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Warehouse Tax: Rep. Garofalo Gets It Wrong - Again

Category: Pat Garofalo
Posted: 07/08/13 20:25

by Dave Mindeman

As many of you who read this blog are aware, I am not a big fan of Rep. Pat Garofalo. His rhetoric is hyperbolic...(i.e. - after the Daycare Union bill passed, it was Garofalo who yelled, "Let them applaud, they OWN the place!" ), his reasoning is ALWAYS one-sided, and his contemptuous treatment of others is legendary.

So far in his career, his only redeeming legislative value is a vote to make same-sex marriage legal in Minnesota. And quite frankly, I still believe there was some ulterior motive for that vote.

But I digress. Today we look at Garofalo's OP-ED in the Sun/ThisWeek local paper on the "warehousing tax".

Let's start with this quote:

Last week, I stood alongside fellow legislators and business owners from around the state to call on Gov. Mark Dayton to repeal the warehousing tax. While the tax doesn't begin until 2014, it is already costing jobs and expansion opportunities in our local communities.

Already costing jobs? Oh, please Rep. Garofalo, do tell.....

Minnesota is already starting to feel the impacts of the warehousing tax, even though it doesn't begin for another year. Red Wing Shoes recently announced the delay of a $20 million warehouse facility. Other businesses I've spoken to have had to put plans on hold, taking a "wait and see" approach before deciding whether to add jobs or move forward with expansion projects.

Rep. Garofalo had this Op-Ed published on July 3rd. However on 6/28, MinnPost investigated this very situation after the GOP had their publicity stunt news conference.

MinnPost - Are GOP and businesses crying wolf over impact of new warehouse tax?

The Red Wing Shoes situation was addressed directly with John Sachen, a Red Wing Shoe executive - quote:

But, after listening to John Sachen, a Red Wing Shoe executive, it's not so clear there's a direct link between delaying the warehouse project and the tax.

"It's on hold," said Sachen of the project.

Would the project have gone ahead if there'd been no tax?

Sachen couldn't say that it necessarily would have.

Would the project definitely go ahead if the tax were eliminated?

Sachen couldn't say that was necessarily the case, either.

He did say that the company, which has a facility in Potosi, Mo., is "in talks with Potosi." But again, he wouldn't say that there's a direct link between the tax and the warehouse project.

Additionally, it should be noted that the Red Wing Shoes warehouse wouldn't create jobs -- other than construction ones in building the warehouse. Rather, it would allow Red Wing to consolidate its current the five warehouses into one facility. Those warehouses, by the way, employ about 80 people, a number that would not increase with a new warehouse
.

In addition, Rep. Garofalo apparently missed the June 28th Star Tribune clarification on where the tax actually applies.....

Myron Frans, state revenue commissioner, said Dayton has asked him to study the issue, and he has spoken with Red Wing officials about their concerns. He said the tax only applies when the producer or manufacturer purchases warehouse or storage services from another firm.

Garofalo offered no other examples of a potential problem. Thus the Red Wing Shoe factory will NOT be affected by this tax.

In other words, Rep. Pat Garofalo is, as usual, making it up.

I would hope this legislator will someday learn to get the facts right before making another condescending statement of inaccuracy.
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