Testimonies Continue At Capitol For DJJ Fund

By KBJR News 1

May 6, 2011 Updated May 6, 2011 at 8:55 AM CDT

St. Paul, MN (Northland's NewsCenter) - The fund is being targeted in several proposals, all hoping to help balance the state's massive budget deficit.

Fair treatment; no better, no worse than any other part of the state.

That was the argument made by Iron Range Resources and Rehabilitation Commissioner Tony Sertich at an early morning hearing in front of a legislative conference committee.

"When this law was originally established they promised not to take the money in the first place and here they are taking the money today," said Sertich.

A fund created to help diversify a heavily mining-reliant economy in northeastern Minnesota, is currently being eyed by both the senate and house as a way to balance the massive state budget deficit, something both the commissioner and local lawmakers say is inappropriate and unfair.

"It clearly states in the Minnesota constitution that taconite taxes are in lieu of property taxes. This argument that these some how aren't local property taxes is absolutely false," said Representative Tom Rukavina.

"This is no different than anyone else's property taxes and if you're going to take our property taxes then you should take everyone else's property taxes to settle the state fund," said Senator Dave Tomassoni.

Commissioner Sertich pointed out to the conference committee that if the proposals go through, the IRRRB would only be able to help around 5 percent of the businesses traditionally assisted by the fund over the years.

60 million dollars is the proposed reduction from the house proposal, while the senate's is 45 million.

The proposed 45 million dollar cut from the senate side has provisions in place to pay the money back over the course of a few years, but commissioner Sertich says he's still not comfortable with that.

"You cannot bind the hands or make a commitment for a future legislature. They want to pay it back five years from now; there is no guarantee to keep that commitment there, to keep that promise," said Sertich.

And with just days left in the legislative session, range lawmakers say they stand firm on keeping the money on the range.

"Rochester doesn't take 10 million dollars out of the Mayo Clinics Property taxes and put it into the general fund to settle the debt. The Iron Range should not be paying their property taxes. I don't believe this is money that should be negotiated with," said Tomassoni.

Commissioner Sertich says a third reduction to the fund still looms in this legislature.

At a time when mining companies are producing at record numbers, the Tax Committee is proposing to cut the taxes paid by mining companies.

Sertich says that would bring an additional 20 million dollars in cuts against the agency.