't know if many of you realize that we've already lost half dozen billion-dollar corporations over the years for a variety of reasons Sears Roebuck was founded and started in Minnesota and and moved early in its history. The Greyhound Corporation was started right up in this area at Hibbing is the massabi transportation company and is now located down in Phoenix (00:03:41) the (00:03:41) Weyerhaeuser company that I'm sure all of you are familiar with got its it start and Northern Minnesota spent almost all of its early years and mature years and, Minnesota. For moving out to state of Washington Archer Daniels Midland Gould company a couple other billion dollar corporations. We're here all of their existence until just very recently and just the last few months. We've lost Gamal skog Mo now to Wix Corporation out in San Diego, they purchased gambled and moving the headquarters to San Diego investors. Diversified Syndicate is no longer a Minnesota own business a firm in New York. Allegheny is purchased. It munsingwear is in the process of being purchased at least a good share of it by some Japanese concerns Burlington Northern just last week indicated that they're going to form a holding company and although it hasn't been announced yet. The holding company is going to be based in Well, that'll be the first (00:04:56) step of a (00:04:58) progression of moving giant railroad like this out of Minnesota. These are things that are bound to to happen Corporation as much like a human being it has a birth and growth and a death and you can't prevent companies from disappearing through Acquisitions or bankruptcies or any number of ways. They are going to disappear from our lives somewhere along the line. The challenge is to get new growing companies to succeed to replace those that do leave us. (00:05:38) We've lost (00:05:39) dozens of middle-sized companies in Minnesota and the last few years give you the examples of just a few. I'm sure you're familiar with most of them Northrop King Horner Waldorf. In giant data 100 Brown Bigelow hams (00:05:58) Brewing Chung King Polaris all were (00:06:02) Minnesota headquartered companies at one time. And now most of these are parts of other companies. Some of them are still have facilities in Minnesota of some of moved out completely, but they're not a headquartered company in, Minnesota anymore. We've lost a lot of companies most of them of course smaller ones through the bankruptcy route, but that's another inevitable thing that will happen. The Minnesota woolens here in Duluth Watkins. We're in the process now of possibly losing Arctic Enterprise. I see Toro is having serious trouble. They just fired their president this morning and and a half dozen other people the chairman might very likely move on to Dartmouth is the president of the company and Toro could vary conceivably be a non-existent company in another year or two. If something doesn't happen. These are (00:07:04) things that are bound to occur. (00:07:07) Well we've got to do is to have some stimulus in Minnesota to encourage growth of our smaller companies so that they can be in a position to move in to take over. This is where our danger area lies. We're not getting Replacements and the companies that are headquartered in Minnesota simply are not expanding in the state. They're going into other states for their expansion because of adverse business climate in, Minnesota. A year ago or so. I tried to (00:07:43) track down the number of Minnesota headquartered (00:07:47) companies that have put up expansion plants in other states and I was able to track down a hundred and thirty three instances in the last 10 years of manufacturing firms headquartered here who put up plants and other states many of which could have been constructed in Minnesota Head the climate been a little better for that instead. They went to South Dakota and Texas and Iowa and Wisconsin places that not too far from this Market, but that had more attractions to the company moved out of state. The best example that I can find is the 3M company that put up 13 manufacturing facilities in the last ten years and not one of them has been in, Minnesota. Every Community wants a 3M Plant. It's just a great Boon. They usually put up a brand new building and right off the bat will hire three four hundred people. The great court has a corporate citizen for a community have so there's a lot of (00:08:56) people that would like to have a 3M plan and 3M (00:08:59) officials have told me that at least half of those plants would have been right here in Minnesota if the tax structure and the state was a little more favorable, but they have to go where the economy's dictate that they go and they're there are loyal corporate citizen to a degree but loyalty cannot come first over the the profit motive that they have to operate on. Why do we have such a bad business climate in Minnesota? I've interviewed an awful lot of businessmen to get their views. So this is not just my own observation, but it's an accumulation of thoughts from a lot of business people in the state on a priority basis. This is what's forcing business out of Minnesota. Number one a workers compensation law that is ridiculous. Number two and unemployment compensation system. That is one of the worst. If not the worst in the entire United States