House Republicans are proposing to mitigate cuts to jobs and workforce programs by taking money from an Iron Range trust fund, but some DFL members don’t approve.
Sponsored by Rep. Bob Gunther (R-Fairmont), HF1049 is the omnibus jobs and economic development finance bill. It would provide funding for the Department of Employment and Economic Development, Housing Finance Agency, Department of Labor and Industry and a number of smaller agencies.
The bill would cut General Fund spending on those agencies’ programs by more than half over the next two fiscal years. The House Jobs and Economic Development Finance Committee took testimony on the bill, and is scheduled to act on it later this week. (View the bill and its supporting spreadsheet online.)
To partially compensate for the $86.7 million cut from the General Fund, the bill would use $76.3 million in one-time revenues. The largest of those – $60 million – would come out of a transfer from the Douglas J. Johnson Economic Protection Trust Fund, which funds economic development projects on the Iron Range.
Money for the fund comes from Iron Range mining companies, who pay a production tax in lieu of property taxes. Tony Sertich, commissioner of the Iron Range Resources and Rehabilitation Board, said taking money out of the fund amounted to balancing the state’s budget using local money.
“What your asking is for 70 percent of the cut in the jobs area to come from about 3 percent of the state’s population… I think that is quite disproportionate,” Sertich said.
A heated debate followed, during which several DFL members denounced the provision as unfair. Gunther replied he did not want to use the trust fund money, but had no choice.
“I didn’t relish to see that this was on my plate to balance the budget,” he said.
When all the one-time transfers are taken into account, the bill amounts to a roughly 6.2 percent cut from forecasted base spending. Gov. Mark Dayton proposed a cut of less than 1 percent. The next hearing is scheduled for Thursday, March 24, at 12:30 p.m.