I wasn’t fortunate enough to know former Minnesota District 6 Senator Doug Johnson very well. He retired just a few years after I started working at the newspaper. However, I am very well aware of the legacy this long-time Minnesota legislator left behind through the Northeast Minnesota Economic Protection Trust Fund, now known as the Douglas J. Johnson Fund. This farsighted legislator is the reason that Iron Range Resources & Rehabilitation Board (IRRRB) has been able to grant millions of dollars to businesses in Northeastern Minnesota.
Johnson, and others who established the economic protection trust fund, realized that iron ore was a finite resource. To protect Northeastern Minnesota’s economy, to make sure that it was not dependent solely on iron mining, they created the dedicated fund to grow businesses other than mining in the taconite assistance area.
Johnson not only sponsored the legislation to benefit the Iron Range proper, he worked very hard to see that any areas of Northeastern MN that supported the Range were included in the “Taconite Assistance Area.” Back in 1977, when the economic development fund was created, Taconite Harbor in Schroeder was actively involved in the transportation of taconite. It was a “no-brainer” at the time, but Johnson foresaw a time when that activity might cease.
Through convoluted language, Minnesota Statute 273.1341 ensures that Cook County is part of the Taconite Assistance Area because it was a municipality where there was an electric generating plant that qualified as a taconite facility. That has been a point of contention among some Iron Range leaders through the years, but Johnson’s advocacy ensured that the fund continues to benefit the North Shore.
Over the years, Cook County has benefited from countless grants from IRRRB, from the Doug Johnson and the Taconite Environmental Fund, for everything from a $15,000 grant for a snowmobile club storage building to $20,000 for the Cook County Higher Education campus renovations; to $80,000 for the Grand Marais Senior Center expansion to $450,000 for expansion of the North Shore Hospital and Sawtooth Mountain Clinic.
IRRRB has assisted all areas of the county—$100,000 toward the Grand Marais Fire Hall; $200,000 toward the water treatment system at Grand Portage; $25,000 for 15 miles of improvements along the Gunflint Trail; $19,650 in tourism marketing assistance after the Ham Lake Wildfire; $65,000 toward Lutsen Trailbreakers snowmobile trails; $100,000 and more toward Superior National at Lutsen golf course; $80,000 to Schroeder for infrastructure at Fredenberg Creek housing development; $100,000 toward development and construction of the Tofte Commercial Fishing Museum. And much, much, more.
Unfortunately, the Douglas J. Johnson Economic Protection Trust Fund—the fund designed specifically for business development—is in danger of being severely depleted, possibly destroyed, by recent actions of the current legislative majority.
The IRRRB, established in 1941, oversees use of the trust fund, and its website explains that the agency is funded by taxes levied on the region’s taconite mining companies. Most importantly, no money comes from the state’s general fund.
Approximately half of the agency’s annual revenue comes from taconite production taxes levied in lieu of local property taxes on iron mining companies in the Taconite Assistance Area. The remainder of the agency’s annual revenue comes from interest income, loan repayments and receipts from Giants Ridge, an agency-owned facility.
Because the Johnson Fund has accumulated a trust of $124 million, some legislators believe that these are excess funds that should be used to help reduce the state budget deficit.
Needless to say the legislators that followed in Doug Johnson’s footsteps are furiously fighting this. Members of the “Iron Range delegation,” our legislators Representative David Dill and Senator Tom Bakk among them, spoke at a March 24 press conference. They were united in their outrage.
Freshman lawmaker Carly Melin of Hibbing noted that the cut to the IRRRB fund—$60 million proposed by the MN House or $45 million proposed by the Senate—would take nearly half of the existing account.
Melin said she was “absolutely appalled” that the Republican majority would “steal” from this fund. Because it is a local fund, she said it sets a frightening precedent. She said if this reallocation of a local property tax is allowed, no city, township, or county is safe.
She stressed the impermanence of the resource. The delegation noted that it took 30 years to bring the fund to its current balance. “At the very best it would take us three decades to get those $60 million back…And that is not taking into account that it’s a finite resource and once the taconite tons are gone, they are gone forever,” said Representative Melin.
IRRRB Commissioner Tony Sertich said, “It’s local money and it would be inappropriate to use it to balance the state budget. It’s unfair because they are asking for 70 percent of the cuts to come from the three percent of the population from northeastern Minnesota.”
Representative Dill emphatically reminded his legislative colleagues of the benefit to the region of the Doug Johnson Fund. He said, “Every blacktopped road has some economic impact from this fund.” He listed company after company that had created jobs because of this fund—4,588 since 2002.
The Range delegation also pointed out that this “raid” on the Doug Johnson fund is only a stopgap measure. It won’t fix the budget problem—it will only hurt Northeastern Minnesota.
I’m sorry that this has turned into an ugly partisan debate, that it is pitting northern Minnesota versus southern Minnesota, the metro versus the rural. But it just isn’t fair.
The folks who have worked so hard to sustain Doug Johnson’s legacy should not be penalized because they planned ahead and created a very successful oneof a-kind economic development entity. Northeastern Minnesota should not be singled out to bear a disproportionate share of balancing the budget.
It’s not a done deal. Although the measures have passed in the House and the Senate, Governor Mark Dayton may veto the final bill. If he does, the Northland may continue to benefit from the IRRRB loans and grants. For the sake of our businesses and our overall economy, let’s hope for a veto.
We hang the petty thieves and appoint
the great ones to public office.
Aesop
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