(originally published on May 18, 2011)
In yet another attempt to avoid public scrutiny, the Republican-controlled House of Representatives passed the Omnibus Tax Bill (HF 42) during the wee hours Wednesday morning. The Republicans do in fact have ample reason to be ashamed of the bill, for it contains onerous provisions that directly target the people of the Iron Range. One would pilfer $60 million from the Douglas J. Johnson Economic Protection Trust Fund, a business development fund that derives its revenue from the tax on production of taconite paid by the mining companies in lieu of property taxes. And apparently stealing Range property tax revenue isn’t enough for the Republicans, for another provision takes aim at reducing the taconite tax by freezing it at levels when the demand for steel was low. IRRRB Commissioner Tony Sertich estimates that the agency will lose approximately $20 million in the next biennium as a result, money that will not be available for economic development and diversification of the region’s economic base.
In other words, the Republicans are requiring just three percent of the state’s population to give up their property tax revenue and to disproportionately fund the state’s budget reductions while at the same time making a significant cut to that same revenue stream and guaranteeing the region’s major industry windfall profits as it removes a non-renewable resource.
The Iron Range Delegation sent the following letter to Governor Mark Dayton urging him to veto HF 42:
We the undersigned members of the Iron Range Delegation of the Minnesota Legislature, are writing to call your attention to the following provisions of the omnibus tax bill that punish the Iron Range.
First of all, the Republicans confiscated our local property tax by taking $60 million from the Taconite Economic Protection Fund. As you know, Article X Section 6 of or Constitution clearly states that taconite production taxes are in lieu of local property taxes. Secondly, they froze the escalator which was agreed upon with the mining industry at the time when taconite pellet prices are at an all time high. Governor, the mining companies’ profits are at record levels. Finally, they eliminated the small amount of money that we appropriated in statute for the Range Association of Municipalities and Schools (RAMS) and the Hockey Hall of Fame in Eveleth, both of which are very beneficial to the people of the Iron Range.
Clearly, Governor, the attacks by the Republican Majority on all the DFL areas of the state are an embarrassing way to govern and set a new low in public policy for the state of Minnesota.
We respectfully request that you veto the omnibus tax bill and ask that you mention our issues in your veto message.
Republican Rep. Carolyn McElfatrick of Grand Rapids is the only member of the Iron Range Delegation who did not sign the letter. McElfatrick did, however, previously join the Delegation in denouncing the raid on the DJJ fund.
On Tuesday’s edition of MPR’s Midday program, Governor Dayton clearly voiced his displeasure about the assault on the Iron Range’s economic development fund:
It’s terribly wrong and it’s unacceptable.