Doug Grow – DFL stenographer and reporter for the Joyce-Foundation-supported MinnPost – is convinced that the GOP is lying about the effects of the Warehouse Tax.
Grow writes about the Red Wing Shoes’ opting out of building a new distribution center in Red Wing; it’s something we wrote about here in SITD a few weeks ago.
According to Grow, the GOP’s line is wrong because the executives involved didn’t step out on stage and burn an effigy of Tom Bakk as the cameras rolled.
Business Is Hard:No, really; asked if the tax was the sole reason Red Wing Shoes deferred its expansion…:
Sachen couldn’t say that it necessarily would have.
Would the project definitely go ahead if the tax were eliminated?
Sachen couldn’t say that was necessarily the case, either.
He did say that the company, which has a facility in Potosi, Mo., is “in talks with Potosi.” But again, he wouldn’t say that there’s a direct link between the tax and the warehouse project.
Who’da thunk it; a businessman whose business depends, on a certain extent, on not pointlessly pissing people off over politics in this rent-seeking environment, gave an honest answer; there are many reasons that a company does or does not go ahead with an expansion.
Which on the one hand means there’s not a smoking gun hovering over “jobs that won’t be created” leading back to the DFL’s Warehouse Tax (point for Grow). And on the other hand, it means that there never will be that smoking gun. (Take a point away from Grow).
By the way – Democrats get hurt when conservatives say they don’t understand economics or business. Reading this next bit, one would have to say “hurt” is probably less appropriate than “chastened”:
Additionally, it should be noted that the Red Wing Shoes warehouse wouldn’t create jobs — other than construction ones in building the warehouse. Rather, it would allow Red Wing to consolidate its current the five warehouses into one facility. Those warehouses, by the way, employ about 80 people, a number that would not increase with a new warehouse.
Making the business – and the efforts of those 80 existing warehouse workers – more efficent gives the business more profit. Which gets used to hire more people, design more shoes, improve existing products…heck, even just make staying in Minnesota more tenable. Which means those 80 warehouse jobs stand less risk of becoming 40, or 20, or 0 warehouse jobs.
It’d also speak to the long-term commitment on Red Wing’s part to keep those jobs in Red Wing, rather than someplace else.
Leave The Gotchas To The Comedians: Of course, it’s not just Doug Grow. Dave Mindeman of mnpAct thinks he’s got the DFL Warehouse Tax’s MNGOP critics over a barrel:
In addition, Rep. Garofalo apparently missed the June 28th Star Tribune clarification on where the tax actually applies…..
Myron Frans, state revenue commissioner, said Dayton has asked him to study the issue, and he has spoken with Red Wing officials about their concerns. He said the tax only applies when the producer or manufacturer purchases warehouse or storage services from another firm.
Garofalo offered no other examples of a potential problem. Thus the Red Wing Shoe factory will NOT be affected by this tax.
In other words, Rep. Pat Garofalo is, as usual, making it up.
And Mindeman deigns to condescdend:
I would hope this legislator will someday learn to get the facts right before making another condescending statement of inaccuracy.
Garofalo has actually worked in the private sector. I know this because we worked for the same company, once upon a time; it was he that actually introduced me to the Drudge Report back when we were both minions at a local Fortune 500.
And he knows – as all of us who work in the private sector and pay attention to things do – that businesses rarely make decisions based on single factors, or on short-term stimuli. Running a significant brick-and-mortar business (shaddap, consultants) is the ultimate long bet; it involves considering everything; access to the needed workforce, communications, supply chain, price to get product to market, taxes…
…and long-term outlook.
Red Wing – and Laurence Transportation in Red Wing, who also held off on a warehouse expansion that will be directly affected by the DFL’s Warehouse Tax – is betting against Minnesota in the long term, given the way the climate looks now.
And since Mindeman wants to play the “they curiously ignored a Strib article” game, it’d seem he missed one too; Navarre is up and moving to Texas. It warehouses products – providing the “value add” that the state is taxing – and also works in e-commerce, which is getting slapped by the DFL’s Amazon Tax.
So it’s gone:
That was the first time the 30-year-old Minnesota firm had said publicly that it planned to move not just some of its warehousing operations but also its headquarters to the site of its recently acquired Speed FC e-commerce operation based in Texas. Navarre acquired Speed FC Inc. last November for $50 million in cash and stock.
Was it just the DFL’s Warehouse Tax? Or the DFL’s Amazon Tax?
No. But both of them, and other changes to the state’s business tax code, had to look ugly to a business that’s already losing money – money that will probably be made up by consolidating operations in a lower-tax locale alone.
If you’re one of the almost 300 employees being pink-slipped, do you think it makes a difference?
They Also Think Penelope Garcia Is Like A Real Investigator: Back to Grow’s column, where in a quote of Governor Dayton’s chief of staff Bob Hume, he shows that…:
- he is aiming his piece at economic low-information voters, or…
- …he’s an economic low-information voter himself:
Hume is commenting on Garofalo’s call for a special session to get rid of the tax. If you work in the private sector, see if you can spot the clinker:
Bob Hume, the governor’s deputy chief of staff, made it clear that a special session is not in the offing.
“This is a stunt, not a solution,” Hume said in a statement. “The Legislature is coming back more than a month before this tax would take effect, which is more than enough time, if revenues permit, to review and possibly revise this tax.”
A whole month? To make a decision affecting the profitability, well-being or survival of a business?
These decisions get made based on long-term outlook.
And while the state’s long-term outlook is subject to debate, let’s remember that when the DFL-shilling media says things like…:
To date, though, the Minnesota economy is humming at a far healthier rate than the economies in such business-friendly states such as Wisconsin and South Dakota.
…that the economy still largely reflects Republican policy, set when the state had responsible two-party rule (shaddap about Ventura) between 2002 and 2012. The DFL’s tax and spend orgy still hasn’t largely gone into effect; even the first of the taxes have been wending their way through the process for about a week now, and the worst is yet to come.
Get back to us in a year.
Around election time, preferably.