Greater Minnesota officials seek apartment-building aid

Greater Minnesota leaders say that apartment houses may be the answer to their housing shortages.

The Greater Minnesota Partnership and Coalition of Greater Minnesota Cities propose a state program to give grants and tax credits to companies willing to erect apartment buildings in cities without enough housing for jobs already available.

“There is not the ability of the private sector to respond,” Rick Goodemann of Southwest Minnesota Housing Partnership said. “It’s a complicated problem.”

Rep. Rod Hamilton, R-Mountain Lake, chief author of a bill designed to help fix that problem, said that greater Minnesota’s economy cannot grow unless there is more housing for workers.

“We should have done this a long time ago,” he said.

The problem is that businesses from AGCO farm equipment maker in southern Minnesota to Digi-Key in the northwest have jobs open, but struggle filling them. Even if they can find workers, there often are no homes available nearby.

It is a different problem than a shortage of homes for low-income Minnesotans, said Dan Dorman of the Greater Minnesota Partnership and a former state lawmaker. The apartments need to be for workers in decent-paying jobs, he said, which is what many manufacturers and others have available.

After the financial crisis hit in 2008, Goodemann recently told a House committee, state policy shifted to preventing foreclosures and homelessness, and preserving the state’s aging stock of existing affordable housing. That came with less emphasis on building new housing, leading to what he termed “a broken market.”

“It’s a real challenge,” City Administrator Larry Kruse of Thief River Falls said.

The city’s multifamily housing stock is old and new construction is expensive to build. The city does not want a lack of housing to limit job growth, Kruse said.

In Kruse’s community, Digi-Key employs 3,200 people and would like to hire 250 more but has expanded operations in Fargo, N.D., instead of Thief River Falls.

In many border areas, such as near Hamilton’s southwestern Minnesota district, workers are imported from nearby states. “We want them here,” Hamilton said.

Hamilton’s bill and one by Sen. Dan Sparks, D-Austin, in the Senate would:

— Provide a tax credit for all or much of the apartment construction cost for small investors.

— Allow a 30 percent tax credit for larger investors.

— Give grants for building greater Minnesota apartments, as long as the developer provides as much money as the grant.

The rural groups want $100 million in the next two-year state budget, $60 million to cover the tax credits and $40 million for grants.

The program would be limited to communities with little available rental housing and open jobs.

Nearly 2,000 apartments could be built in two years, said Chris Henjum of the partnership.

The bill requires that apartments be built where roads, water, sewer and other infrastructure already exist.

Hamilton said he thinks people would move into the new apartments, but soon would buy houses. That would leave apartments available to new employees, he added.

Backers of the Hamilton bill said that once some apartments are built, private investors will build more.

“It’s just a start,” Tim Flaherty of the cities’ coalition said of the apartment bill.

Moody’s, a company that analyzes the state’s economic health, said in a report that “Minneapolis is positioned to thrive. The rest of the state, meanwhile, has struggled with unsteadiness in manufacturing and agriculture.”

Chris Steller of the nonpartisan Minnesota House publication Session Daily contributed to this story.

Loan forgiveness could attract health professionals to rural areas

Rural Minnesota is short of medical professionals, and many health advocates are lining up behind a proposal to partially forgive student loans of graduates who practice in rural areas.

“This can bring needed resources to our rural and frontier communities,” Shauna Reitmeier of Northwestern Mental Health Center in Crookston told a Senate committee Wednesday before members unanimously approved a loan forgiveness bill.

Several other committees must consider the bill before it reaches a full Senate vote.

Dr. Sarah Eisenschenk, who grew up near Avon, Minn., said she plans to locate in rural Minnesota once she finishes her residency. She will face more than $200,000 of school debts, she said, and a loan forgiveness program “will certainly influence my decisions.”

State Sen. Greg Clausen, D-Apple Valley, is the sponsor of the Senate Democrat’s third highest priority bill, one to expand the current medical professional loan forgiveness program.