to personal income tax, which a lot of people don't feel as a business tax, but it really is our personal income tax in Minnesota is so high that it causes difficulty and Getting people to move here to keeping them. And of course the costs of this High personal income tax has to be borne by the corporations themselves. They merely have to increase an individual's wages to cover the state's extraordinarily High state income tax and that this is especially true and those areas over 25,000 a year you get into the top income brackets in Minnesota and we got a 16% state income tax on top of a very high federal income tax and that gets to be a discouraging Factor when it comes to where to locate a business (00:11:12) the fourth area (00:11:13) that you hear an awful lot about as our corporate income tax of 12% Which on a percentage basis is the highest in the country. Now, we have a complicated three-factor formula in Minnesota. So you're bigger companies don't suffer. Is much corporate income tax but for a smaller company doing all of its business in Minnesota and making a good profit. That's the type of company that is penalized with this very high corporate income tax. This is the type of company that we want to grow to replace those that are leaving and they're the ones that suffered the brunt of this. The fifth reason is some very excessive state government regulations. We have the stiffest OSHA rules and pollution control rules of about any state around and these regulations that are not competitive with other states puts us in an unattractive position when it comes to a company making a decision as to where to locate. We have recently seen the rankings of all states and all taxes and Minnesota is you probably aware is now eight in the country. But this is misleading when you look at our sales tax and our property tax and discover that were down 23rd 24th of all states in those two areas and then see that we rate the overall you've got to feel that the important business taxes the corporate income tax are the personal income tax and and the others put put us up as far as a business right to number one are very close to that because of our sales and property tax being lower than average that must mean that on the taxes that are important to a business were right up there at the very top of the list. I want to give you a couple examples of what happens as a result of these very high taxes that we haven't against business. There's a small Manufacturing Company in st. Paul called narrow systems engineering they were fortunate to land a 45 million dollar contract few months ago, which required that they had to put up a big plant and start producing shelters to test jet engines. They're located in industrial park in st. Paul and they wanted to put up a facility right near their headquarters, but they checked around and did some investigation ended up putting this big plant hiring a couple hundred workers down in Crockett, Texas. I call the president of the company and ask him for some specific as to why they picked Texas over Minnesota and this is a small company. Year before they had seven and a half million dollars in sales in the made a profit of 250 thousand dollars. So this is a big contract form. It means a lot and he said if everything else had been equal just the savings and workers compensation alone amounted to more than a million dollars in payroll costs by locating and Minnesota's against Texas and for company only made a quarter of a million dollars a million dollar savings was just too much of a factor not to move to Texas even though they did want to stay in Minnesota. And he added that a everything else wasn't equal. There were a lot of other factors too, but it was just out of their hands as to where to locate. (00:15:04) Talk to a (00:15:05) president of a company called TCI in Benson. They put up a manufacturing plant in Yankton South Dakota. And he said that they very much wanted to be in Minnesota. But just the difference in payroll costs because of the taxes that we're talking about meant that they could have a two million dollar plant in South Dakota completely paid for over a period of time just from the Savings in taxes. And so they felt that even though they wanted to stay in this state. They really had no choice. This has been multiplied Time and Time Again by companies that really are fans of Minnesota would like to build here but don't feel that they can how bad is this workers compensation you people up here are probably more familiar than I am with the type of industries that you have but one of the ones that suffer the most of your your Force products, Bob there's one logging Furman in northern Minnesota that I've been told about by an official of the Minnesota Association of Commerce and Industry that last year had a payroll of $200,000 and this year with the increase in workers comp into effect when it becomes into effect will have workers comp payments of a hundred and sixty thousand dollars on that $200,000 of payroll. This is how bad it can get into a an industry where there's a lot of risk involved and it really makes it almost prohibitive for some companies to operate when you're paying (00:16:44) out almost a dollar (00:16:48) for workers comp for every dollar payroll. It gets to a point where that you've got to suspect