Editorial asks necessary questions on Excelsior’s Range dealings

The Duluth News Tribune ran an pertinent editorial today after its must-read, twopart series investigating Excelsior Energy’s Mesaba Energy Project on the Iron Range. Worth reading entirely, here is the thrust:

Questions abound: Why didn’t elected leaders demand more spending scrutiny? Why has Rep. Anzelc been largely alone in waving a red flag? Why did state lawmakers vote to hide from the funds-providing public financial information? Why has there been no effort in the Legislature to provide more transparency, especially during the shutdown when every penny was being squeezed?

And, perhaps most pressing of all to taxpayers, what happened to our more than $40 million?

Why, indeed? I’ve been asking that for a very long time. 


  1. Another reason they, the legislature via Senate File 887, should have taken $60 million away from the IRRRB as they’d threatened to…

    Guys like Rukavina & Sertich act like little Caesars with this ill-conceived fund. All other parts of the state operate just fine through city and county boards.

    No reason the Range couldn’t as well. The IRRRB is another layer of unnecessary bureaucracy.

  2. I don’t know what the theft of $60 million in local revenue when no other part of the state had to give up its local revenue would have solved. Separate issue and indefensible except as a purely partisan bloodletting.

    As for what city and county boards should be able to do, I’ll grant you that that is one way you could administer the money. That’s how it was administered 80 years ago. Problem was then that mining goes where the rocks go and doesn’t care where the people live or the towns are located. Mining revenue was distributed inconsistently and unevenly across the region, giving towns no way to plan or provide consistent services. That is the very reason the IRRRB was founded by a Republican governor back in the ’40s.

    The IRRRB is a bureaucracy. It is not an unnecessary bureaucracy. I am making an argument against an IRRRB decision. That should not be construed as an argument against the existence of the IRRRB.

  3. You mentioned 3M and the taxes it pays to Maplewood…lots of taxes.

    However, most 3M’ers don’t live in Maplewood. They live in White Bear Lake, Hudson Wis., North St. Paul, Lino Lakes, Stillwater, Grant, Cottage Grove, River Falls Wis., Mpls, Roseville, Pine City and many other locals.

    The system works..and without having a Maplewood Resources and Rehabilitation Board, an extra layer of bureaucrats.

    The IRRRB is a “good ole boys” joke. They still send money to Crosby for Gods sake. Can you believe that? Now that’s a joke!

  4. Aaron…
    Here’s a great opportunity to bring up the Excelsior issue. $40 million is real money to most folks. “”All that is necessary for the triumph of evil is for good men to do nothing”

    Lt. Gov. Yvonne Prettner Solon will be on the Iron Range next week as part of her “Bringing the Capitol to Greater Minnesota” tour.

    Prettner Solon will be at the Mountain Iron Community Center on Monday from 5-6:30 p.m. for a “town hall listening session on jobs and economic development.”

    She will be joined by state Rep. Carly Melin, Iron Range Resources and Rehabilitation Board Commissioner Tony Sertich, Minnesota Pollution Control Agency Commissioner Paul Aasen, Department of Labor and Industry Commissioner Ken Peterson, Department of Employment and Economic Development Commissioner Mark Phillips, and Department of Natural Resources Northeast Regional Director Craig Engwall. Residents are encouraged to arrive early to sign up if they would like to speak.

    Prettner Solon also will hold office hours on Monday from noon until 4 p.m. at the IRRRB office, south of Eveleth on Highway 53. To request a one-on-one meeting, go here or call (800) 657-3717. Meetings will be scheduled on a first-come, first-served basis.

  5. I have the notice on Lt. Gov. Prettner Solon and will be posting it tomorrow. I’d love a comment from her about this project and her votes for it.

    I don’t know why we have to keep having this same conversation. 3M pays property taxes to Maplewood. Its employees pay property taxes to wherever they live. And that’s a fine system in most places.

    As you know, the Iron Range is a mining area. As you know, the mines use a lot of land for their line of work. As you know, years ago the mines and local governments, using statutory authority of the state, created a system by which the mines would pay production taxes instead of property taxes. As I just said earlier this evening, the IRRRB was created to ensure that the production tax revenue is distributed and tax rebates administered evenly across the entire region deemed to be affected by the mining economy. If mines paid only to towns they mined near there’d be an unsightly land war between local governments, producing small pockets of prosperity and vast swaths of poverty and ineffectiveness. As bad as things might be now, they’d be infinitely worse under that system.

    You could argue that the money should go straight to schools and cities. Indeed, most of it already does. There are significant other funds administered by the IRRRB for the “rehabilitation” of the Range. Some of these funds have been spent well over the years. Others not so much.

  6. You’re not very convincing. The IRRRB operates like a slush fund. Did you go to or watch their latest meeting last week?

