Gov. Tim Pawlenty was a no-show in Cloquet on Friday to present his proposed $70 million initiative to stimulate rural economic development, but the plan was explained anyway to Northeast Minnesota officials as a strategy to develop entrepreneurship that will help make nonmetro Minnesota an economic player.
The plan, which will be presented to the Legislature in 2008, would require $50 million in one-time bonding for business development infrastructure, redevelopment grants and incubators related to bioscience, which includes anything from human health to development of biofuels. It also will take$20 million from the state surplus to help entrepreneurs grow and provide capital for rural businesses.
Pawlenty has been traveling the state to promote his new initiative, announced in late September, but on Friday his plane was unable to land in Cloquet as scheduled because of a low cloud ceiling.
Commissioner Dan McElroy of the Minnesota Department of Employment and Economic Development (DEED) told a crowd in Cloquet City Hall that the elements of the plan came from discussions and suggestions made at forums throughout the state. Implementation generally will take place at a local level, he said.
The program's elements include:
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* A new office of entrepreneurship within DEED.
* A 25 percent tax credit for regional investors who help businesses and technologies get off the ground.
* A microloan fund that will make loans of $10,000 to $50,000 for new and expanding small businesses.
* Matching grants for entrepreneurs to use research and educational institutions that can help with new products or technologies.
* Revising the JOBZ program. New agreements made before 2015 for businesses in tax-free zones would allow them to be exempt from state and local taxes for up to 12 years in some areas.
* State-backed revenue bonds for small cities for water, sewer, streets and other publicly owned facilities.
In response to a question, McElroy said the program doesn't deal with regulatory reform, but he said DEED does try to help cut red tape. He used the state's environmental standards as an example. Some states have fewer environmental regulations, he noted. "Those states that have fewer regulations don't have the Boundary Waters -- but I wouldn't give up the Boundary Waters," he said.
Rep. Mary Murphy, DFL-Hermantown, who listened to the presentation, said some of the elements of the proposed program overlap existing programs, but she liked the Republican governor's idea of carrying out the initiative through local groups. "What's developed locally has a much better chance of success," she said.