that. The system is wrong. We're looking right now and another increase in Minnesota 25 to 30% in the workers compensation rates because the insurance companies claim the can't make it (00:17:08) our unemployment (00:17:09) compensation is another area that is got so expensive and so ridiculous. Then I ran into a president of a company the other day that said that they hadn't anticipated some layoffs and the word got around the plant and he was visited by the labor chief of the Union has plant said that he had heard there was going to be some layoffs and he wanted to know if they couldn't have the layoffs go through the people with the most seniority and the plant managers to then don't understand you you've been fighting for years at on a seniority basis the layoffs go to the last people hired and he says, yes, but the unemployment compensation is so good now that you make as much money not working as working and (00:17:55) I really ought to go to the people who've (00:17:57) been here the longest and have done the most for the company. (00:18:02) That's how bad our unemployment (00:18:03) compensation is. And these are the things that a discouraging businesses from locating here. (00:18:11) I'll tell you what, it (00:18:12) means as far as the state goes (00:18:15) in Minnesota in the last 10 (00:18:18) years. We've had a net growth in manufacturing jobs of less than one percentage point six seven of 1% growth and Manufacturing payroll in the state and that same period of time Texas has had a growth of 20 and a half percent. And this is the result of the type of a business climate that we have where one state can grow that rapidly in manufacturing jobs (00:18:49) at the expense of another (00:18:50) one. I harp on manufacturing jobs because these are the wealth producing type of jobs were doing well in Minnesota and service jobs and extremely well on government jobs. There's a lot of increases in those areas. (00:19:05) But the manufacturing jobs that really bring (00:19:08) income into a state (00:19:11) we have been on a plateau for more than 10 (00:19:14) years, and I'm afraid it's getting worse. (00:19:19) Now what can be done about improving (00:19:23) the business climate the first thing we've got to get all of the good guys thinking alike. This is a real (00:19:29) problem. We have an awful lot of businessmen and (00:19:32) business groups who are saying in effect. Let's lower the taxes, but don't cut these things that we're getting from the government because there are really good for our industry. And and we want to keep those. This is the thing that's driving in his (00:19:49) down more than the AFL-CIO and a lot of other (00:19:53) groups is business itself and their self-interest. They're (00:19:57) saying that we want Cuts as long as it doesn't affect us. We've got to (00:20:02) start thinking on the basis that if we're (00:20:04) going to have lower taxes. We've got to have fewer services and that's going to hurt all of us (00:20:10) including my industry and my company and myself and if we don't adopt that attitude and get convinced the All going to be hurt. We'll never get the job done. I'm sitting on a business development group right now. That is analyzing the results of some various tasks force that the governor has asked put together different industry sitting down deciding where they're at and what they need and where to go from here and our group got the reports just a few days ago from a task force on tourism Forest Products and Mining all industries that affect you people up here at Duluth. It was appalling to me to see them (00:20:55) correctly identify the (00:20:57) problems that they have and then to come back and say the solution is (00:21:02) more help from the (00:21:03) government. We got to have a bigger budget from the government for tourism. We've got to have this and that for the forest industry and the way of Grants and (00:21:14) if they could only arrive at a (00:21:17) Solution that didn't mean more taxpayers dollars. I think we would be further ahead. They came right out and said reduce these taxes (00:21:28) and start with us by cutting out (00:21:30) this subsidy. We would then have a start on the solution. But as (00:21:35) long as all of us have (00:21:36) our self interest at heart it's going to be tough to to accomplish anything (00:21:45) we have to have (00:21:46) groups in the state representing business that are (00:21:50) more forceful (00:21:51) and we have we've got a Minnesota Business Partnership headquartered in the Twin Cities made up of chief executive officers of the 50 biggest companies and they've been in and around for two years. And as far as I can see they have done anything yet. They're just very timid. They're afraid to get involved where there's going to be any controversy. So the keeps saying we're working behind the scenes. We're working behind the scenes. Don't worry about it. But I don't think they're going to do anything unless they get out and do a little yelling (00:22:22) and take a (00:22:22) little heat and some (00:22:23) criticism. They're not going to accomplish anything the same feeling about the (00:22:27) Minnesota Association of Commerce and Industry. A lot of the Chamber of Commerce groups. They mean well, but they've got to be unafraid of the criticism that they're going