Gov. Tim Walz tells business leaders he understands regulatory and tax concerns

Business leaders, worried about Minnesota's workforce shortage, taxes and health care costs, listened carefully Wednesday night as Gov. Tim Walz's administration and legislators set out their vision for the state's future.

In his first address to the business community since he was sworn in, Walz, a Democrat, said he understands worries about overtaxation and wants to make sure tax dollars are spent effectively. He also said his administration will listen to business owners' concerns about onerous regulations.

"We, as government, need to not see you as coming to us to try to get around something," Walz told the crowd at an annual Minnesota Chamber of Commerce event. "You are bringing those things up because you feel that they're not effective, burdensome and costly to your business, without improving the lives of workers or the environment."

While the state's major business groups largely supported Republican candidates this election season, members of the business community said they are optimistic about working with Walz, whom they described as pragmatic.

"He's a guy that, I think, will get in front of issues as opposed to coming in at the end, which I think will be a refreshing — I'll just go ahead and say it — change at the Legislature," Minnesota Chamber of Commerce President Doug Loon said.

Policy details were scant as four members of Walz's cabinet, the commissioners who oversee employment and economic development, commerce, transportation, and labor and industry answered questions on a panel Wednesday. But Loon said he was encouraged that so many commissioners participated on short notice, some of them appointed just last week.

Commerce Commissioner Steve Kelley talked about expanding rural broadband access and creating more jobs in the renewable energy sector. Department of Employment and Economic Development Commissioner Steve Grove, who is returning to Minnesota from Silicon Valley, where he was founding director of Google News Lab, said he wants to make Minnesota a friendlier place for startup businesses.

In her initial pitch to business leaders for an increased gas tax, Department of Transportation Commissioner Margaret Anderson Kelliher said that in the next six years, the state faces a transportation "funding cliff."

"This is about prosperity," she said. "This is about connecting people. It's about connecting goods to people."

The chamber also laid out its legislative session priorities Wednesday, many of which conflicted with Democrats' goals.

In addition to increasing the gas tax, a new Democratic majority in the Minnesota House and the Walz administration want to expand MinnesotaCare to allow anyone to buy in and expand paid family and medical leave requirements.

Meanwhile, the chamber's list of legislative priorities includes: "Oppose 'one-size fits all' labor mandates that are unfeasible for the variety of workplaces across Minnesota." And under a health care heading it states: "Oppose destabilizing expansions of government programs."

Like the Republican majority in the state Senate, the chamber suggested dedicating all of the auto parts sales tax to paying for transportation rather than a gas tax increase.

"The expansion of taxes is really what we're concerned about," said Tom Taylor, president of the Shippers Resource Center in Burnsville, who was watching to see what the governor would say about taxes at Wednesday night's event.

However, Taylor noted that he's not completely opposed to raising the gas tax slightly as long as it goes to paying for roads and bridges, not transit. He said Walz, a former congressman, seemed to take a middle-of-the-road approach in Washington, D.C., and he hopes that continues.

Other attendees at the chamber event said they hope legislators work on expanding workforce housing and child care, particularly in greater Minnesota. Some said they want clarity and continuity in environmental regulations, and yet others said the state needs to better align education with workforce needs, to channel people into jobs.

State House and Senate leaders echoed those concerns when they spoke at the chamber's event. The Republican and Democratic leaders agreed that child care, housing and health care are all important in determining whether Minnesota is an affordable place to live.

But they disagreed about how to keep costs down and how to improve education.

The chamber and the Minnesota Business Partnership both spent heavily to try to keep Republicans in power in the House. Charlie Weaver, who leads the Business Partnership, said that while his organization disagrees with Democrats on some issues, he has known House Speaker Melissa Hortman, DFL-Brooklyn, for a long time and she comes from a small-business background — her family owns a used auto parts business in Blaine.

He also said he has texted and talked with Walz a few times since he was sworn in, which he said is far more communication than he had with former Gov. Mark Dayton. He said four of Walz's commissioners reached out to him on the day they were appointed.

"I've been very impressed with the open communication of both the governor and his administration so far," he said. "And that's 90 percent of the challenge."