Minnesota received some welcome news for the short term in the budget forecast: The state’s checking account is projected to have an $876 million surplus for the current biennium, which ends June 30, 2013. Now let’s use the opportunity for our long-term advantage by focusing on ways to seek efficiencies in the delivery of government programs and services.

The projected surplus must be put in perspective given the fact that the state’s general fund exceeds $32 billion. And, in recent years, tax collections to run the government have been anything but stable. We have a projected surplus nonetheless. Let’s not repeat the mistake we made the last time we had good news. Let’s take the opportunity to enact priority-based budgeting and restructure the delivery of state and local services – both key priorities of the Minnesota Chamber.

Governor Dayton and legislative leaders have been promoting government reform in their respective 2012 agendas, and they underscored their resolve following the budget forecast. Reform is at the foundation of the Minnesota Chamber’s Jobs Agenda as well. Creativity and innovation have enabled businesses to survive the recession and, in many instances, emerge stronger. Similar principles must guide government if Minnesotans are to adjust to the “New Normal.” The statewide business community stands ready to help forge a foundation for Minnesota to flourish in the economy.

It’s a recurring theme among our members, “Why can’t government let me run my business instead of regulating me to death? I wish they would just once say, ‘I am here to help,’ and not ‘I am here to regulate, inspect or audit you.’”

Regulatory reform will be among the Minnesota Chamber’s priorities for the 2012 Legislature. Our initiatives include continued streamlining of the environmental review and permit systems. But we know businesses are frustrated by regulations in a variety of areas.

Consider this example from Red Wing Shoe Co. which was told it no longer could leave doors to its work floor open to provide some ventilation and allow workers to go outside for breaks. The directive came from the U.S. Department of Homeland Security since Red Wing Shoes imports and exports footwear. Consequently, in order to provide an appropriate work environment, the company felt compelled to install a $750,000 air conditioning/dehumidification system. And because Minnesota corporate income taxes are apportioned on capital investment, the company’s state income taxes went up as it invested to make a better workplace for its Minnesota employees! It’s no wonder that Minnesota businesses complain about the regulatory environment.

The Minnesota Chamber’s efforts at the Capitol are most effective when we can provide policy-makers with examples. If you are aggravated by regulations, please forward the specifics to Laura Bordelon, senior vice president for advocacy, at lbordelon@mnchamber.com.

 Three cheers for the focus on Minnesota jobs at two events – the Governor’s Jobs Summit, and the Minnesota Manufacturers Summit, conducted by the Minnesota Manufacturers Coalition and coordinated by the Minnesota Chamber. Participants explored both to how to create jobs and how to find skilled workers to fill existing vacancies. A report by the Minnesota Department of Employment and Economic Development revealed the alarming statistic that almost half of Minnesota manufacturers say they can’t fill positions due to a lack of qualified candidates.

Governor Dayton has been a cheerleader for jobs and economic development, and we welcome the leadership. We also encourage him to take his lead from those who are providing the jobs. If there was one noticeable difference in last week’s two events, private-sector job-creators were greatly outnumbered at the Jobs Summit, and they were the voice at the Manufacturers Summit. The private and public sectors need to work together to increase business confidence in Minnesota. We look forward to building on our successes at the 2011 Legislature to ensure that Minnesota employers can succeed in a global economy.

Just back from the annual Inter City Leadership Visit sponsored by the Saint Paul and Minneapolis chambers of commerce. This year’s event took us to Portland. While you can’t help but notice the expansive transit system and the large number of homeless people living in downtown, what impressed me most was their “Oregon Business Plan.” Developed by a broad cross-section of the business community, the Business Plan’s mission is to spur business development and high-wage job creation across the state. The document outlines the issues Oregon’s economy faces and key initiatives for the state to address. Interestingly enough, ours agendas are fairly similar – revamp Oregon’s budget system, seek to derive greater value for their public dollars, reform public employee compensation, etc. Minnesota faces similar issues. Based on the visit to Oregon, I believe we have an opportunity to develop our own business plan. Hopefully it will be as well received here by our elected officials as it is in Oregon.

It’s refreshing to hear newly named Chancellor Steven Rosenstone’s commitment to shake up things at the Minnesota State Colleges and Universities in order to meet today’s evolving workforce needs. Indeed, both Rosenstone and Eric Kaler, the new president at the University of Minnesota, are focused on strengthening partnerships with the business community.

As committed as they are, Minnesota’s public and private higher ed systems cannot do it alone. Preparing today’s students for the global economy starts in the K-12 system, as underscored in a headline from Rochester: “7 in 10 high-school grads at Rochester Community and Technical College need remedial courses.” The statistic is not specific to Rochester; one-third of students entering college today enroll in remedial courses.

K-12 and higher ed reform must be connected at the hips. The Minnesota Chamber achieved initial victories at the 2011 Legislature toward the goal of ensuring we have an effective teacher in every K-12 classroom. That’s important since, second to parents, teacher quality is the No. 1 predictor of student academic success. We’ll remain just as aggressive in our 2012 agenda. Minnesota employers demand a world-class workforce to compete in today’s global marketplace.

