Lawmakers expected to fund infrastructure, economic development projects on Iron Range
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Sen. Grant Hauschild, DFL-Hermantown, watches as Rep. Dave Lislegard, DFL-Aurora, fires up a crowd on Friday, July 21, 2023, at a rally for striking UPM Blandin paper mill workers in Grand Rapids. Photo by Lorie Shaull.
A swing-district Iron Range Democratic lawmaker is driving an effort to create a special pool of financing for Range-only infrastructure projects.
The tax omnibus bill, which House and Senate DFL leaders have been negotiating in conference committee this week, contains provisions to direct mining revenue to projects on the Iron Range.
Rep. Dave Lislegard, DFL-Aurora, wants to see his district in the eastern range, which generates around 60% of the tax revenue from taconite mining, receive more investment.
Instead of paying property taxes, which fund schools and local governments, mining companies pay taxes based on production; that money goes into funds governed by the Department of Iron Range Resources & Rehabilitation — part of the executive branch — and advised by a group of Iron Range lawmakers. From there, the mining production money is distributed across the Range — legally defined as the taconite assistance area — to replace the lost property tax value.
Lislegard and other Democrats, including House Taxes Committee chair Aisha Gomez and Lislegard’s fellow eastern range Rep. Robert Skraba, authored legislation this year to use taconite production revenue to issue bonds for dozens of projects. In the Senate, DFL Sen. Grant Hauschild of Hermantown carried the legislation.
The bill (HF5247) would effectively create a new bonding structure for the Iron Range, outside the Legislature’s every-two-years bonding package, which pays for construction projects all over the state.
(As of Friday afternoon, lawmakers were still negotiating on a statewide bonding package, which requires Republican votes to reach a necessary supermajority threshold and must meet a Sunday night deadline.)
For Lislegard, the new Range bonding pool is about fairness.
“Our money needs to stay where the money is generated … in the communities and the people who need it most,” he said.
If signed into law, the legislation would direct the IRRRB to issue $80 million in grants over the next two years through the Douglas J. Johnson economic protection trust fund, which is a taconite mining fund named after the legendary Range legislator.
The proposal has faced criticism from some lawmakers concerned that the projects will not receive sufficient oversight.
By naming specific projects and funding levels, the bill bypasses the IRRR and its board, said Rep. Spencer Igo, R-Wabana Township, during a floor debate on the bill. Igo’s district borders Lislegard’s.
Lislegard said many of the project leaders have been seeking funding from the IRRR or the state’s standard bonding process in recent years. Lawmakers visited the Minnesota Discovery Center, Giants Ridge Recreation area and public works facilities in Chisholm and Tower — all named in the tax bill — on a tour of potential construction projects in September 2023.
IRRR Commissioner Ida Rukavina said in a statement that each recipient must submit project plans to the agency for approval before the money is distributed.
The Iron Range is known among Minnesota politicos for its clubby, tight-knit political culture. Rukavina is the daughter of the late longtime DFL lawmaker and St. Louis County Commissioner Tom Rukavina. Two well-known northeast Minnesota lobbyists — Jeff Anderson, who was chief of staff to former DFL U.S. Rep. Rick Nolan, and Gary Cerkvenik — represent many of the government entities and nonprofits set to receive money from the bonding projects.
If signed into law, the provision would be a windfall to local governments and nonprofits in one of the areas at highest risk of flipping from Democrat to Republican in upcoming elections, as the traditionally Democratic Iron Range has become increasingly red in recent years.
The bill would direct money to projects like water and septic system repairs; upgrades to public parks and trails; and school improvements and expansions.
Some of the projects include:
$3.6 million to the Mesabi Fit Coalition for the renovation and expansion of the former Mesabi Family YMCA in Mountain Iron.
$10 million for improvements to the Giants Ridge Recreation Area, including a new welcome center and the repair or replacement of the chair lifts and irrigation systems.
$2.25 million to Cook County for a new county solid waste transfer station and to preserve affordable senior housing units in Grand Marais.
$10.2 million to the Minnesota Discovery Center for building upgrades, including HVAC system and compliance with the Americans with Disabilities Act.
$6 million to the city of Silver Bay for water upgrades, streets and sidewalks.
$600,000 to School District No. 2142 in St. Louis County for septic system upgrades at South Ridge School and cafeteria renovations at Northeast Range School in Babbitt and Tower Elementary School in Tower.
$200,000 to Save Our Ship, Inc., which is working to restore and display the Leif Ericson Viking Ship.
$100,000 per year from 2025 to 2027 for the Northern Lights Music Festival, a classical music festival in Gilbert.
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