Iron Range board creates nonprofit to protect money from legislators
The Iron Range Resources and Rehabilitation Board has unanimously approved a plan designed to protect a trust fund from potential state raids.
A state economic development agency on the Iron Range, the board is funded by a portion of the taconite production tax, paid by iron mining companies in lieu of local property taxes. Since 1977, the IRRRB has put some of that money into the Douglas J. Johnson Trust Fund, which has since grown to $139 million.
In 2011 the state Legislature voted to take $60 million from the fund to help balance the state's budget. Gov. Dayton vetoed the provision, but IRRRB commissioner Tony Sertich said it showed the fund is at risk.
"If this fund stays as it currently is, as a part of state government, it's not a matter of if the money will be taken," Sertich said. "It's a matter of when."
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Senate Majority Leader Tom Bakk, a member of the IRRRB, agreed.
"This threat is way more real than you know," Bakk, DFL-Cook, told the board. "I never say never, but we will never hold this money going forward."
Over the past two years Sertich has led an effort to devise a way to protect the trust fund from another potential state raid. A task force recommended the creation of an independent nonprofit to manage $100 million of the fund. The nonprofit, which Sertich called the Range Trust, would enter into a contract with the IRRRB.
The Board must pick trustees, adopt bylaws, and approve a contract with the new entity before the money will be transferred.
Proceeds from the new fund will be allocated to private economic development projects on the Iron Range.
State Rep. Tom Anzelc, DFL-Balsam Township, said he supports the plan, but has concerns about whether those economic development projects will succeed in diversifying the Iron Range's economy beyond its longstanding mining industry.
"My hope is that this initiative is going to get us better outcomes," he said, "and more private sector entrepreneurship and job creation that diversifies the economy."