State policy-makers received mixed news in the September economic forecast issued by Minnesota Management and Budget. On the positive side, the state collected $353 million, or 2.3 percent, more revenue than expected in the fiscal year that ended June 30. Looking ahead, however, Global Insight Inc., the state’s economic consulting firm, projects much slower growth than originally forecast in February. That could be a problem as the February forecast was the basis for the 2011 Legislature as it set the state’s next two-year budget. If the economic projection holds true, the state is likely doomed to face another shortfall.

The continuing cycle of budget shortfalls underscores that government must find ways to deliver programs and services at a lower per-unit cost. Forty-two percent of the general business community, as polled in the annual Minnesota Business Barometer Survey, believes redesign of government services can make a significant dent in Minnesota’s budget deficit.

Government reform headlines the Minnesota Chamber’s legislative agenda. We made some significant progress in 2011, and we have a lot more work to do.

 Many policy-makers today are “talking the talk” about government redesign. The change is necessitated by the fact that Minnesota faces an aging population, fewer taxpaying workers and a greater demand for state services. Yet, when push comes to shove, too many policy-makers revert to their old ways with the same predictable results.

A refreshing exception is Beltrami County in northern Minnesota where public officials are “walking the talk.” Kudos specifically go to Tony Murphy, the county administrator whom many credit as the driving force behind the county’s initiatives to examine operations and focus on outcomes. Murphy’s leadership is featured as part of MinnPost’s yearlong series on leadership. Click here for the full story.

Other local government bodies are scrutinizing their operations, too. Most noteworthy, however, is that Beltrami County did not wait for the economic downturn and the resulting budget brunch to take action. Murphy and county leaders were ahead of the curve in realizing that their model of delivering services could not be sustained.

Minnesota government at all levels needs to collectively pursue meaningful budget reform if we are to escape the cycle of budget shortfalls. Restructuring government operations is essential if Minnesota is to sustain the quality government services necessary to be competitive in the global economy at a price that Minnesota businesses and citizens can afford. Beltrami County provides one path to reach that goal.

The headline still has me scratching my head: “Local and state governments, normally job creators, are weighing on the national economy.” To paraphrase the thrust of the story, the recent recession took an abnormally tough toll on the government workforce, and that’s bad for the U.S. economy.

What’s that?

Don’t get me wrong. I empathize with the millions of Americans who have lost their jobs in the public and private workforce. But I respectfully disagree with the suggestion that smaller government is somehow a “casualty” of the recession or that bigger government is a necessary ingredient to re-energize the economy.

Moody’s Analytics, as referenced in the story, estimates that each job in state and local government supports an additional 1.3 jobs elsewhere. I don’t have an analysis at my fingertips, but I’ll wager that the multiplier effect of most private-sector jobs is at least that much or even greater.

“In a healthy recovery,” the story leads, “states and localities produce jobs, expand social services and help fuel the nation’s economic growth. Then there’s the 2011 recovery.”

The report misses the point that, by everyone’s account, the U.S. economy has settled in a “new normal.” That doesn’t mean we should casually dismiss the permanent loss of any job. It does mean, however, that public and private employers alike must use their ingenuity to scrutinize how they make products and deliver services – identifying ways to ensure quality but at a lower per-unit cost.

Government, like the private sector, must find ways to restructure and redesign operations in light of the new economic reality – implementing changes that will save money and generate a better return on the investment of taxpayer dollars. Bigger government usually means greater tax burdens. It seems to me that a smaller and more efficient government could be a sparkplug to the national economy.

The 2011 regular session of the Legislature – and, for that matter, the special session, too – will be evaluated on several fronts for lawmakers’ effectiveness and ineffectiveness. The Minnesota Chamber will offer its scorecard, too. Rest assured, our ratings will be based on quality of work vs. quantity of work. That apparently is not the case with everyone.

PIM/Capitol Report provided a numerical tally of the session: “After a session-long litany of complaints abort the slow pace of this session, from legislators and lobbyists, we checked the numbers of bills introduced this regular session and compared them with the last budget session in 2009. There were, indeed, fewer bills introduced this year.” The Senate introduced almost one-third fewer bills than their 2009 counterparts – 1,477 vs. 2,166. The 2011 House introduced about three-fourths as many bills – 1,761 vs. 2,407.

The analysis may bolster the arguments of those who believe that more is better when it comes to legislative activity. I’d rather see thorough debate on bills that address pressing statewide priorities rather than a flurry of proposals that often clog the system and stand little chance of passage.

When most of us don’t complete a task, or believe we don’t have it just right, we put in a little overtime. It is no different at the State Legislature. So if it takes a special session to begin reforming how this state spends our tax dollars, that needs to happen.

Some legislators and the governor support the status quo and still believe that more money is the answer to all of our problems. That will only put off the tough decisions. Minnesota is at a crossroads. We face an aging population, fewer taxpaying workers and a greater demand for state services. Raising revenue is not the answer. We will never have enough money to sustain the current level of programs; we must prioritize and restructure our spending not unlike what businesses and families have been doing for years.

Minnesotans, and in turn the Legislature, must think long term. If we want our children and grandchildren to have the same opportunities for success in Minnesota that we did, we cannot rely on the policies of the past. Raising taxes is not the answer. We appreciate the resolve of those lawmakers to balance the state budget by holding the line on spending and reforming the way we spend our taxpayers’ money.