“We are not keeping pace with workforce needs,” Clausen said.

While doctors, dentists and pharmacists are among those who can get loans forgiven now, the Clausen bill adds mental health professionals, public health nurses and dental therapists to the list. The senator said the addition would provide another 60 professionals to rural Minnesota.

Existing loan forgiveness provisions would get more funding, enough for 280 other medical professionals to receive loan help.

The Clausen bill would provide $3 million a year for the loan forgiveness program.

Mark Schoenbaum of the Minnesota Health Department said that the federal government designates “almost the entire state” as underserved by mental health professionals, dentists and primary care doctors, especially in rural areas with some in the inner cities of St. Paul and Minneapolis.

Existing loan forgiveness programs that are more limited than what Clausen proposes show that the concept “does fairly convincingly attract medical professionals to the locations they are most needed,” Schoenbaum said.

Several people testifying to the committee urged Clausen to expand his bill to include more health professionals.

Also Wednesday, a state Health Department report indicated that immigrant doctors are not being well used to serve primary medical care, especially in areas where doctors are in short supply.

A task force that studied the situation since July reported that doctors from other countries “would help with increasingly urgent policy issues, such as a physician shortage, an aging population, persistent health disparities, the needs of a diversifying population and mounting health costs.”

Up to 400 unlicensed immigrant doctors live in Minnesota, the report indicated. Most are trained as primary care physicians, but they are not allowed to practice in Minnesota.

Besides providing more doctors for Minnesotans who are underserved, the report said that immigrant doctors could lower state costs millions of dollars a year by catching health issues earlier than happens now with a doctor shortage.

The task force suggested that health leaders work on ways to get immigrant doctors licensed in the state.

“This task force has thought creatively about this problem and brought us feasible and groundbreaking strategies that could fortify our physician workforce for years to come,” state Health Commissioner Dr. Ed Ehlinger said.

State of rural Minnesota: poorer and more diverse

Rural Minnesota has some striking differences with Minneapolis and St. Paul, but also some surprising similarities.

For instance, north-central Minnesota’s population is poorer than most of the state, with lower income and more school students on government-subsidized free lunch than much of the state. A few other deep rural areas joined the north-central area on those marks.

The state’s two biggest cities also had a high free-lunch rate, but median household income was far better than north-central Minnesota in demographics presented to a state House committee Thursday by Executive Director Brad Finstad of the Center for Rural Policy and Development.

Called The State of Rural Minnesota, Finstad’s presentation was a primer for the House Greater Minnesota Economic and Workforce Development Policy Committee, which in the next few months is to work on improving conditions outside the Twin Cities.

In an interview, Finstad said attention being paid this year to greater Minnesota is good news.

“Without a doubt, people are paying more attention to rural issues,” he said.

He warned, however, that lawmakers need to look beyond next year’s election because solving rural Minnesota problems will take years.

The former state representative used a series of maps to show committee members the changes affecting rural Minnesota.

Finstad said that data shows north-central Minnesota is a financial sore spot. While he said “there are a thousand different factors” causing the issue, he noted that area is home to poor American Indian reservations.

In many ways, greater Minnesota is a contrast. The areas doing best generally are in a corridor from St. Cloud, through the Twin Cities to Rochester. That is where much of the population growth has occurred, but counties north of the Twin Cities and St. Cloud also are growing.

Places that he called “deep rural” generally are losing population, mostly young people. As residents there age, Finstad said, there will be fewer workers available and less money to pay property taxes. Health-care institutions will be in greater demand.

Rep. Mike Sundin, D-Esko, warned committee members that some data about some counties across rural Minnesota may be hard to analyze because so few people live there that a minor change could affect statistics. “You could have a sled dog accident and that skews how many you have in a county.”

While many people look at the state as metropolitan and rural, Finstad said that is not the case: “It is well beyond two Minnesotas in some areas.”

Rural and deep rural areas have different needs, which often are different than those in the urban and suburban areas.

