The Iron Range Resources and Rehabilitation Board would see its governance structure change under new reforms currently attached to House Republican legislation.
The board, comprised of legislators from the Taconite Tax Relief Area, now oversees IRRRB spending of taconite tax revenue. This is money paid by iron mines in lieu of local property taxes.
The IRRRB would become a legislative advisory board under legislation sponsored by Rep. Sandy Layman (R-Grand Rapids), a former commissioner of the IRRRB. The agency itself would stay in the executive branch as the Department of Iron Range Resources and Rehabilitation. (DIRRR?)
Layman’s provision is attached to the Omnibus Job Growth and Energy Affordability bill.
From Layman’s statement:
My legislation is a straightforward way to ensure legislators don’t violate the Minnesota Constitution by serving in two branches – the legislative and executive – simultaneously. Currently, all nine legislators on the board serve in a dual capacity in the executive branch. Put simply: this is unconstitutional. My bill corrects that by making the legislative board advisory and putting it in the legislative branch and retaining the agency in the executive branch.
A prosperous Iron Range serves all of Minnesota. We need to make common sense changes to this influential agency to move toward a more transparent, responsive, effective, and constitutional IRRRB.
State Reps. Jason Metsa (DFL-Virginia) and Rob Ecklund (DFL-International Falls) issued a joint statement opposing the bill.
“We’re disappointed in the direction the Republican bill goes in dismantling the structure of this board. This is a drastic overreach relative to the changes recommended by the Legislative Auditor and will make IRRRB expenditures subject to review by non-Iron Range legislators. No other local property tax dollars are scrutinized this way anywhere else in the state and it’s wholly inappropriate to treat taconite production tax dollars that way either.
“From the local input we’ve heard, this isn’t the approach our constituents want the Legislature to take. We’ve been working on a bill for well over a year that both complies with the Legislative Auditor’s recommendations regarding the IRRRB’s constitutionality while also ensuring proper accountability. As the Range economy goes up and down the work of the IRRRB is critical to maintaining our way of life, and we’re committed to making the necessary improvements so it can do so into the future.”
However, State Rep. Julie Sandstede (DFL-Hibbing) seemed more open to process, taking a broader perspective.
“I have no doubt that with continued work, which we were elected to do, we will come to a reasonable, workable, mutually-agreeable resolution that best represents the residents of the Taconite Tax Relief Area. While we continue to hash out our differences at the Legislature, I think equally important changes need to be made within the agency itself. The process of vetting projects, communication with board members, accountability, transparency and reporting are all issues that rise to the top of my list.
“I fully support economic development and diversification of the Iron Range. As stewards of your tax dollars, we need to ensure that we do not miss real opportunities to grow our economy, while at the same time be ever-watchful for ingenuous companies that seek to serve themselves rather than invest in the communities and people of the Range.
“Often times there is more than one path to the best solution. Change is upon us and the ‘growing pains,’ which I believe if we commit ourselves to, will make us stronger and bring about the economic transformation our communities are seeking.”
The legislative auditor was clear that there is a conflict of interest involving the IRRRB. It seems the hangup is whether the necessary reform keeps the board in the agency, providing advice, or houses it in the legislature, providing advice. The governor and his or her appointed IRRRB Commissioner will have increased power under either reform proposal.
That brings to mind Sandstede’s comment about the operation of the agency. Regardless of the board makeup, the agency needs to avoid entrapment in bad deals built around politically influential local lobbyists and wishful thinking.
Regardless of what happens this session, I have taken to openly predicting major changes to the IRRRB in the event of a Republican governor and legislature. Virtually anything could happen in that event, perhaps even elimination of the agency and the return of production taxes to local governments. A Republican government might not happen in 2018, but it could. That’s why lasting bipartisan reform now would be a wise course of action for Iron Range leaders of both parties.
The IRRRB is an incredibly useful economic development and civic works tool for the Iron Range. Essentially a local agency, it shouldn’t be the subject of partisan attacks but it is. While dominated by DFLers over the years, the IRRRB was a Republican invention in the 1940s. It bears mentioning that the entire taconite tax system is a giveaway to the mining companies in comparison to what they were charged during the heady days of the 1920s and during WWII — the time when the region’s population peaked.
The people of the Iron Range accepted a deal with the Taconite Amendment in the 1960s to keep the mining industry afloat. Politicians of all stripes should remember them first in reforming the agency.