MINNESOTA POLITICS: Economic pessimism affects businesses

ST. PAUL -- Minnesota businesses are like those elsewhere in the country, pessimistic and eagerly awaiting federal action.

The attitude is bound to affect Minnesota politics, a Minnesota Chamber of Commerce survey of business owners and managers shows.

Chamber President David Olson said the survey indicates the 2009 state legislative session, in which lawmakers will write a two-year state budget, likely will be contentious.

"The 2009 session already looms important, especially if the economic downturn continues and there is pressure to raise taxes," he said. "We are likely to see numerous proposals to raise taxes on business, and they could not come at a worse time."

A state budget deficit of $1 billion to $2 billion can be expected, the chambersaud.

More than half of the chamber Business Barometer poll's respondents said higher taxes are the biggest problem their companies face when it comes to trying to create jobs. A year earlier, high taxes were listed as the No. 1 problem by one-third of those taking the poll.

"In a weak economy, we should be looking for ways to strengthen the environment for job creation," Olson said. "It is clear from the Business Barometer that raising taxes would discourage new investment."

Added Todd Rapp, a principal in Himle Horner: "For the first time in five years of sponsoring the Business Barometer, the mood among Minnesota businesses is decidedly pessimistic. Since this poll was taken before recent national financial news, it is likely that concerns have increased this fall."

Revenue forecast

Minnesota leaders will get an update Friday on the state of the state treasury.

A quarterly report is expected to show whether months of instability in the U.S. economy have affected the government's revenues.

The July version predicted that weaknesses in the housing market, higher-than-expected energy prices and an onset of inflation would hurt Minnesota economic growth.

Even so, Minnesota closed its fiscal year June 30 running $389 million ahead of earlier projections. The quarterly reports don't mention state spending. The next comprehensive budget forecast is due in late November or early December.

No AIG worries

Minnesota's commerce commissioner said despite insurance giant AIG's financial problems, policy holders in the state are not in danger.

"The AIG insurance companies are separately regulated by state insurance regulators and do not have the financial stress that AIG Holdings Inc is experiencing," Commissioner Glenn Wilson said. "They are meeting all their financial obligations to their policyholders. Consumers who feel pressured to replace annuities or property-casualty insurance policies because of claims that AIG is under financial stress are encouraged to contact the Minnesota Department of Commerce."

Wilson said some policyholders could face stiff financial penalties if they try to cancel an insurance policy early.

AIG, formerly known as American International Group, says it is paying back a $61 billion federal loan by selling off parts of the company that are not at the core of its insurance focus.

West shut out

The westernmost Minnesota U.S. Senate debate will be in Minneapolis.

A debate that was held Sunday in Rochester will be followed by one in Minneapolis next Saturday, with a Duluth encounter Oct. 16 and two in St. Paul on Oct. 24 and Nov. 2. The three major candidates will participate.

Jesse for Barkley

Minnesota U.S. Senate candidate Dean Barkley of the Independence Party kicked off his air campaign with help from Jesse the Voice.

The two radio commercials feature former Gov. Jesse Ventura, who appointed Barkley to the Senate for a two-month stint after Sen. Paul Wellstone died in a 2002 plane crash.

One spot has Ventura urging voters to pass over Republican Sen. Norm Coleman and Democrat Al Franken and instead pick Barkley. "Ten years ago, we gave the state a wake-up call; now send a shock wave that Congress can't ignore."

In the other commercial, Ventura and Barkley banter back and forth about the financial crisis and how neither major party is willing to address the growing federal deficit. That's a key issue in Barkley's campaign.

The ads will air statewide, according to Barkley's campaign. Unlike Coleman and Franken, Barkley isn't running TV commercials.

Gore for Franken

All Democrats need to do well in next month's election is for voters to consider the state of the country after the past eight years, former Vice President Al Gore said Saturday as he campaigned for U.S. Senate candidate Al Franken.

Ticking off the state of the economy, the decision to invade Iraq, the lack of what he believes is significant government action on climate change and other issues, Gore blamed "the people who have been in charge in the White House and their supporters in the Senate.

"It's time to kick them out of there. It's not that complicated," Gore said at a fundraiser for Franken's campaign and DFL candidates at the University of Minnesota. Organizers said about 1,500 people attended.

Franken, in turn, called Gore "the greatest president we should have had," and said he was running "because 5 million Minnesotans have seen their country veer off track under George Bush and Norm Coleman."

With one month until Election Day, Franken and other Democrats urged DFLers to help register new voters, persuade their friends and neighbors to vote Democrat and get backers to the polls.

Franken leads poll

Democrat Al Franken has a solid lead over incumbent Republican Sen. Norm Coleman for the first time, according to a new poll.

The Minneapolis Star Tribune Minnesota Poll shows Franken leading Coleman 43 percent to 34 percent. Eighteen percent support Independent Party candidate Dean Barkley.

The poll of 1,084 likely voters was done Tuesday through Thursday and has a margin of error of plus or minus 3.7 percentage points.

Coleman led Franken by 4 percentage points in last month's Minnesota Poll.

But this month's poll shows the number of likely voters who see him unfavorably has grown, while the number that views him favorably has shrunk. His job approval rating has slipped to 38 percent -- the lowest ever in this particular poll.

Coleman's campaign spokesman, Luke Friedrich, took issue with that, calling the poll's methodology "flawed.""Minnesotans should take the Star Tribune poll for what it's worth."

A poll commissioned by KSTP-TV and also done this past week showed Coleman leading Franken, 43 percent to 33 percent.

But Star Tribune editor Nancy Barnes defended the newspaper's poll, conducted by Princeton Survey Research Associates International.

"This is an independent pollster who is respected across the country," she said. "It's the same pollster who found the presidential race in Minnesota to be a dead heat last month. All polls have a margin of error, but on the whole, we trust that these results have merit."

McCain coming

Republican presidential candidate John McCain will campaign in Minnesota again Friday.

McCain's Minnesota campaign manager said the senator from Arizona will hold a town hall meeting Friday afternoon in the Minneapolis suburb of Lakeville. Details on how to attend will be released today.

Polls have shown McCain keeping Minnesota competitive against Democ Barack Obama, although a Republican hasn't taken Minnesota in a presidential election since 1972.

Big ag names

The Minnesota Agri-Growth Council is attracting a couple of the country's biggest names in agriculture.

Agriculture Secretary Ed Schafer, a former North Dakota governor, highlights the group's Oct. 30 meeting in St. Paul. Also on the agenda is U.S. Rep. Collin Peterson, D-Minn., who chairs the House Agriculture Committee. Minnesota Gov. Tim Pawlenty rounds out the big-name list, although several other agriculture leaders also will talk to the organization that advocates for the state's food and agriculture industry.

By the way, don't expect Peterson to tell the council that he hopes to be agriculture secretary if fellow Democrat Barack Obama is elected. He recently said, again, there is "no way" he would take the job if offered. "I am not interested."

In many ways, Peterson's chairmanship provides him with more power. And it certainly allows him more freedom to speak his mind than he would have working for a president.

State Capitol reporter Scott Wente and The Associated Press contributed to this report. Davis and Wente report for Forum Communications Co., which owns the Herald.