    Slush fund – “Political dealings with slush funds tend to create suspicions of quid pro quo, and can be viewed on the surface as corrupt and subversive of the democratic process.”

    Exactly what you’re saying regarding Excelsior.

    The likelihood of Excelsior happening via the Itasca County Board or Bovey City Council would still be there…but much less likely..

  7. Oh…I have no problem the mining companies paying a production tax vs. property taxes, just don’t pay them to a “third party”, the IRRRB.

    Pay them directly to the city or county in which thay operate. It’d work just fine…

  8. You still need a taconite tax relief area and a way to fairly distribute the tax revenue within it.

    I’d favor more money going to schools and cities than to nonsense like Excelsior. That’s what I’ve said all along. Do I love the governance structure of the IRRRB? Not really. A lot of wasted time and energy. Also don’t like slush funds, but I don’t support giving Range revenue to Minnetonka to prove a talking point.

    I get what you’re saying, but your vision of distribution would not work. Payments to cities and boards should be as direct as possible, but you need a handler to get the money out to the townships and towns that straddle mines but don’t have any.

  9. “But you need a handler to get money to towns that straddle mines”???? Why?

    Why should towns that don’t have economic activity get revenue from those that do? Make no sense whatsoever..

    You’re not only looking for a handler, you’re looking for a handout..

  10. We disagree about the existential meaning of the IRRRB, which is part of our disconnect here.

    A city council makes decisions based on year-to-year consistency and addressing special circumstances which change on the ground. Since so much of the mining production money is designed to replace what councils would have available for infrastructure, it’s often distributed based on need. One town needs sewers in 2012. Another needs a new roof in 2013. A flat rate paid out to towns for development would be great on paper, but would leave some smaller towns out of luck in unique circumstances. There has been a moderately successful (though often overly political) method of doing this over the 70 year history of the agency. Generally, every town has at least one rep or senator going to bat for them on the board and the money usually gets where it needs to go. Usually.

    Separate from all of that is the money for redevelopment of the region. No one council or board can do the business capital programs the IRRRB can do. As big a failure as the Excelsior mess was, there are other examples of success and many experts I’ve talked to say the IRRRB provides what a lot of small towns in other areas crave: ready capital for public/private partnerships. I do think that function is necessary and worthy, though reform is badly needed.

    I do not see this as an all or nothing question as you do. We need the IRRRB. We need the IRRRB to do better than it has here.

  11. In the spirit of compromise, what reform is badly needed? We might agree…

  12. I believe the DJ fund should be divested into a one time, five year program to consolidate and balance the books of local governments like schools and cities. To get the money they’d have to commit to a sustainable budget model for after the end of the program. (Schools would be a big part of this).

    I’d like to see the board restructured but I’m not sure how yet. It’s hard because, as you point out, the large amount of money in the kitty tends to attract as much bad behavior as it does consciousness good government.

    I’d like to see more small loans and grants for existing small businesses and new ones with firm plans and fewer (to no) big risks like Excelsior.

    I’d like to see a large scale program to clear out aging housing stock and replace it with better used spaces as I discussed earlier in the week.

    Most of the mechanism for all this is in place, the only barrier is political. There are those who say that backfilling money lost from state cuts will ensure that the state cuts more LGA and school funds in the future. I see it differently. I think it’s a waste to hold the money, take the criticism for slush funds, and then not ever do anything with it.

    I think we’d agree that this is not the last time the legislature will come after the Johnson fund and that’s it’s only a matter of time before they succeed. I’d rather see that money go into schools and towns for property tax relief, curriculum, facility plans and long term budget stability.

  13. I’d support it, it makes sense. I’d encourage taking the next steps..

  14. This is consistent with my observations since my return. The primary problem, as I have seen it, is a consistent old boy ( And I definitely mean old and male) system with unqualified people repeatedly in charge and using the political system to maintain the status quo, try more of the same worn out ideas and/or enrich each other. For the IRRRB in particular, they have two special laws exempting them from any review, one fiscal as in this case, and one environmental, just recently passed. In short, they have made it legal to operate essentially in secret and to fund whatever they choose, no matter how destructive or financially ridiculous. Their large projects are not financially viable. I see this throughout the Range; an empty, 1,000,000$ city built business building here,subsidized big box retailers there, city built infrastructure to steal another city’s business over there, the range consists of socialism for private capital while ordinary people and the communities disappear. In my more cynical moods, I believe that eliminating almost every white male over 55 might solve our problems. At my most cynical, I hope to leave again, as I am sick of the place being run my drunken buffoons who don’t actually live in town, but spend most of their time at the inherited place on the lake or the country and show up to do nothing, collect their checks and bellow at a public meeting. The problem here is the brains left…the majority of what we have now is greedy white trash with ethnic names

  15. I see it similar to you Miskwaa..but would support Aaron if he, personally, would take action to make changes as he’s outlined.

