Jobs policy bill reduces accountability for tax dollars; fails to address labor shortage

The Minnesota Senate on Monday approved a Jobs and Economic Development Policy bill that tinkers around the edges of state job programs instead of taking bold and necessary steps to address Minnesota’s labor shortage or increase worker wages. Recent reporting indicates Minnesota still has 10,000 fewer jobs today than it did before the pandemic, lagging behind more than two-thirds of states. 

“Minnesotans deserve a jobs agenda that truly prioritizes more jobs, better wages, and stronger economic growth, but this bill falls short,” Senator Rich Draheim (R-Madison Lake), the Republican lead on the Jobs Committee said. “Minnesotans are paying $13,000 more per year than they did in 2021 due to inflation, yet we still have fewer jobs than we did before the pandemic. We should have used this opportunity to work on closing our labor shortage, helping businesses expand and increase wages, and building a robust economy that is ready for the future.” 

 Notably, the bill weakened several guardrails aimed at ensuring taxpayer dollars are used appropriately:  

  • The bill eliminates requirements for local government grant applications to provide detailed cost estimates, timelines, and commitments to repay if milestones are not met. 
  • The bill also removes the limit that no more than 10% of funds allocated to grantees under the State Dislocated Worker Program can be used for administration, risking further administrative bloat. 

Senate Republicans offered several amendments to improve the bill, including: 

  • An amendment requiring DEED to work with MMB to determine the effectiveness of new programs or of grants of $500,000 or more. 
  • An amendment allowing small businesses to receive a tax credit for using Workforce Development Fund money to 1) upskill current entry-level employees; or 2) provide training that leads to an increased salary or opportunities for career advancement with the employer.  
  • An amendment reinstating a 10% cap on administrative costs for grants to nonprofits. 
  • An amendment reinstating a requirement that DEED prioritize projects with highest public benefit. 

However, the Senate Democrat majority rejected these amendments.