to get by speaking out. (00:22:41) Even our Republican governor who I think (00:22:43) has done some good things is entirely too timid. He must be worried about their re-election because there are an awful lot of things that he could be more forceful on he's facing a financial crisis of the billion dollar shortfall in the next two years and he comes up with the budget that really doesn't cut out an awful lot of services. He has some funny money games trying to defer lot of (00:23:11) expenses on to a future biennium and doing a lot of things that really is. (00:23:17) An attacking the core of the problem because he knows that that if he Advocates cutting a tremendous number of services his political career is going to be hurt we need somebody in there that says I don't really (00:23:30) care if I get elected or not. I'm going (00:23:32) to do whatever I can to get these reductions into effect and we don't really have that right now. (00:23:40) We've got (00:23:41) convinced ourselves that some of the very good things that we have in Minnesota can continue to be good. Even (00:23:48) at smaller budgets everybody that I (00:23:51) hear says, you know, let's not cut our educational system. We've got a great one in Minnesota and there's no question that we do have and so they say let's not tamper with (00:24:03) those budgets. (00:24:04) But if you look into the Educational Systems, you will see things that really aren't being done to improve education. The things are being done. I think to improve The welfare of Educators and the legislators who are (00:24:21) trying to establish a reputation (00:24:23) in that area. I was really disappointed the other data to run across the situation that I didn't even know existed a law that was (00:24:30) passed in 1978 that said all (00:24:36) private school students in Minnesota have to have the same services for chemical dependency that public schools have however (00:24:48) in the same bill that says that those from the public schools that are offering those Services (00:24:53) can't go into the private school buildings something to do with the separation of church and (00:24:58) state I guess anyway, they so you have a catch-22 system there st. Paul what they've done is they went out and bought (00:25:06) three great big campers (00:25:08) and they took the insides out and set a classroom structure in there and I pull up with these many thousands of dollar (00:25:15) Vehicles into private school. A lot and have two or three kids (00:25:19) come out and sit in the (00:25:20) camper getting this chemical dependency counseling (00:25:24) at a cost of $50 per (00:25:26) student throughout the state and we've got the best chemical dependency counseling facilities in Minnesota that you find in any state. We don't really need the public schools to get involved in that area, (00:25:39) but they're forced to by state law. We have a University of Minnesota just came out this week with a slick (00:25:45) publication on their science department at Cost something like sixty thousand dollars to put out. They're not (00:25:50) satisfied with the all traditional research paper that they put out they have to now have a magazine that will rival the best on the (00:25:58) newsstands the end they say, well this isn't State money. This (00:26:02) comes from a Federal grant. So you don't have to worry about it. Then I realize that the federal money comes from the state on a we don't get back. They only get BAC 85 cents of every dollar that we send the federal government. So it really is costing us more. I can give you a dozen examples. Apple's of what? I consider waste but (00:26:20) we've got to (00:26:22) attack it firmly if we're going to accomplish anything. We have a lot going for us in Minnesota. If it weren't for this tax situation, (00:26:30) we have excellent labor force the best in the country. We've got a very high (00:26:35) quality of life you'd look at any of the ratings around and I always will have Minnesota right up there as a state. That's a great place to live. We've got a great cultural and recreational facilities (00:26:49) Superior transportation system (00:26:54) energy costs there that aren't as high as a lot of other states a low crime rate. We've just got everything going (00:27:01) for us here to attract business if we could only get (00:27:04) our tax structure down so that it didn't act as a deterrent everything else that we've got going for us. Thank you very much. Corporate report magazine senior editor Don Larson who then turn to questions from the audience of Duluth businessmen. He was asked what percentage of their total business minnesota-based firms actually conduct in the state. I'm not sure if I fully understand the question but your real big companies like General Mills and Control Data and 3M of their total business only about 2% is done in Minnesota because they are international type of companies and the amount of international business and all those companies (00:27:53) varies terrifically, (00:27:55) but some of them are up as high as 30 40 percent of their total dollars. But it is very very valuable to have the headquarters in (00:28:04) Minnesota because of the (00:28:05) fact that the headquarter staff is always is large but you have the quality or the type of people and a headquarter staff