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Political action committees funded by the state's pre-eminent businessmen were an important part of last year's election that saw Republicans flip both houses of the Legislature and come within a hairbreadth of holding onto the governor's office.

Conflicts strain relations between business, GOP

 Peter Bartz-Gallagher)

Charlie Zelle, chairman of the board of the Minneapolis Regional Chamber of Commerce, said he does not think that business and the Republicans in the Legislature are joined at the hip.

Tea Party conservatives could cause problems for traditional alliance

Political action committees funded by the state’s pre-eminent businessmen were an important part of last year’s election, which saw Republicans flip both houses of the Legislature and come within a hair’s breadth of holding onto the governor’s office.

The alliance between the GOP and business is an important union in an environment where DFL Gov. Mark Dayton is proposing a large income tax increase to help solve the state’s $5 billion budget deficit.

But statewide and regional business groups have not always seen eye-to-eye with the new group of fiercely independent conservatives who took office earlier this year.

Charlie Zelle, president and chief executive officer of the Minneapolis-based Jefferson Lines transportation company and chairman of the board of the Minneapolis Regional Chamber of Commerce, has been adamant in his opposition to the transportation bills that have passed the House and Senate. He does not think that business and the Republicans in the Legislature are joined at the hip.

“Certainly the Republicans have a close relationship with business. But that cliché can be proven false,” Zelle said.

Zelle and St. Paul Area Chamber of Commerce Executive Director Matt Kramer have been vocal in trying to defend the central cities, which are DFL strongholds, against cuts to transit projects like the Central Corridor light rail line.

“I understand the political strategy with transit. I don’t agree with it. We can’t pit traditional roads and bridges against transit. I defy anyone of any political stripe to find a community of 3 million that doesn’t have a multimodal transportation system,” said Kramer, who was chief of staff to former GOP Gov. Tim Pawlenty.

In greater Minnesota, local chambers of commerce in communities like Albert Lea and Crookston have opposed proposed cuts in Republican tax bills to local government aid.

Statewide business groups have chafed over Republicans’ repudiation of some health care and education proposals.

Larry Jacobs, a political science professor at  the University of Minnesota, said the conflicts reflect fundamental differences in the attitudes between business leaders and the new brand of Tea Party conservatives who are becoming increasingly influential in the GOP.

“I think this is one of the biggest developments in modern Republican politics. Here’s the way I would put it: The Republican ideological shift to the right has come into conflict with the programmatic needs of business. The unspoken truth is business needs government,” Jacobs said.

What’s playing out in Minnesota reflects tension between business and Republicans in Washington, D.C. The chief economist for the U.S. Chamber of Commerce told National Public Radio last week that lawmakers who don’t want to increase the government’s debt ceiling do not fully understand the resulting impact on interest rates and other consequences.

Charlie Weaver, executive director of the Minnesota Business Partnership, doesn’t see a complete split between Republicans and business. He noted that Republicans in the state Legislature and Dayton compromised early in the session on two pieces of legislation important for business: streamlining environmental permitting and creating an alternative pathway to teacher licensure. And he also looks favorably on proposals like the Senate’s plan to lower the statewide tax on business property.

With regard to policy priorities that have stalled at the Legislature, such as establishing an early childhood education rating system, Weaver said disagreements are a natural part of the legislative process.

“It’s like things that come up in a family. You might disagree, but you work it out,” Weaver said.

It has been a bumpy ride in a couple of instances.

The Minnesota Chamber of Commerce and Business Partnership support a bill by House Health and Human Services Reform Committee Chairman Steve Gottwalt, R-St. Cloud, to set up health care exchanges. The chamber has argued that lawmakers need to allow the exchanges this year in anticipation of full enactment of federal health care reform. If lawmakers don’t act, the federal government in 2014 will impose the exchanges on the state.

Business and Republicans like Gottwalt received fierce blow-back from many of the newly elected Republicans who campaigned ardently against the federal health care law, which they derisively refer to as “Obamacare.” Freshman Rep. Mary Franson, R-Alexandria, a Tea Party activist and member of the Health and Human Services Committee, blasted her fellow Republicans on a talk radio program for introducing the exchanges.  The proposal was pulled from a hearing in February and has gone nowhere since.

A business-backed proposal to create a statewide rating system for early education programs has run aground over fears of government intrusion.

Rep. Jennifer Loon, R-Eden Prairie, proposed the rating system, which was included in the House education omnibus bill. Conservative advocacy groups, including the Minnesota Family Council and Education Liberty Watch, opposed the bill, arguing the state was intruding in decisions that should be made by parents. In an early morning debate on the education bill, Loon’s proposal was removed.

The standoff between lawmakers over the budget creates a scenario where business groups could wield influence in bringing legislators to an end-of-session budget deal, Jacobs said. In 2008, the state chamber’s support for the transportation funding bill that raised the gas tax gave political cover to moderate Republicans. The chamber distributed a letter on the House floor from President David Olson proclaiming support for a compromise 5-cents-per-gallon increase to the state gas tax. The blessing from the chamber, which opposed the larger 10-cents-per-gallon hike, was a breakthrough in getting six Republicans to support all House DFLers, who lacked the two-thirds majority necessary to override Pawlenty.

Jacobs said business could be an influential player in brokering a deal at the end of this session.

“There’s a determined effort to rerun the transportation coalition (from 2008). You wouldn’t expect to see the Dayton administration sidling up to business. But that’s what’s going on behind the scenes to put pressure on Republican lawmakers,” Jacobs said.

One comment

  1. To the extent that the business community pushes legislation that matches the Republican Party platform, such as bills that promote free enterprise and free markets, do not raise taxes, and limit the size and scope of government, then I predict the two sides will agree. If the business community keeps pushing this big government agenda of raising taxes on gasoline when the funds do not even go towards roads and bridges or for heavily subsidized shiny new trains that destroy small businesses on the line or stadia that subsidize billionaire owners and millionaire players or worse yet, for expanding government control over the state’s youngest children and controlling private childcare businesses, there will continue to be problems. The business community may supply some money, but the grassroots supplies the votes and the boots on the ground.

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