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Business goals, Iron Range aid collide in Legislature

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Business and Iron Range interests are colliding at the state Capitol.

Republicans have tied business-friendly changes to Minnesota's unemployment trust fund to a bill championed by Democrats that would extend jobless benefits for laid-off Iron Range workers. Neither party wants their goals to be ignored.

State Senator Paul Gazelka, R-Nisswa, said he's sympathetic to the needs of a region in distress. But he says businesses across the state need to have their concerns met, too.

"Just like you don't want that held hostage, I don't want this other bill to go separate and suddenly be held hostage the same way," he said.

The trust fund, which is drawn on when people file for unemployment, has grown to nearly $1.6 billion. The money comes from premiums paid by businesses, and some pay extra if they have a history of layoffs. 

The plan backed by Republicans and business groups would extend a one-time, $270 million credit to business and add a provision to automatically reduce employer rates if the trust fund grows beyond federal solvency guidelines. 

Democrats want the proposal to be separate from the Iron Range benefits bill.

Senate Majority Leader Tom Bakk, DFL-Cook, says he's prepared to move an unemployment insurance premium break separately and early in the session. But he wants the Iron Range help quicker, given the lagging taconite industry.

Bakk got slightly choked up when he spoke about the 1,200 people from his hometown region who have exhausted their benefits and the 2,000 more who will soon.

"Members, think of it as your family. No money. Don't know if your employer is ever going to go back to work," Bakk said. "Please don't jeopardize this bill with an amendment that takes it down." 

The Senate passed a standalone bill for the Iron Range assistance. Majority House Republicans are moving ahead on a bill that ties the Iron Range extension to the rebate to employers.

Gov. Mark Dayton pledged in his State of the State address to work toward a deal on employer premium relief. But he said he won't look kindly on efforts to jam something through without adequate hearings.

"To hold $29 million of desperately needed unemployment benefits hostage to $272 million in fund cuts is unnecessary," the governor said. "And it's cruel."

There was a similar unemployment fund break when Democrats had full control of state government in 2013. Lawmakers drew the account down by more than $300 million.

Cam Winton, director of energy and labor management policy at the Minnesota Chamber of Commerce, noted that Minnesota's 100,000 for-profit employers pay some of the highest unemployment premiums in the country and one of the lowest unemployment rates, now at 3.7 percent. 

Locking in the change now would give employers confidence to expand, he said.

"So there's a problem in terms of the cost and there's a solution in terms of this extra money that's just languishing in a trust fund," Winton said. "With these prudent reforms we could credit those dollars back to employers so they can buy equipment, hire folks and grow."

Winton argues there would be enough money left over if the economy takes a downturn and safeguards in place to quickly replenish the account. The state's leading business lobby remains flexible about how a change gets done because it also backs the Iron Range worker assistance.

"And if those things happen in one bill, great. If those things happen in two separate bills, great," he said. "We want to see both things happen fast."

As the first of the session's 10 weeks comes to a close, the tussle over the state's unemployment fund is sure to spill over another week.