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Babbitt could get $1.7 million for arena, parks
Babbitt could receive $1.7 million in a tax bill amendment that received criticism in St. Paul on April 18. The amendment was included in Sen. Grant Hauschild’s tax bill that advanced in the Senate Taxes committee.
Babbitt would get $1.5 million for renovations to the ice arena plus $200,000 for ADA compliance and renovations to the city’s parks.
For quite a few years, Iron Range Resources and Rehabilitation has quietly gone about its economic development work, flying under the proverbial radar at the state capitol.
Not so much now. Legislation authored by Rep. Dave Lislegard, DFL-Aurora and Sen. Grant Hauschild, DFL-Hermantown drew plenty of attention to the Eveleth-based state of Minnesota economic development agency Thursday at the state capitol.
A bill that would require Iron Range Resources and Rehabilitation Commissioner Ida Rukavina in 2024 and 2025 to bond for about $80 million in infrastructure and community projects within the Taconite Tax Relief Area (TTRA ), drew plenty of attention in an attimes sharply- pointed Senate Taxes Committee hearing.
Much of the criticism surrounded the bill stepping on economic development work that the Iron Range Resources and Rehabilitation commissioner and staff normally perform.
The bill would redirect money from an Iron Range School Collaboration program to pay for bonds that would help fund about 55 projects in the TTRA from Grand Marais to Chisholm. One project would be funded in Hibbing and none in the TTRA west of Hibbing.
The TTRA stretches from Grand Portage south to Brookston, north to Crane Lake and Kabetogama and west to Taconite, Bovey and Coleraine.
The bills, SF5435 and HF 5198, would also change the name of the Iron Range School Collaboration Account to the Iron Range Schools and Community Development Account, Hauschild said at the hearing.
At the hearing, some northeastern Minnesota community officials said the bill would help move forward important projects in their communities.
Hauschild and Lislegard say Taconite Production Tax money that’s produced at taconite plants near the communities in the bill should be used to benefit those communities, which Lislegard said are poor and in need of help.
But some at the hearing said they have concerns about the bill’s effect on Iron Range Resources and Rehabilitation, its staff, a geographical balance, and a need for more input on the bill from community leaders.
Several Republican Senate Tax Committee members said the bill circumvents some of the work that Iron Range Resources and Rehabilitation and its staff perform, lacks input from other northeastern Minnesota legislators and brings to question why Iron Range Resources and Rehabilitation should exist.
Anne Oelke, Ely Public Schools superintendent, Lana Fralich, Silver Bay city administrator, John Johnson, Itasca County Board chair, and Pete Hyduke, Hibbing mayor, testified on the bill.
Oelke said she appreciates support from Hauschild for Ely Public Schools as it upgrades its campus and athletic complexes.
“Specific to Ely, this grant will help us complete our longplanned facilities upgrade on our 100-year old campus at Washington Elementary School and Ely Memorial High School,” Oelke said.
Th e school district would receive a $250,000 grant to upgrade its baseball field under the bill.
Fralich said the city of Silver Bay strongly supports the bill.
It would help with a major $58 million city-wide roads and infrastructure improvement project that the city does not have the ability to pay for, Fralich said.
A $3 million grant to the city is included in the bill.
“We’re in a difficult need to replace all our infrastructure at one time,” Fralich said. “What we see with this bill is there’s no better way to reinvest those taconite dollars back into a taconite community like Silver Bay who has mining operations of Cleveland- Cliffs Northshore Mining and supporting our community.”
Johnson said while he appreciates Hauschild’s leadership for the region and Itasca County, he has some concerns with the approach taken with the bill.
“First, the appropriation bonds authorized for the named projects in this bill work around an existing structure of the IRRRB commissioner and board,” Johnson said. “I fear that this structure could take discretion over how to best support the economic development in the region out of the hands of the agency and create a precedent that encourages future investments to come through the legislature rather than the IRRRB’s own internal structure.”
Johnson said he’s also concerned that portions of the Taconite Tax Relief Area are left out of the bill.
“If a package like this is going to move forward, we think that work should be done to make sure investments are better balanced throughout the TRA,” Johnson said.
Hyduke said he’s had great conversations with Lislegard and Hauschild about the legislation, spoken with the mayors of Virginia andNashwaukaboutconcernsand common ground on the bill and looks forward to continuing talking more with others about the bill.
“At this time, I look forward to continuing these communications as this bill moves forward,” Hyduke said. “We want our communities to survive and thrive and this happens when we all work together and communicate for the needs of the region. Our motto at RAMS on on the Range is “One Range, One Voice,” and that’s what I believe in.”
The hearing then heated up. Republican Senators Carla Nelson of Rochester, Bill Weber of Luverne, and Steve Drazkowski of Mazeppa, raised concerns about IRRR Board members being accountable to the public for agency spending decisions, IRRRB’s past, communication on the bill with other Iron Range legislators, and whether it’s an election year bill.
Drazkowski asked Hyduke and Johnson about their thoughts on the bill and its impact on Iron Range Resources and Rehabilitation.
Hyduke said he has confidence in IRRR leadership and staff.
“This is change, there’s no doubt about it,” Hyduke said. “But still there is ways that they can move forward and still vet projects, which I think is important. There’s still enough funding within the agency for economic development or housing projects or whatever is in the divisions that those projects will still be vetted.”
