DFLers embrace Pawlenty business tax breaks to reward their districts

In one month, DFL legislative leaders have gone from hating Gov. Tim Pawlenty's signature economic development tax break plan to loving it so much they want to extend it in certain cases.

So why have Democrats put their loathing for Pawlenty's JOBZ program aside this session? Because the jobs bill they plan to pass on Monday calls for extending or modifying it to help land or keep jobs in Duluth and St. Paul, two DFL strongholds.

SF 2568, from Sen. Tom Bakk, DFL-Cook, and HF 2695 from Rep. Ann Lenczewski, DFL-Bloomington, hands out tax boons to different groups and cities in hopes ot creating some jobs.

The most widely discussed parts of the bill are an angel investor tax credit for people or groups that bankroll new business start-ups, a tax credit for small businesses that hire new employees and a tax credit for restoring historic buildings.

Some of the ideas line up with Pawlenty's tax proposal, though he has criticized it for not going far enough in cutting business taxes.

Humorously, for those who have been watching DFLers try year-in and year-out to yank the rug out from under Pawlenty's JOBZ program, this year they've done an about-face and decided to use it to help land a wind turbine manufacturer in Duluth and to make the St. Paul Ford plant a tax-free zone to keep those jobs from leaving.

Some other winners, hand-picked by Bakk and Lenczewski for tax benefits in the bill:

* The Mall of America expansion in Bloomington would get state authorization to use local tax breaks to do a phased expansion.

* Oakdale, East Grand Forks, North Mankato and Cohasset get expanded authority to offer local tax breaks for job creation.

* Urban redevelopers who could access local tax breaks for "compact development districts."

* Duluth would get to use some taconite tax set aside for a biomass energy plant in 2008 to be used instead for a value-added wood product facility.

Watch the Senate Taxes Committee discussion of the bill here.

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