that we all want that this is one of the things that appalls me what we have in Minnesota is the situation (00:28:22) where were discouraging high-income people from living here and doing everything possible to encourage low-income people from living here. (00:28:30) And you know, I can be called a bigot or anything else you want to say, but I think as far as the the benefit to the state goes I would would love to see company presidents and airline pilots and that type of an individual being my neighbor. Those are the type of people that I guess I would like to see move into Minnesota and you have a situation with two major Airlines based here and that and tax And such then most of their pilots live in Florida or Montana or Texas or someplace in commute up to the Twin Cities because they're commuting costs are low, but when you're making a hundred thousand dollars a year and you got to pay 17 percent income tax. It doesn't take much for them to decide. They'll move to a state where they pay no state income (00:29:19) tax. So we've lost them as a citizen (00:29:22) and I think that's a shame a questioner said he disagreed with Larson sentiments unless of course one wanted a completely homogeneous State. No. No, I'm saying that we're going to I agree. That's I'd like to see a mixture. But what we're doing is eliminating one part of the population of Minnesota that we I think all would like to (00:29:45) have were discouraging them from living here. (00:29:49) I certainly wouldn't want to live in a state of only the (00:29:52) elite that (00:29:53) wouldn't be healthy, but we're in no danger of running into (00:29:57) that. Any other (00:30:05) questions member of the audience asked about suggestions that Minnesota's workman's comp problems might be solved by taking the program out of the hands of private insurance companies and putting it in state hands. Yes. I heard a dirty joke the other day along those lines, but I guess I want until it but this solution to a lot of Problems when the legislature is let's take it out of the hands of free enterprise and let's handle it herself. We have so many examples to show that that simply does not work. Then I think it's it's rather ridiculous to consider it. There are states that do have a state-run insurance for workers comp. And as far as I can understand the studies that have been made and just not have been successful. There's no question in my mind that insurance companies are not totally faultless and this workers comp area, but I don't think that that's the solution it's unfortunate that they're not lily-white and and that they're not taking workers comp on the basis of the (00:31:20) fact that we will do (00:31:21) that almost free of charge out of the goodness of our hearts. They want to make a good profit on workers comp and I Begrudge them that but I do think that there there are areas that can be improved and insurance but that certainly is not the Crux of the workers comp problem. I'll tell you where the problem lies. I heard this yesterday on court decision that just came down an (00:31:43) individual in Minnesota working for utility was burned in a (00:31:48) power line accident and got workers compensation. There's no question about the fact that he deserved it and he was injured and everything was cut and dried and it was a typical worker's comp case than one that should have been covered after a year of drawing workers comp rates. He got into a rehabilitation program. And they are training them to become an auto mechanic. And this is one of the faults they make it to point (00:32:15) where you can milk the workers (00:32:16) comp program by merely saying I want to be rehabbed into another area instead of going back to work. You (00:32:21) can go to schooling for (00:32:23) many months. Let's follow us taking auto mechanic courses at some Vo-Tech school and after one classy was driving home and he got into an automobile accident on the way home and got injured had an operation and had his spleen removed. He appealed to workers comp court on the basis that if he hadn't have been burned in this utility accident. He wouldn't have had to go into rehab and if you hadn't gone into rehab he wouldn't have been going to this Vocational School you've admin going to this vocational school. He wouldn't have been on the highway and he wasn't got injured. So therefore it's a worker's comp case and the court just upheld him yesterday and said that the guys right and they're going to give him the award for a lost or (00:33:09) I think it's $100,000 the give it to you if it's your heart or your (00:33:13) spleen and we all know that a spleen hasn't come up with any kind of a function yet in the human body, but we're on our workers comp law. We still giving it the $100,000 treatment. That's what's wrong with our workers comp is where overly liberal and how we run the program. There's nothing wrong with a good worker's comp program and workers who are injured should be compensated, but you can carry it on to the extreme that we have in Minnesota where it just is pathetic a questioner wondered if the conservative tied seeming to sweep America would also be felt in Minnesota. That's a very good question. I see a drift toward the conservative side throughout the United States with the exception of Minnesota. All you have