Among the differences Finstad showed was that the average age in many rural counties is at least 46, compared to the national average age of nearly 38. The youngest counties generally are in the suburbs, but some rural counties also show median ages younger than 36.

While many rural counties are losing population, colleges are attracting young people to some areas, as are minorities.

Nine counties’ populations grew between 1990 and 2012 due to minority residents. While the state’s two largest counties — Hennepin and Ramsey — led the way in minority population growth, other counties scattered around the state also gained minorities: Clearwater, Fillmore, Lyon, Mower, Mahnomen, Nobles and St. Louis, Finstad’s figures show.

White Minnesotans remain the strong majority, but the percentage of people of color throughout the state has gone from 6 percent to 15 percent since 1990. Many western and southern counties attracted new Latino, Laotian, Somali, Sudanese, Hmong and other people of color.

Income is one of the major differences between the suburbs and rural Minnesota. The biggest median 2012 household income was in suburban Scott County at $86,324 while it was lowest in Wadena County, $37,577.

State of Rural Minnesota report is available at

Minnesota senators look to Wisconsin for workforce advice


Stories of Minnesota manufacturers finding it difficult to fill jobs abound around rural Minnesota, and some state senators are looking at ways to help.

It may only take a little nudge to move businesses to taking action, a Wisconsin education leader Monday told seven members of a Minnesota Senate rural task force.

“There is a renewed interest in manufacturing,” Ann Franz of Northeast Wisconsin Technical College told the group, partially crediting a state-college-private partnership.

She said that although Wisconsin appropriated $15 million for training and helping people find jobs, money to improve school facilities has come from the schools and manufacturers.

Democratic Minnesota Sen. Tom Saxhaug of Grand Rapids, the task force chairman, said that there already are some parts of the state doing what Franz suggests, but task force members said they may suggest at least two steps to improve trade education in the state:

— Taking an inventory of all manufacturing education programs and equipment in Minnesota high schools and colleges.

— Hiring a state coordinator for trade education to make sure it is available where needed.

“We may have to spend some money,” Saxhaug said, quickly adding that “it will be in the thousands, not millions” of dollars.

The task force also will consider a bill providing state grants to improve manufacturing education.

Manufacturing plant officials across rural Minnesota say they have jobs open, but not enough trained workers to fill them. Many of the workers need skills such as welding before they can be hired.

Even if that worker gap is closed, many communities do not have adequate housing for the new workers. Saxhaug’s task force also may look into that issue before the new legislative session begins Jan. 6.

Saxhaug said that, besides training, manufactures and schools need to deliver a message to students: “If you want to stay in rural Minnesota, we have opportunities for you.”

About 18 percent of jobs in northeast Wisconsin’s 18 counties around her Green Bay campus now are in manufacturing, about twice the national average, Franz said.

The key in her area is that training as low as in elementary school uses the latest equipment, like what students will use when they get jobs. Old equipment does little good in the classroom, she said.

“Manufacturing is different than 20 years ago,” Franz said. “It is less manual labor.”

In Wisconsin, school students sometimes operate their own manufacturing businesses and use those profits to buy more modern equipment.

Since the school, state and manufactures began working together, she said, the number of students enrolled in welding classes at area technical colleges shot up from 193 to 506. In machine-related classes, numbers since 2006 have climbed from 180 to 483.

Democrats and Republicans on the task force appeared to be on the same page on trade education. They talked about encouraging companies to collaborate like in northeastern Wisconsin, leaving the state with relatively limited involvement.

Sen. Julie Rosen, R-Fairmont, said it will be an “easy sell” to businesses to get involved in educating workers, but the state may need to first pave the way.

Sen. Paul Gazelka, R-Nisswa, said Minnesota schools such as Central Lakes College already are working well with manufactures to provide training.

“We can help,” Gazelka said of state government, “but in the end it is a buy-in from the players.”

Political chatter: Some medical marijuana questions unanswered

Questions about medical marijuana remain, even as opposition to it has mellowed.

