Political storm over IRRRB project rumbles on

bandiera MinnesotaToday, the Star Tribune‘s Jennifer Bjorhus follows up her Sunday story about IRRRB funding for a failed, then resurrected, Democratic telemarketing firm.

This story focuses on state law’s that allow such transactions, even if they “smell bad” to the general public.

Minnesota Legislative Auditor Jim Nobles said he would examine the loans made by the Iron Range Resources and Rehabilitation Board (IRRRB) to Meyer Associates following a Star Tribune story about the deal on Sunday. But state law is “surprisingly sketchy” on the topic of using public funds for partisan political activity, Nobles said.

I’ve cautioned local lawmakers against deals like these and believe the agency should stop doubling down on failure in cases where personal relationships or a sense of “sunk costs” exist. That said, it’s interesting to me that this Meyer deal is becoming the showcase for IRRRB scrutiny. The $9.5 million that went to Excelsior Energy for its failed Mesabi Energy Project was at the center of a much seedier and conflict-of-interest-driven deal than this one.

Once again, though, we see reactions from Republicans that are essentially “shut down the IRRRB.” What many critics fail to understand is that, even though the IRRRB badly needs reform in my opinion, it is a function of state government only because of political considerations related to taconite taxation. Mines pay taconite taxes in lieu of local property taxes (i.e., mines don’t pay any property taxes), which means that the revenue generated should be compared to local revenue, not state revenue. That’s not to condone misuse or wasteful spending, but it’s a fact of the situation.

“Shutting down” the IRRRB means finding a new method to employ regional economic development, a process that would simply lead to a different kind of IRRRB under a new name.

Keep the mission. Reform the process. Develop a real strategy for economic diversification.


  1. The IRRRB gives ammo steady to those who want the taconite tax going into Minn general fund. This is just another bullet. Many of us up here want the IRRRB working for Range interests and bringing jobs but need it to have some credibility. I’m amazed that the Meyer/IRRRB venture is not the last straw. What will it take to make a change to the IRRRB? One thought, have business men run for seat on the board, like a school board, give them 2 or 4 yr terms and then we can either vote them in or out on their productivity. Have one local DFL and GOP guy appointed by their parties. Somethings needs to be done to give credibility to the IRRRB, not just putting funds in a trust so it can’t be taken by the State.

  2. The production tax is about four times the occupation tax. The amount that just the IRRRB has to hand out is comparable to the entire occupation tax. The occupation tax is at a concessionary rate compared to the regular state corporate income tax. You can manipulate the production tax and occupation tax rates and get entirely different results than currently obtain.

    The conclusion is inescapable that the Taconite Relief Area (when will it ever be relieved?) benefits disproportionately from mining activity in Minnesota. The Range wants to take hundred million dollars out of the Doug Fund and offshore it in a private nonprofit, with no agency oversight or approval of the state’s executive to spend money. Nobody to manage the fund’s investments (I am talking about prior to loans or grants: just the money in the bank, so to speak), and nobody, as far as the IRRRB resolution says, who will be a fiduciary for that money. It is charitable to call this entire scheme merely ill-considered.

    I have an idea Rangers. We’ll form the Twin Cities economic area, cut the corporate income tax rate on local manufacturers, and levy a special substitute tax for use just for the metro area. Well put Scott Dibble, Sandy Pappas, Jim Davnie, and Paul Thissen in charge of the fund and making disbursements.

    I like it.

    • Though the IRRRB needs to do better, I know a lot of people from here who would actually like to take the above idea a step further and just be “North Minnesota” or something. In the 1980s, my grandparents used to tell me, “People in other parts of Minnesota hate the Range.” I would laugh and tell them they were being silly, and that no one from any other part of the state probably cared about here one bit. As I get older, I understand more of why they may have thought that.

    • Independent says

      Twin Cities economic area, please. After spending 15 years in the Twin Cities metro working for a government entity and finally escaping back home to the Iron Range and the private sector a few years ago I can tell you the phrase “cutting taxes” and “Twin Cities area” is one you’ll never hear. The only politicians that can blow money more recklessly than a Ranger is a Metro. I do remember the obscure Northern Minnesota secession talk with a Duluth capital… that would have be interesting.

  3. Taylor Johnson says

    I think that allowing the people of the taconite relief area to vote on a board similiar in structure to a county board would be a good step. Make their terms two years, part time positions. If there is no hope for savin the IRRRB, then allow the county, towns, and school districts to levy property taxes and scrap the production tax all together.

  4. I don’t dislike the Range or northern Minnesota at all. Because of the sulfide mining business, though, I’ve had the occasion to consider the IRRRB a lot more. For an organization that was supposed “rehabilitate” and diversify the region, it is has done a pretty miserable job. A lot of the money received by the IRRRB winds up back in the hands of the mining companies through its “funds.” And that fact is hardly transparent. It seems that helping the mining companies make capital improvements doesn’t really increase employment, either. Haven’t mining jobs declined steadily over the years?

    The IRRRB also gives its uncritical and full-throated support to sulfide mining, an activity that is clearly different than iron mining, far riskier to the environment in many ways. This is the thing that really chaps my hide.

Speak Your Mind


This site uses Akismet to reduce spam. Learn how your comment data is processed.