Some on the Iron Range are afraid a plan making its way through Minnesota House committees could become taxation without representation.
Legislation a House committee approved 9-7 Tuesday would replace the Iron Range Resources and Rehabilitation Board with a new commission with less power and a majority of members who would not need to live in northeastern Minnesota. The bill has to pass at least one more committee before reaching the full House.
Rep. Tom Anzelc, D-Balsam Township, told the House committee that removing IRRRB decisions from Iron Range residents “is extremely significant and unprecedented.” Other Iron Range lawmakers said they agreed.
Money the board now spends generally comes from taxes on taconite mining that are levied instead of property taxes that are paid by most Minnesota businesses. Anzelc said that since the production tax replaces property taxes, local Iron Range governments should have the same say in how the money is spent as governments elsewhere decide on property taxes.
“This is the property wealth of northeastern Minnesota,” he said. “It should not be spent by anyone other than people who live along the iron ore foundations, the people whose futures depend on this industry and this economy.”
The Rep. Tom Hackbarth, R-Cedar, bill “would take all of that away,” Anzelc said.
IRRRB members now make some spending decisions, which Legislative Auditor Jim Nobles says may violate the state Constitution.
Senate Majority Leader Tom Bakk, D-Cook, is pushing a provision through the Senate that removes spending power from the board, turning it into an advisory-only body. It would make recommendations to the IRRRB commissioner, who the governor appoints.
Anzelc said the commission Hackbarth would create could spend Iron Range money anywhere in Minnesota. That is not how taxes from taconite are supposed to be spent, he said.
“This bill does not touch any of the money that goes to local units of government…” Hackbarth said. “I am committed to the fact that this money is to stay on the Iron Range.”
The IRRRB spends some of the taconite tax money on economic development projects, which Anzelc said could be threatened.
Hackbarth said he introduced his bill to provide “some transparency and some accountability” after the legislative auditor found a lack of follow-up on how money is spent.
IRRRB Commissioner Mark Phillips called some of those follow-ups “inconsistent.” However, he said, all spending decisions are made in public and can be tracked.
Hackbarth’s legislation would establish a commission composed of three senators, three representatives and three public members. While the three public members must live on the Iron Range, there are no such requirements for lawmakers.
The agency commissioner would have authority to make decisions, as allowed by the governor, but the commission would not have that power unless it votes unanimously to provide money to the commissioner for urgent needs.
The Hackbarth bill also would require the Iron Range agency to consider selling Giants Ridge resort. Giants Ridge includes two golf courses, ski resort, convention center and other facilities.
