State media makes something from nothing on Keewatin surplus

A story is going around the state on the Associated Press wire that the Iron Range city of Keewatin ran a surplus this year (unlike most other cities, especially on the Range). This is true, but the fact that it’s being trumpeted as being so unusual is a bit misleading. (The story originally ran in my local Hibbing Daily Tribune, but I didn’t relay it here). Local Government Aid cuts are devastating many budgets around the state. Keewatin took a small but proportional hit as well. They were “rescued” by their taconite tax disbursement, which was based on the production tax for the last several years in which the taconite industry was gangbusters.

It is so important for people from outside the Iron Range to know that these taconite taxes are not “extra” money. They are the taxes mines pay in LIEU of property taxes. The amount of money that can be levied off of Iron Range towns is very much less than what a town with higher property value. Also, as a small predominantly bedroom community, Keewatin isn’t exactly a bellwether of the Range of cities in general. Regardless of the surplus now, it will be gone by next year as the second set of LGA cuts hit and the production tax revenue drops. It’s fitting to note that the AP story doesn’t mention that Keewatin Taconite, the largest employer in town, is currently idled with most of its workers laid off or transferred to another U.S. Steel property across the Range. That’s much more impactful than the temporary surplus, which occurred simply because city officials budgeted well. Stories like this only serve as fodder for those in St. Paul who would say it’s all milk and honey up here on the Range, when in fact our population drops every year and our schools are in crisis.