Minnesota taconite mines took a haircut Thursday when the Iron Range Resources and Rehabilitation Board voted to chop nearly in half a production tax reimbursement the producers were expecting.
Instead of receiving the $9.67 million tax refund they expected this year, Iron Range mines will get $4.95 million. The remaining $4.72 million will go to pay for public works projects on the Range.
Rep. Tom Anzelc, DFL-Balsam Township, had proposed altogether
eliminating the IRRRB's Taconite Economic Development Fund, the channel through which the reimbursement is made.
"Calling this an economic development fund is a misnomer," he said. "It
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really is a rebate or a reduction in the taconite production tax paid by taconite producers."
Anzelc said it was inappropriate to be offering a tax break to mine operators at a time when they already are enjoying generous
profits. He noted that mines pay production taxes of $2.30 per ton in lieu of property taxes.
"Every class of property taxpayer is looking at an increase in their property taxes this year. The only exception is these taxpayers," Anzelc said.
"It's corporate welfare," Anzelc said, adding that it comes at the expense of all others who pay property taxes.
Sen. Tom Saxhaug, DFL-Grand Rapids, said he liked the idea of redirecting at least some of the money to public works projects throughout the region. But he suggested a compromise, with a share of the money still flowing to mine operators to encourage continued investment in their
Minnesota facilities.
Mines were to receive a tax rebate of 30.1 cents on every ton of taconite they produced in 2010, but Rep. Dave Dill, DFL-Crane Lake, suggested that reimbursement be reduced to 15.4 cents per ton, with the remaining 14.7 cents going to public works projects.
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Dill said he personally would prefer to pay the full reimbursement to mines
but offered the compromise in light of extenuating circumstances.
"This is kind of a gut-wrencher for me," Dill said.
His amendment to Anzelc's original motion passed the board by a
9-4 vote, with Joe Begich, David Chura, Sen. Paul Gazelka and Rep. Carolyn McElfatrick voting in the minority.
Chura said he felt rushed and would have prepared to table the matter.
"We're talking about a pretty significant change, and I'm wondering about the urgency of making a decision today," he said. "I'd like to be able to make a decision based on a discussion with all the parties involved."
Begich favored Anzelc's original proposal to completely do away with the reimbursements that have been provided to mines, rather than the compromise Dill offered.