to do is to look at the November election and you can see that throughout (00:34:03) the state there definitely was a (00:34:06) trend to throw the Rascals out and (00:34:09) About 46 of 47 of the states but not in Minnesota. (00:34:14) I'll tell you another thing that I have no (00:34:16) documentation, but I will Express an opinion on the turnout throughout the country in the member election was 50% in Minnesota was over 70 percent. (00:34:29) I think that additional 20% were public employees who decided that what we better do is to get out and vote or we're going to find our budgets trimmed or our jobs lost. So you saw a turnout in Minnesota that was Far higher than the rest of the country which leads me to wonder what would happen in the rest of the country if they had another 20% turned out and and most of those were (00:34:53) public employees. I (00:34:55) don't think Minnesota and Minnesota (00:34:57) people are any different than people in the rest of the country and I think we're just a little (00:35:01) smarter here and they saw the handwriting on the wall, and I don't think Governor cui's budget trimming and October. (00:35:08) Which (00:35:10) was certainly necessary but probably not politically too smart. We had signs here that something was going to happen in (00:35:19) Minnesota. And I think there was a big (00:35:21) turnout a lot of people don't realize that we've already gone beyond the point of no return in one respect in that more than 50% of our citizens in the United States now rely on a government check for their (00:35:36) livelihood. When you you take (00:35:39) in not only all of your public employees (00:35:42) including your armed forces and your Educational Systems that your public education but everybody who is getting a social security check as their main source of (00:35:53) income a pension check from the government along those lines and you add them all up and you got more than 50 percent of your population. You've got a voting Bloc there that's going to make very certain that when they get out to vote. Going to take their own special interests first. So I think this trend to conservatism is something that we should take with a grain of salt. It's starting there are signs, but I'm not so positive that it's as powerful as a lot of people think it is business editor Larson then return to the subject of workmen's compensation rates in the state. When asked to compare Minnesota rates with those in surrounding states, that's the problem with workers comp is that it's a very complicated system with every industry having a different rate depending on the experience that industry is had and claims. I gave you an example of the very worst and (00:36:50) Forest Products are logging Camp the possibilities of getting injury as a (00:36:56) logger are as high as you can get and therefore they have the highest rates and you (00:37:01) take down an office organization where the most dangerous piece of equipment is a typewriter and your rates aren't as (00:37:08) Time but it isn't the rates that's causing the problem in Minnesota. I guess our rates are probably comparable to a lot of other states. But what we have through a Supreme Court ruling in Minnesota is a precedent that says when something comes up on an appeal the liberal interpretation of this should go for the benefit of the worker and in almost every case what has happened is they they do appeal almost all judgments and all of the appeals are granted and so that we're giving a lot more than the law really intended and we're giving it not only in higher rates but in longer terms and in our rehab in our escalator clause and so that a person injured today because of the escalation configure on on getting back three or four times what the rate he is getting at the present and it's the case that Some teeth have to be put into the the law as far as who is going to get Workers Comp. Nobody know the businesses especially aren't saying let's reduce the amount that a legitimate claim should have all are saying is let's eliminate the the abuses and I think there are so many abuses and (00:38:30) workers comp today. (00:38:32) What Wisconsin did and I think as a smart move is that they didn't say that if you (00:38:39) can't prove this is work-related you're getting (00:38:41) zilch what they said is if there's a doubt you'll still get your money, but you'll get it as part of the welfare program and not as part of the workers comp program. We're still going to take care of you if you can't take care of yourself, but we're not going to penalize business because of the fact that it's a gray area. We've got cases in Minnesota where a man jogging to work for his own health broke his leg and got a claim because he was actually in route to work. If I hadn't been for that, he wouldn't have broken his leg. We've had cases where a man has argued with his wife on a Sunday night and had a heart attack and died and it was a worker's comp case because they said that was the job that cause that stress that caused that argument that caused his death and these are the things that we have on workers comp that brings our rates way up. We've got to eliminate the abuses and you have to change the law to say we're not going to take this on a liberal approach. We're going to be very hard-nosed. We'll look at