© 2011 IRRRB Petion
Governor Mark B. Dayton
130 State Capitol
75 Rev. Dr. Martin Luther King Jr. Blvd.
St. Paul, MN 55155
Governor Dayton:
As citizens of northeastern Minnesota we are writing to express our deep concern on the proposed cuts of $45-$60 million from the Douglas J Johnson (DJJ) Economic Protection Trust Fund. These cuts are inappropriate, disproportionate, and will negatively impact future job creation in northeastern Minnesota.
The DJJ Trust Fund, established 34 years ago, is the largest funding source for the IRRRB. Mining companies do not pay local property taxes. They pay a production tax “in lieu” of the local property tax. This production tax is then collected by the State Department of Revenue and distributed across the Taconite Assistance Area (TAA) which encompasses parts of seven counties, 15 school districts, and over 140 small cities, towns, and townships that have been impacted by mining.
To use any portion of these funds for state purposes would be akin to diverting local property tax dollars in other districts away from their intended local jurisdictions. We know of no other community, or region, that is also being subjected to this treatment of the diversion of their local business property taxes to the state budget. This is just plain inappropriate.
The cut is also disproportionate. The cut from the DJJ Trust is over 70% of the overall reductions considered by certain legislative committees. The TAA’s population is approximately 180,000 Minnesotans. These proposals make a 70% cut on just 3% of the entire state’s population to balance this portion of the state budget. This is being proposed at the same time that many of the communities in northeastern Minnesota have an unemployment rate that is well above the state average.
Finally, this cut would negatively impact the IRRRB’s mission to create jobs in the TAA. Interest from the DJJ Trust is used on a yearly basis to help businesses create jobs. With the proposed cuts, very little interest will accumulate to invest in our local businesses. It is estimated that the IRRRB would be able to only help about 5-10% of the businesses traditionally assisted with the remaining interest earnings.
This interest has helped northeastern Minnesota grow and diversify our economy. Blue Cross/Blue Shield, Delta Dental, Mesabi Nugget, Essar Steel, Minnesota Twist Drill manufacturing, CrossUSA, Premier Plastics and PolyMet are just some of the businesses who have leveraged resources in the DJJ fund. Decreasing this funding source would send a bad signal to other projects on the horizon, and potentially harm the ability to help these businesses grow in Minnesota.
In addition, other proposed reductions to the IRRRB are found in the Omnibus Tax Bill, which would cut an additional $20 million to the IRRRB in the next biennium. These estimated reductions include additional future loss of revenue to the DJJ Trust fund and other economic development accounts.
We ask that you veto any legislation to reduce the DJJ Fund or redirect any IRRRB funds for anything other than their intended use within the Taconite Assistance Area as designated by the IRRRB.
Thank you for your consideration.
Sincerely,