    Don’t hold your breath though. The Range has plenty of Aaron’s with good, noble ideas but very, very few are willing to take the hard steps to get something done..

    We’ll see if Aaron sets up a time to meet with the Solon to confront her on the Excelsior issue..

  16. I’m still here. Still in the room. Hi. Yes, R47, your nuanced, conditional support is appreciated. I must make hard choices about time every day, between this blog, my community/political work, freelance gigs, my family and young kids, and my actual job. Going to yell at the Lt. Gov. is not on my list, just like going to yell at Cravaack yesterday wasn’t on my list either.

    I’m on the Range, talking about these things, writing ideas and organizing for the long haul. My political orientation is different from yours, so I must work on incremental, internal reforms. I’ll not explain or apologize for the time it takes. I believe my work has illustrated my positions and my sincerity on this matter.

    But really, I don’t know what these kinds of discussions accomplish, R47. half a dozen exchanges and neither one of us has changed our minds.

  17. “Intellectuals” love taking & writing Aaron. And you’re correct, those folks generally leave the world worse off than when they entered it.

    During the 20th century, it is hard to escape the conclusion that intellectuals have on balance made the world a worse and more dangerous place. Scarcely a mass-murdering dictator of the 20th century was without his leading intellectual supporters

    Given the enormous progress made during the 20th century, it may seem hard to believe that intellectuals did so little good as to have that good outweighed by their wrong-headed notions. But most of those who promoted the scientific, economic, and social advances of the 20th century were not really intellectuals in the sense in which that term is most often used.

    The Wright brothers, who fulfilled the centuries old dream of human beings flying, were by no means intellectuals. Nor were those who conquered the scourge of polio and other diseases, or who created the electronic marvels that we now take for granted.

    All these people produced a tangible product or service and they were judged by whether those products and services worked.

    But intellectuals are people whose end products are intangible ideas, and they are usually judged by whether those ideas sound good to other intellectuals or resonate with the public. Whether their ideas turn out to work, whether they make life better or worse for others, is another question entirely.

    The ideas that Karl Marx created in the 19th century dominated the course of events over wide portions of the world in the 20th century. Whole generations suffered, and millions were killed, as a result of those ideas. This was not Marx’s intention, nor the intentions of many supporters of Marxian ideas in countries around the world. But it is what happened.

    Some of the most distinguished intellectuals in the Western world in the 1930s gave ringing praise to the Soviet Union, while millions of people there were literally starved to death and vast numbers of others were being shipped off to slave labor camps.

    Many of those same distinguished intellectuals of the 1930s were urging their own countries to disarm while Hitler was rapidly arming Germany for wars of conquest that would have, among other things, put many of those intellectuals in concentration camps.

    Regardless, it’s still enjoyable watching “intellectuals” argue
    their point..knowing most don’t have the courage (not time) to follow through..

  18. How you go through life with such narrow vision and condescension toward your fellow man is beyond me. Hitler? Really, Bob? Good day. We’re not accomplishing anything here.

  19. Nothing condescending Aaron, just the facts.

    Yep…Hitler. You should read up on him. He was real. The only way for evil to succeed is for good men and women to do nothing..

  20. Characterizing intellectuals as an entire group is the same as doing it to another group. And before you expound on history, you should know a little bit about it. Contrasting the Wright brothers repeated experiments with flight with vaccinations is a fine example of idiot reasoning. One relies on a complete body of knowledge beforehand, ranging from biology to germ theory and required vast amounts of training and cooperation.The Wright brothers required far more intellectual work than you think; a gasoline engine, an aluminum crankcase, spark from that useless and impractical theory of electromagnetism and experiments with wing curvature to find the correct lift. Classifying them as two simpleton rebels who simply put a puzzle together when someone told them not to , thus proving one could fly, is simply a lie. It had required engineering and experiments from others. It also required new materials and fuels which had not been available before all developed by ..hmm experimentation. Or, actually, it shows your ignorance. Marx, writing in 1848, had about as much to do with the 1921-1937 Soviet Union as Ho Chi Minh had to do with the American revolution. Marx’s great work, Das Kapital (Try reading it and Adam Smith’s work sometime)did not advocate a form of government..it analyzed capitalism, and in a way still used and respected today. In fact, the very problems we see now were predicted within his work, i.e. financialization of the economy away from useful production, much like Adam smith wrote about in the Wealth of Nations. I will remind you of all the great non-intellectuals who supported fascism..Charles Lindbergh, Prescott Bush,The Duponts, Thomas J. Watson (IBM) who created the efficiency for the Holocaust…all apparently non-intellectuals and just “doers” and “Businessmen”, unlike Dietrich Bonhoeffer or the German Communists. This is all moot, I know, for I remember this is still true:ei taistella sika, sanat käsitellään paska

  21. Wow…oletko humalassa?

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