ST. PAUL, Minn. (AP) — Gov. Mark Dayton and legislative Democrats on Wednesday proposed the state give Minnesota businesses a $3,000 tax credit for each unemployed person, veteran or recent college graduate they hire as a way to push down the state's unemployment rate.
"Despite our economic progress in the last several months, there are still 175,000 Minnesotans who are unemployed today," Dayton said at a Capitol news conference with Democratic House and Senate leaders. "This program is targeted at putting them back to work."
The proposed tax credit, with a $35 million price tag Dayton said he would pay by closing corporate tax loopholes, is the centerpiece of a DFL jobs package. It includes a $775 million bonding bill for state construction projects, the details of which Dayton plans to release next week. The governor also proposed applying Minnesota sales tax to out-of-state retailers who sell their goods online to state residents, which Dayton said puts Minnesota businesses at a competitive disadvantage.
Job creation is "our top priority for the 2012 session," which begins Jan. 24, said House Minority Leader Paul Thissen, DFL-Minneapolis.
Dayton said he hadn't vetted his job creation proposals with Republicans who control the Legislature. Sen. Geoff Michel, chairman of the Senate Jobs and Economic Development Committee, said he welcomed Dayton's emphasis on jobs. He said he hoped Republicans could find areas of agreement with the Democratic governor to benefit the employment climate.
But closing tax loopholes that benefit Minnesota corporations could be a tough sell with Republican lawmakers who have been unified in opposition to tax increases of any sort.
"I disagree with an approach that spends more money without addressing needed reform and relies on short-term bonding projects to grow our economy," said House Speaker Kurt Zellers, R-Maple Grove.
Senate Republicans previously proposed their own series of job-creation measures. Michel said Republicans would like to reduce the statewide business property tax and the corporate income tax rate as starting points, as well as reducing state regulations.
Beyond the $3,000 tax credit for 2012, Dayton's plan would extend a second credit of $1,500 per job created for the first half of 2013. His administration estimated that doing so would create more than 10,000 new jobs in the state.
As of November, the most recent month for which figures were available, Minnesota's unemployment rate stood at 5.9 percent.
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