What does it mean to be “business friendly?” That was the theme of Gov. Tim Pawlenty’s State of the State speech yesterday, where he zeroed in on taxes, and sounded many of the same themes he sounded in a speech in Burnsville a few weeks ago when he appeared to suggest it means (among other things) spending less on health care and more on roads and bridges.
Majority Minority Leader Dave Senjem picked up the theme, according to a story from MPR’s Tim Pugmire, when he said, “If you expect to have a growing economy in Minnesota, you’ve got to look and ask why we’re 44th in the country in corporate tax rate. What corporation would want to stay here with that kind of a tax rate?”
What corporation, indeed?
Let’s look at the record:
Target Corporation – Made $19 billion in profit last year, almost $3 billion more than the year before.
General Mills – $4.4 billion.
U.S. Bancorp – Generated $4+ billion in income.
Xcel Energy – Had a 5.7% profit margin
Thrivent Financial for Lutherans is privately held.
PepsiAmericas Inc. – Made a $1.8 billion profit in 2007, higher than the year before.
The Valspar Corporation – Made a $971 million profit last year, higher than the year before.
Ameriprise Financial – Had a gross profit of $6 billion, higher than the year before.
The Travelers Companies, Inc. – Had a 17% profit margin last year.
3M – Made an $11 billion profit last year, higher than the year before.
Ecolab Inc. – $2.4 billion in profits last year, higher than the year before.
Securian Financial Group Inc. (Minnesota Life) — Privately held.
Patterson Dental – $969 million profit last year, more than the year before.
Land O’Lakes Inc. – Lists a 1.25% profit margin.
Andersen Corporation — Is privately held.
The Toro Company – No information available.
Donaldson Company Inc. – 18 consecutive years of earnings growth, the company says. $604 million profit last year, higher than the year before.
Holiday Companies – No information available
Thermo King Corporation – No information available.
Northwest Airlines – A $3.2 billion profit reported in 2007
Nash Finch Company – A $401 million profit in 2007, less than a year ago.
Other corporate headquarters here include:
Alliant Techsystems Inc.
C.H. Robinson Worldwide Inc.
St. Jude Medical Inc.
Polaris Industries Inc.
Carlson Companies, Inc.
Petters Group Worldwide
Those are the biggest companies, and the biggest employers, in Minnesota. The profits reported here are pre-tax. Most of the companies are reporting record profits. Many of the companies are doing so well, in fact, that they’re able to pay their top executives millions in salaries and bonuses.
Senjem appeared to be citing the Tax Foundation’s corporate tax index. But the Foundation’s overall tax ranking for business puts the state at #42.
But let’s look, not at the corporations who have stayed, but those who have left.
When Norwest Bank took over Wells Fargo, much of the operation headed west. California’s ranking is 47th. When Allied Signal bought Honeywell, the headquarters moved to New Jersey, a state that is ranked 49th.
Now, it’s clear Minnesota is about to lose Northwest Airlines to Georgia. But that has little to do with the corporate tax situation in Georgia (ranked 36th, just 8 spots higher than Minnesota).
In the last few years, some corporate headquarters have moved here. Xcel Energy, formed by the merger of Northern States Power and another company, for example, left a state — Colorado — that was ranked 13th.
Bemis Corporation moved to Neenah, Wisconsin, but that seems to have more to do with the fact the company execs live in Neenah.
As the debate unfolds, it might not be a bad idea to press the politicians for specifics when invoking the needs of business and the specific benefits to the state. How much help do Minnesota’s corporations need?