The Development Landscape

{1} Health Care

>>> There’s no silver bullet to solve the health care problem, Bill Blazar says. But he believes that the first state that figures out a way to make coverage for smaller businesses affordable is going to have an economic advantage over all of the other states in its region.

“We’ve been lobbying for changes related to health policy for a number of years,” Blazar says. “We’d like to restructure the way we buy health care and make changes in the system so that it’s more affordable for everybody. The legislature has made some significant changes in our health care system, but to this day it remains a major cost issue.”

High-cost health care takes its toll on wage growth, he says. And perhaps even more insidiously, companies begin looking for ways to automate work. “You don’t buy health care for a machine,” Blazar says.

>>> The motor vehicle sales tax that passed in late 2006 will make more dollars available for transportation infrastructure, Blazar says. And that’s a good thing, because all facets of transportation—from roads and bridges to public transit and air service—are becoming more critical to Minnesota business.

“Because of the worker shortage, businesses in greater Minnesota are drawing employees from greater and greater distances,” he says. “With fuel prices so high, these workers want to find ways to cut their commuting cost, and they’re telling their employers that. So suddenly, public transport is becoming an issue in places like St. Cloud, Rochester, Alexandria, and Thief River Falls. These communities have businesses that are trying to grow, and the people who want to work for them are finding that alternatives . . . are not available yet.”

>>> The cost of electricity and natural gas—not to mention the reliability of the supply—will continue to be major concerns in coming years, Blazar says.

“These issues are going to go up on everybody’s screen, so to speak,” he says. “If you are an Excel Energy customer, you’re probably paying close to 15 percent more now than you were a year ago. If you are a customer of Southern Minnesota Municipal Power Agency, which serves places like Owatonna, Austin, and Rochester, you’ve had two rate increases in the last twelve months that total about 22 percent.”

The effect on economic development could be devastating, he projects. “Our economy is so much more electricity-intensive now than it was ten years ago,” he says. “Those cost increases are going to play very significantly into how well our economy does in the future. We need the legislature to be more sensitive to the cost of electricity than they’ve ever been.”