everything and if it definitely isn't legitimate work related case, we're going to let the welfare department take care of this case and nobody is saying let's put the guy out in the cold. We're just saying let's not tax just business for some of these borderline instances Larson was asked to cite a couple of specific things that nearby states have done to promote industry. South Dakota is an example really trying to (00:40:05) get business. (00:40:09) They have no personal income tax at all. And that's that's a big plus for a company going and they have a worker's comp and unemployment comp program. That's about 1/4 of what it is in Minnesota. And those are the areas that are most important. They do something that I'm not totally in favor of but I and I'm not totally against it either and they have tax moratoriums. They (00:40:35) bring businesses in and say you have to (00:40:36) pay any taxes for five (00:40:38) years if you locate here and we'll give you the building and we'll do this and it really hasn't totally fair for the existing businesses in a company. I think state or Community can (00:40:47) go overboard and (00:40:48) what it will do for a business (00:40:50) and I'm not in favor of giving business anything (00:40:52) except a competitive area in which to work. I think that (00:40:57) what we can do for businesses get our taxes down so that (00:41:03) it's just as attractive to (00:41:05) locate here as elsewhere, but as far as As going Hog Wild on everything I think sometimes that's overdone and I would like to see that may be minimized. I'm not totally against industrial revenue bonds and tax increment financing but I think those are areas again where businesses said what can government do for us, you know, help us out here business should help itself. I'd like to see his go back to the (00:41:34) days when there was very (00:41:36) little Reliance on government handouts to run a business and also very little (00:41:42) interference to and in the way of taxes and regulations (00:41:47) certainly not back to the (00:41:49) freewheeling days on the state was was (00:41:52) first started, but at least back so that business can operate without having government as its number one partner. Then at the end of the question and answer session came some of Don Larson's most controversial remarks. He was asked to provide Action to give some specifics on how business people could affect unemployment compensation workers compensation and other business related problems in Minnesota. I think that we all are members of one group or another that we can insist that the group become more forceful and its direction on demanding that things get done as individuals. I guess the best thing that can be (00:42:36) accomplished is letter writing to our (00:42:37) legislators talking it up. Whenever we go any place to express our views if people think we're all satisfied with the way things are nothing is going to be changed. We've got to complain a little louder we've got to get our message heard over and over again and it's something that's not going to be accomplished overnight. It's going to take a long time but we're talking and a long-range terms. It's taken us 10 15 years to get into this. Pip that we're in and it's going to take us 10 15 years to get out of it, but we're not at the bottom of the pit unless we do something things can get worse. I'd hate to see that Minnesota Waits until we no longer our headquarter state but a branch office State like maybe we should have been from the beginning and say well my God, what happened to all of these big companies are headquartered we got to do something let the time to do something as before the harm has become more serious than it is and that's why I'm excited. I'm not going to be as interested in improving what's going on in Minnesota 11, we've lost but we had through our own stupidity. I'd like to see us do something (00:43:53) before the situation becomes critical and I think what we can (00:43:58) the first thing we've got to do is to get those yo-yos out of the legislature. We're not going to educate them what we have on the Your we look at them as 201 dummies who all think alike and take their marching orders from Dave Row of the AFL-CIO. We have six of the 201 of ever been operating a business. Most of those people are professional bureaucrats and former School teachers and they're in there because they make more money as a legislator than they can in any other area and and that's why they're in the legislature and it isn't because they hate business. It's because they don't understand business. They understand politics. They know what it takes to get elected and get reelected and they know that the way to do that is to give people things and they figure we've got to have a dog to kick and that dog really is business because they're so big and impersonal and so they pass laws penalizing business thinking of I've accomplished something here and you don't realize that they're destroying the whole state it's through stupidity and not through any gigantic conspiracy, but business, especially (00:45:08) Business Leaders (00:45:10) have not done much in the legislature their (00:45:13) business executives are very (00:45:15) thin skin. They're afraid of being criticized they love to give orders, but they hate to