Johnson said he greatly appreciates Hauschild’s leadership and at the same time there is already a very successful established team and great commissioner in place at IRRR to establish and vet potential projects.
“I fear that if we do set a precedent where the legislature gets involved in how that happens in directing that funding or directing grants, it might possibly erode that success or create potential issues that aren’t anticipated,” Johnson said.
Drazkowski said after some years of fights and “some corruption and other things that were alleged” at the IRRRB, “the water has been calm in northern Minnesota around the IRRRB.”
“It was problematic for a while and now it seems things are good,” Drazkowski said. “At least there’s not any controversy going forward. My question for you guys is how is the process working at the IRRRB? I’m wondering how it’s going there now? Obviously this bill is coming forward to take away their authority in the form of a bill where the legislature would make the decisions instead.”
Weber took direct aim at the bill, saying many of the projects within the bill would typically fit within a state bonding bill.
Weber said it appeared Hauschild and Lislegard formulated the bill without input from other Iron Range legislators and that it takes away project vetting and funding decisions from the Iron Range Resources and Rehabilitation commissioner and staff.
“The problem I see with this bill is that this is not an IRRRB recommendation,” Weber said. “This bill circumvents the entire process. It gives them no say in vetting the projects or recommending the projects and at this point quite frankly it leads to a question why do we have the IRRRB?”
Hauschild said the agency has a good process, however the Iron Range delegation has in years past introduced 30 to 40 mineral articles, many in a less-public conference committee.
“This is not a new thing,” Hauschild said. “This is what the Iron Range delegation has done for decades.”
Weber said Hauschild is incorrect. “Iwouldsaythatyouarewrong on one point Senator Hauschild,” Weber said. “Typically when we’ve seen proposals come before the legislature in the past, there’s been an agreement among the legislative representatives of the Iron Range. As to contact with the other members, quite frankly most of the rest of them were surprised when this bill showed up. Any discussion to them about these projects has pretty much been in passing and never an understanding as to the scope of this project been discussed or offered to them.”
In the past, the legislature has pretty much gone along with the IRRRB’s investments due to the money coming from taconite taxes paid by Iron Range mining companies that are used to help northeastern Minnesota communities where the money is produced, Weber said.
“This time, it seems like there’s been a plan by a couple of the members of the Iron Range delegation for the communities and no opportunity for the IRRRB to be here to discuss the project,” Weber said. “At the end of the day, how do you justify a process that in the past has worked and has kept the Iron Range members together and not led to the disagreements that I see arising here?”
Hauschild told Weber that Iron Range lawmakers have had differences of opinion and it’s a “pollyanish” view of the Iron Range Resources and Rehabilitation Board to think discussions haven’t historically gotten nasty within the Iron Range delegation.
Hauschild said he could tell stories about past conflicts within the delegation.
“What we’re doing here is presenting a proposal,” Hauschild said. “I am on the tax committee and the representative in the House who is presenting a similar bill is on the tax committee. We are the only Iron Range members sitting on the tax committee and we are certainly open to talking with our other project members to talk about projects, issues, concerns. We will continue having conversations like the mayor and the commissioner mentioned about how we might be able to do better.”
Hauschild and Lislegard’s bill could lead to less bonding bill projects being approved for the area as the bill contains some projects that would otherwise be considered for state bonding, Weber said.
“With this, why would a future bonding chairman consider bonding in these communities?,” Weber said.
Weber and Drazkowski took parting shots at Hauschild and Lislegard as the hearing wound down.
“I would say at this point, the
way this bill has come forward it seems to be more an re-election bill than for the benefit of the communities included in the Iron Range,” Weber said. “There may have been disagreements between members of the Range, but they at least sat down ahead of time and made an effort to work them out, which is another process, I think Senator Hauschild, that you have blatantly forgotten about in this process.”
Taxes Committee Chair Ann Rest, DFL-New Hope, reminded Weber not to engage in personal attacks.
Drazkowski said the bill would upend a process at Iron Range Resources and Rehabilitation that’s been working.
“I struggle with this bill on several accounts,” Drazkowski said. “One of them is that we have a process that’s working on the Iron Range. If you go back in history, there was a lot of problems up there. The people on the Iron Range from what I can see have been working very well over the past few years. The IRRR system has been working very well and there’s robust opportunity for communities to be heard. Senator Hauschild, you said, ‘This is what I think it should be’. That strikes me as an arrogant approach to this process. To have two legislators come in and now say, ‘we know better about what’s happening on the Iron Range now,’ that’s what I heard today. We have a huge bill to make this a Christmas tree and it appears you and Representative Lislegard want to be Santa Claus. We shouldn’t have a bill like this come before us that displaces something that’s working. As Senator Weber said, this is going to cause division in the legislature which isn’t happening right now. I’ve heard from some of the communities and communities are already divided over this bill again. I don’t know where this bill goes now, but it’s a mistake.”
Hauschild represents Senate District 3 which includes the North Shore and large portions of rural northeastern Minnesota.
Lislegard represents House District 7B from Chisholm to the east and south.
The TTRA is defined by where a school district’s assessed valuation of unmined iron ore on May 1, 1941 was at least 40 percent of the assessed valuation of all real property within the district, and the district’s boundaries are within 20 miles of a taconite mine or plant.
