Getting politics out of IRRRB? Not so easy

PHOTO: Aaron J. Brown

With another legislative session approaching, we see new attention paid to the ever changing Iron Range Resources and Rehabilitation Board (IRRRB). The IRRRB now finds itself enveloped in the recently renamed Minnesota Department of Iron Range Resources and Rehabilitation.

Earlier this week, a southern Minnesota Republican raised concerns about the creation of a new trust to manage the Douglas J. Johnson Economic Development Fund, long a political football in state budget politics.

Of course, this rips the Band-Aid off an old wound, the often bitter argument between those who contend that the IRRRB is a regional “slush fund” and those who acknowledge that the agency’s funds — while nominally “state dollars” — actually come from local iron mining production tax revenue. Thus, the IRRRB stands as a regional agency that happens to be operated by the state.

But the DFL dominance of Northeastern Minnesota has waned. The IRRRB now features a slim 5-4 DFL majority. Further, the advancement of recommendations from a recent nonpartisan audit have made the board more advisory in nature, giving the bulk of the power to a commissioner appointed by the governor.

So the board is statutorily weaker, more politically mixed. One Republican governor under this new system and much could change at the IRRRB. And while that may not happen in 2018 it certainly will happen eventually.

That’s causing board members to wonder how to ensure that future partisan fights won’t rob the region of funds that belong to the people of the Iron Range. As recently as 2011, GOP lawmakers have sought to use dedicated regional funds to pay for state budget shortfalls.

So the scene is set. The IRRRB will meet this morning to review a number of outstanding issues. They’ll finally look at the school consolidation fund issue that I wrote about last month. Of course, various projects are moving through the works. But in addition, they’ll address this enormous political topic: the creation of a nonpartisan trust to oversee the Douglas J. Johnson Economic Development Fund, a pot of money now worth about $175 million.

The purpose of the Johnson fund is to pay for economic diversification projects to wean the Iron Range region from dependence on mining. Of course, that’s tricky business subject to great interpretation. The highly political environment that has surrounded the IRRRB only makes it more difficult to predict.

Fundamentally, moving toward a private trust model would provide a more consistent, less politically-motivated set of rules to be applied to the award of loans and grants. In essence, you could *remove politics* from the IRRRB.

But are the players involved — DFLers and Republicans alike — truly willing to commit to an apolitical IRRRB? Will highly influential local political power brokers allow their projects to compete on a level playing field with other projects?

As a matter of policy, they should. If the agency is to survive the shifting “all or nothing” political landscape of our times, both parties must embrace the agency’s mission. Further, we must introduce a blend of big picture strategy with market-based reality in the use of the IRRRB’s multi-million dollar economic development trust.

My friend Chuck Marohn and I talked about reforming the IRRRB in our “What Works” series on our podcast Dig Deep. The episode will air Friday, Jan. 26 on Northern Community Radio and be released later that day on the podcast.

It might be interesting to compare what we say to what the board discusses later today.


Comments

  1. IRRRB money should stay within NE Minnesota, but more and better oversight is necessary. The record of the IRRB in terms of return on investments is very underwhelming.

  2. Technically it is state tax money, but remember that most of it is in place of local property taxes on the mining facilities. It should not be available to a state driven raid, any more than property taxes on Medtronics or 3M facilities in the Cities or Mayo Clinic facilities in Rochester.

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