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Anti-outsourcing bill flops at Capitol
by Laura McCallum, Minnesota Public Radio
March 18, 2004

"You're going to win today ... but the people are going to speak on this," Sen. Tom Bakk told opponents. (MPR Photo/Laura McCallum)

A bill designed to prevent the outsourcing of state work suffered a setback on Thursday when it was pulled from the Senate floor after the bill's sponsor says it didn't have enough votes to pass. The bill sparked a nearly two-hour debate on whether the Legislature should try to prevent state consulting work from going overseas.

St. Paul, Minn. — State Sen. Tom Bakk, DFL-Cook, says his bill would make sure that companies receiving state contracts don't send state work overseas. Bakk says he's not sure how widespread the practice is, because state agencies say they don't always know if the companies they contract with are sending some of their work offshore.

Officials with the state Department of Human Services have told lawmakers the department has two contracts that include work in India. Bakk says the state can't require that the work be done in Minnesota, because of the interstate commerce clause, but the state can require that work paid for by Minnesota taxpayers stays in the United States.

"It's difficult to see report after report that we're not growing any jobs, and the fact that we lost 2,000 more jobs last month is troubling. And members, I think this bill is a good start to try and put more Minnesotans back to work," he said.

Some Republican lawmakers questioned whether Bakk's bill is necessary, when there's no evidence that offshore outsourcing is widespread.

Sen. Bob Kierlin, R-Winona, says limiting outsourcing is a big mistake. Kierlin is chairman of the board of Fastenal, which makes nuts and bolts. He says his company needed to redesign some software about ten years ago, and used programmers from India.

"The Indian programmers wrote the code very inexpensively for us, and when we ended up with the finished product, we didn't have a KIA, we had a Mercedes Benz for the same amount of dollars. That type of efficiency in programming allowed the company to expand and grow rapidly as it had," he said.

All 31 Senate Republicans and five Democrats voted for an amendment that removed a major portion of the bill. The provision would have required businesses to report to the state if they eliminated more than 100 jobs and shipped the work overseas. The companies would then have been prohibited from doing business with the state for seven years.

One of the Democrats who voted for the amendment was Sen. Satveer Chaudhary of Fridley, the only legislator of Indian descent. Chaudhary says ever since he spoke out about outsourcing, he has come under attack.

"I've been accused of defending India, I've been told to go back to India," he said.

Chaudhary says if lawmakers want to create Minnesota jobs, the state should put more money into education, training and infrastructure, instead of setting up protectionist boundaries.

"Not a single economist over the course of this debate over the past few months has come out and said that it's good for the economy for us to be a bit more protectionist. That banning outsourcing altogether is going to help our economy."

Chaudhary says while some jobs are going overseas, more service and technology jobs are coming to Minnesota. He says the state Department of Trade and Economic Development reports that 80,000 Minnesotans are employed by foreign companies. Chaudhary proposed an amendment that would have provided more exemptions for companies doing consulting work for the state to send some work offshore.

But before the Senate could vote on Chaudhary's amendment, Bakk asked to table his bill. Afterwards, he said he didn't have the votes to pass it, and he blamed Republicans.

"I'm disappointed, I'm hoping that as the session moves on, some of them will start to think a little bit about their actions today and we can build some bipartisan support," Bakk said.

Bakk says he doesn't expect every Democrat to vote for his bill, but says he doesn't think he would have gotten any Republican votes.

Republican Senate Minority Leader Dick Day says Bakk can't blame Republicans; Day says some members of his caucus would have voted for the bill, but they never got the chance, because Bakk pulled it from the floor.

The bill hasn't had a hearing in the Republican-controlled House.

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