take it and they don't like to go up in the hill and they're very reluctant to get up there and testify at a senate committee hearing because somebody there might say something that's going to offend them. So they'll send a third vice president up or they'll send a chamber of commerce or Mackey or some other lobbyists up and I don't have a lot of quarrel with those people but their ideas we want to get along and we want to accomplish things through finesse. I think the only finesse that business can use is a is a club right against the side of the head of the legislators and that has to be done by people with stature and I would like to see chief (00:45:59) executive officers of these big (00:46:01) companies go right up to the legislature and tell them what's on their mind and they won't do that. So I guess I disagree Have been on the fact that the only real good lobbyists and Minnesota is the AFL-CIO. They are very effective. They know how to get things done. I think business should take a lesson on how to do that. I would love to see business form a partnership with Dave role because they all have the same things to gain and if they can only get together and say, you know, we're not in an adversary position here. It's labor and business against government and then maybe the get something accomplished as it is now it's it's labor against business with the legislator doing the moderating and the legislature knows how to get votes. So I don't feel that we're doing what we should do in the legislature as far as as a business lobbyists goal. They're not effective in Larson finished up his Duluth appearance by responding to a question about how small business fit into this whole picture small businesses like motherhood. Apple pie and the American flag (00:47:10) everybody is in favor of it. I very seldom hear anybody say anything (00:47:14) bad about small business (00:47:17) the (00:47:17) legislators Federal Congress are all (00:47:22) talking about the things that they want to do for small business because it's it's a plus the sad thing is (00:47:29) that what helps big business usually also help small business. It's (00:47:35) hard to segregate them as far as the as the government is concerned, (00:47:40) but I think what happens is most small business men (00:47:44) are too busy minding the star to be able to take much time to (00:47:49) do the type of lobbying that they should (00:47:51) do. They have not been very effective in getting (00:47:55) the type of laws through that. They should if small business could get some benefits from government in my estimation. Number one that would be an elimination of the capital gains tax. That would help small businesses much as anything and yet that isn't even discussed in Congress because of the fact that that that's a windfall for big companies, but it would help small companies to Minnesota. We haven't even reduced the capital gains taxed to match what the federal government has done. We're still back in and those excessive High areas, even though it's been proved that it's the capital gains tax that is that is really hurt productivity in this company. And as really dried up Venture Capital, (00:48:41) you know, the (00:48:42) double taxation on dividends is something that should be eliminated and that would help small business, but it's not going to come up because of the fact that when you think of dividends you think of big companies and therefore we're not going to give big companies in the shareholders of big companies a break but you actually would be helping small business. What do government people do when they start thinking about how do we help small business? What will spend a million dollars and put up this Center and we'll get seven bureaucrats in there and will answer questions on how to go into bankruptcy or will guide them somehow instead of taking the approach of reducing the barriers that put them into a bind. They come out with assistance centers and their idea of helping small business is spending more money. I appeared before the Minnesota Senate on them Labor and Industry and which they really wanted. All they really wanted to do was they said they wanted to hear my views and only anybody listened and then when I got done talking they said the only problem that we have in business in Minnesota people like you if you keep your big mouth shut if people wouldn't be dissatisfied, so I told them that you know, here is a committee on small business and what have you done this year or in the (00:50:05) previous two years, so they rattled (00:50:07) off. Things that they have done to help small business and all of them were in the assistance area and I pointed out that every one of them cost money taxpayers money and that's what you've accomplished. You've made the cost of doing business more expensive than it was before you set out to help small business. If you had not done anything we'd been better off. But if you had spent that time reducing some taxes and making the business climate more attractive we would have been far better off, but this is their particular (00:50:38) view. Thank you very (00:50:39) much. Don Larson senior editor of corporate report magazine as he appeared recently in Duluth at a Minnesota dialogue breakfast sponsored by the College of st. Scholastica. This is Dick daily.