In Response: Expensive or not, Minnesota a good place to do business
From the column: "Rankings suggest Minnesota has room for improvement, but they do not indicate Minnesota is the worst, do they?"
After the most recent series of Opinion-page pieces in the News Tribune regarding business expenses in Minnesota, some clarification seems necessary. The analysis provided by the newspaper did not take some important factors into consideration.
Consider the ranking cited in the April 21 “Our View” editorial, “ No surprise that Minnesota ranks most expensive for business .” It appears that SimplifyLLC’s ranking put more weight on the corporate income tax rate than on other measures, even though the corporate tax rate does not apply to most businesses being started in Minnesota, as Vicki Hagberg, regional director of the Northland Small Business Development Center, pointed out in the editorial.
According to SimplifyLLC’s numbers , Minnesota is tied for 39th for the required fee to file as an LLC, is 38th for average monthly commercial electric bills, is not in the bottom 10 states for commercial real estate availability or small business loans, and is 16th in business survival (the net change in the number of operating businesses, year to year).
These rankings suggest Minnesota has room for improvement, but they do not indicate Minnesota is the worst, do they?
After all, Minnesota has long, cold, dark winters, so it makes sense that our electric bills would be higher.
The small-business-loan measure that was used related only to business loans made to companies by small banks operating in lower- to middle-income areas; it ignored large-bank loans and those made to businesses that operate in already healthy commercial environments (think industrial parks, high-volume retail areas, and downtown business districts).
And Minnesota is 16th in business survival, maybe the most important indicator of all. Businesses that operate in Minnesota stay in business in Minnesota, regardless of the $135 fee they must file as an LLC.
There are other statistics that I feel paint a more accurate and more positive picture of Minnesota and what it is like to do business here. Minnesota ranked second in quality of life this year by World Population Review; 20th in o verall population growth between 2010 and 2020 , according to U.S. Census figures; 11th in Fortune 500 companies , with 18 in 2021 and 16 in 2022, according toStatista; 20th in annual GDP per capita , as determined in 2022 by the U.S. Bureau of Economic Analysis; and second-best state to live in overall , with a second in opportunity, 15th in economy, and 21st in fiscal stability, according to US News and World Report.
It was an insulting disservice to the readers of the News Tribune for the newspaper to apparently assume we can’t understand numbers or statistics. We can see data, make our own interpretations, and come to our own conclusions. Instead of citing facts, the newspaper seemed to rely on its own vague and politicized analysis of a single, faulty ranking by a business-advocacy organization to tell us Minnesota is a bad state for business. It came off as yet another thinly veiled swipe by the Editorial Board at our DFL-led administration and Legislature. This was wrong.
Whether Minnesota is the most expensive state for business or not, Minnesota is a good place to do business.
Sam Karns of Duluth is a lifelong Minnesotan, has worked with and for small businesses across the state, and is a certification officer in the organic-foods industry.