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Bill would benefit state’s printing industry
Posted: Thursday, February 26, 2009 7:08 pm
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Bill would benefit state’s printing industry

County News/File

Rolls of paper stand stacked at Brown Printing Company in Waseca in this 2007 file photo.

By RUTH ANN HAGER

News Editor



WASECA — Minnesota legislators hope to close a loophole they say is hurting the state’s printing companies.

Ten days ago, Brown Printing announced plans to trim 8 percent from its workforce at all three of its U.S. plants. In Waseca, where approximately 1,000 people are employed, layoffs are expected to be in the range of 80 to 100 employees over the next few weeks, according to Harry Popiel, Vice President Human Resources. Popiel said the recession has resulted in a slowdown in the volume of production at Brown, a commercial printer started in Waseca in 1957.

State Rep. Kory Kath (DFL-Owatonna) announced Tuesday that he has introduced legislation designed to protect Minnesota jobs in the printing industry such as those at Brown.




“Last week, we learned that Brown Printing Company, a national leader in the printing industry and prominent employer in our region, is reducing its workforce as a result of the economic downturn,” said Kath. “We need to do everything we can on a state level to support their business by helping them compete in the national printing marketplace.

Kath said he learned that Brown and many other Minnesota printers are dealing with the issue of out-of-state paper that often results in the loss of a job opportunity.

Any chance to strengthen the printing industry in Waseca needs to be taken, he said.

The proposed legislation would clarify state law about whether or not jobs printed on paper shipped from another state are subject to Minnesota taxes, according to the first term legislator.

“Paper costs make up a significant portion of the print sale — this bill is designed to make sure unnecessary taxes aren’t added to that cost.”

According to Kath, 25 states have laws that make it clear that paper shipped in from out-of-state does not establish a “nexus,” or connection, that would result in additional taxation. HF1071 seeks to do the same in order to protect the jobs Minnesota printing companies have due to printing contracts with out-of-state corporations.

“This is bipartisan bill that is intended to resolve the ambiguity in Minnesota tax law,” said Kath. “It is vital that Minnesota printers, such as Brown, be allowed to compete for nation printing jobs.”

In the Senate, the bill is authored by Sen. Tom Bakk (DFL-Cook).

The bill received its first reading and was referred to the Tax Committee.

David Radziej, is president of the Printing Industry of Minnesota, which represents 33,000 employees and employers in the printing business.

“The bill is of interest to us from the standpoint of our customers that come from out of state,” he said. “That’s where the folly is.”

Radziej said when a printer’s client in another state has the opportunity to buy paper directly from the mills, they buy it and put it on the floor of the print plant.

“That would trigger an income tax issue in Minnesota,” he said.

Other states exempt that tax because the only presence of the out-of-state customer is the paper, according to Radziej. Sophisticated print buyers are not coming to Minnesota, but going to Wisconsin or Illinois or another state instead, he said.

“The additional tax is more of an issue now when there isn’t an abundance of work,” Radziej said. “It is keeping the work from coming to Minnesota.”

He said the bill would definitely help Brown, or at least level the playing field.

Popiel said an industry wide concern prompted this legislation although the tax on paper is only one of the factors that a company looks at when choosing a printer.

While it may not lead to an influx in printing, Popiel said, “this law would make printers in Minnesota more competitive with respect to printing operations in other states.”

Good news at the Waseca plant was also announced Wednesday when it was revealed that Brown in Waseca was awarded a multi-year contract in excess of $90 million to print catalogs and circulars for the Army & Air Force Exchange Service, a retailer that serves active duty, guard and reserve members, military retirees and their families.

Popiel said it is important to the company when they can renew a contract and add volume at the same time.

The annual volume at the Waseca plant is approximately $400 million. So even though the AAFEW contract extends over several years, it is a significant order, he said.



Ruth Ann Hager is at 507- 837-5446 or rhager@wasecacountynews.com.
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Member Opinions:
By: onevoice on 2/27/09
I think this could be a step in the right direction.

By: hometowngal on 2/26/09
Yeah...day late and a dollar short.

By: grneyedfool on 2/26/09
Gee how lovely. Tooooo late Brown's just laid off the rest of the people they were going ax.


 
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