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There's a battle between borders. Minnesota has been losing a lot of jobs as well as businesses the past few years. South Dakota on the other hand has been prospering. Now Minnesota legislators are hoping to compete economically. The state is looking at tax-free zones. In the last four years, Minnesota's lost 38,000 manufacturing jobs. And many think if something's not done soon, the state will suffer. But Governor Tim Pawlenty thinks tax-free zones could change that.
It was a room filled with concerned people. Maritza Gibbs says, "In September 1st, 2002 I started a business and it's growing already. But we see a potential of actually having to expand and at this point we can't because bringing people under a payroll would be very difficult."
That's why Governor Tim Pawlenty and other legislators are looking at creating tax-free zones in parts of Minnesota. Businesses would be free from paying state income taxes, property taxes and sales taxes. And Minnesota residents wouldn't pay property tax or state income tax. It's an effort to compete with other parts of KELOLAND. Governor Pawlenty says, "I am tired, as the Mayor is, tired of waking up and seeing another business moving to Sioux Falls. You know the problem with having a business in Sioux Falls is you've got to be in Sioux Falls."
But he credits Sioux Falls with being aggressive economically. Now Governor Pawlenty wants his state to compete. And he says his plan can work. "It's the mother of all economic development tools. It's enterprise zones on steroids and we can bring thousands of jobs back to rural Minnesota."
Helping business owners like Gibbs. She says, "I support him 100% on this. Yes, I see for a small business this would be a benefit."
Now the bill has to pass the Minnesota Senate. He says, "I can get this passed in the House, but we're going to need the Minnesota Senate to hopefully get excited about it and that starts with being educated about it."
The part of Minnesota that will be most affected if this bill gets passed is the southwest because of the major decline in jobs. Governor Pawlenty would like to have these tax-free zones in place by next year. The tax-free zones can last up to 12 years, then taxes return to normal.
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