Economic aid in legislative spotlight
ST. PAUL—Minnesota legislators are debating how to best help the state economy with ideas ranging from aiding an industry expand to building out the high-speed internet system.
For Senate Republicans, much of the help comes in the form of private-public partnerships. For instance, their jobs plan would provide tax breaks, infrastructure improvement money and a $4 million loan to Thief River Falls' Digi-Key.
On a broader scale, the same legislation would provide $20 million to help provide high-speed internet broadband services in rural Minnesota locations that have no or little service.
Among job-related items representatives and senators are considering include:
• Appropriating $97 million for the Minnesota Housing Finance Agency, a $4.9 million reduction from the current two-year budget.
• Spending $3.7 million for the Board of Mediation Services, a reduction of more than $1 million from 2016-17. • Approving up to $1.25 million as an incentive to promote jumbo shrimp farms, with eligible producers receiving a payment of 69 cents per pound for up to five years. • Allowing Xcel Energy and several smaller public utility companies to renegotiate or terminate their contracts for electricity produced by burning biomass fuels.
• Prohibiting cities from banning merchants from providing customers with paper, plastic or reusable bags.
• Approving funding under a Sen. Mike Goggin, R-Red Wing, bill to launch a program to help military veterans transition to construction industry jobs.
The House and Senate both would give Digi-Key the largest earmarked aid of any business.
Digi-Key, which produces $2 billion in sales annually, sells electronic parts.
The company already has 3,200 employees, and wants to add 1,000 more with an expansion of costing up to $300 million.
"It's a big deal for my area," Sen.Mark Johnson, R-East Grand Forks, said.
Thief River Falls has about 8,500 residents and already buses workers in from many area communities.
The added payroll with the expansion would be $35 million, with $300 million added to the gross state product, Senate Republicans said.
The legislative package includes a $4 million loan to Digi-Key, which the company would not be forced to repay if it hires and keeps as many workers as planned. Legislation also would provide Digi-Key up to $30 million in tax breaks to build the expansion and give Thief River Falls $1.6 million to improve infrastructure.
LIke the Digit-Key provision, the shrimp subsidy has run into little legislative opposition. However, Rep. Tim Mahoney, D-St.Paul, said Minnesotans should know that the help would be expensive for taxpayers.
Mahoney estimated that the subsidy would cost Minnesota about $150,000 for every job created by the company trying to launch shrimp farms.
Michael Ziebell, president of trū Shrimp, said his company would have a payroll of more than $6 million. "We are building a complete industry."
At least one other Minnesota shrimp farm is near Elgin, in the southeastern part of the state.
Jim Sieben of NovaTech in Willmar said his company, which sells products in 49 countries, would expand so it could provide robotics for the shrimp facilities. He said that his company likely would add 50 to 100 workers, earning an average of $50,000 annually.
When Ziebell was asked if he would return to the Legislature seeking more subsidies, he replied; "We will not at this time."
Broadband funding varies in the three budget proposals on the table.
Dayton suggests spending $60 million, the Senate $20 million and the House slightly more than $7 million.
Miller indicated that he wants to spend more than his bill's $20 million. "Hopefully, we will be able to find more resources."
Communities with little money and little broadband connectivity would especially benefit from Miller's bill, he said. It lowers local contributions the state requires from the existing 50 percent to 35 percent.
The $20 million in Miller's bill would provide broadband to 8,000 more Minnesotans.
Contributing to this story was Chris Steller of Session Daily, a nonpartisan Minnesota House Public Information Office online publication.