State officials are implementing a Minnesota law enacted earlier this year to allow two companies to grow, process and sell marijuana to patients with specific medical conditions.

For much of Minnesota, the big question centers on travel time. From extreme southwestern Minnesota, for instance, a one-way drive would be four hours to St. Cloud, the nearest place the medicine will be for sale.

Many greater Minnesota sales sites will not be open when selling medical marijuana becomes legal next July 1.

LeafLine Labs, which plans sales locations in Hibbing, St. Cloud, Eagan and St. Paul promises service in Eagan by next July 1, but only says the other three locations will open by July 21, 2016.

The other of two companies pledges to open all of its sales outlets next July 1. Minnesota Medical Solutions plans to make the sales in Moorhead, Maple Grove, Minneapolis and Rochester.

State law requires each company at least to open at least one sales site next year, but gives the companies another year to open other sites.

The Duluth News Tribune reported that Duluth residents will need to devote hours to getting marijuana medicine because they must drive to Hibbing.

“Any plans to one day set up shop in Duluth are on hold,” the newspaper reported. “Last month the Duluth City Council placed a six-month moratorium on any prospective medical marijuana facilities, providing time for city staff to consider how such businesses should be zoned and located in the community.”

For other parts of the state, officials did not think there would be enough patients seeking marijuana medicine to warrant sales sites there. However, they said that where patients live will be monitors and sites could be changed if needed. There also is talk about a mobile sales site, but that would require legislative action, as would adding any more permanent sites.

Another question is whether the two companies will be able to meet demand. No one knows how many Minnesotans will seek medical marijuana; estimates range from 5,000 to 15,000.

State law says: “A manufacturer of medical cannabis shall provide a reliable and ongoing supply of all medical cannabis needed for the registry program.” However, a Health Department official said that if more patients show up to buy the medicine than expected, they probably will get the product on a first-come, first-served basis.

Few appear to be asking, or answering, yet another question: Where do the two companies obtain seeds or seedlings for marijuana plants?

One state official joked that it was “immaculate conception.”

Growing marijuana is illegal in Minnesota, other in the two companies’ facilities, and it is against federal law to transport marijuana across state lines.

Rural lawmakers dominate

It probably is no surprise the new Minnesota House Republican leadership team is packed with rural lawmakers.

After all, Republicans regained control of the House in last month’s elections because of rural wins.

Speaker-designate Kurt Daudt of Crown and Majority Leader-elect Joyce Peppin of Rogers announced the leadership team, topped by Rep. Dan Fabian of Roseau as majority whip. The whip’s job is to make sure GOP members get needed information during debates in the House chamber.

Four of the six assistant majority leaders are from greater Minnesota: Dave Baker of Willmar (elected for the first time in November), Deb Kiel of Crookston, Ron Kresha of Little Falls and Chris Swedzinski of Ghent. Also assistant leaders, from suburbs, are Tim Sanders of Blaine and Kathy Lohmer of Stillwater.

Baker, a businessman, downplayed the rural orientation of the team.

“Minnesotans in all parts of the state share similar priorities such as job creation, improving access and quality of care for our seniors, and prioritizing funding for roads and bridges,” he said. “Focusing on these issues will improve life for families in the metro, the suburbs and here in Greater Minnesota.”

Klobuchar on team

U.S. Sen. Amy Klobuchar has been named to the leadership team of an organization that advises Democratic Senate leaders.

The Minnesota senator joins the Democratic Policy and Communications Center’s leadership. It is led by New York Sen. Chuck Schumer.

Seniors want tough laws

Older Minnesotans say they want tougher driving laws, even on themselves.

A AAA Foundation for Traffic Safety survey indicates that aging drivers generally support proposals that Minnesotans 75 and older renew driver’s licenses in person and more than 70 percent want to require seniors to pass medical screening tests to keep their licenses.

E-cigarettes banned

Minneapolis has joined several other Minnesota cities and counties to ban electronic cigarettes from all indoor public places as well as where people work.

Basically, the new ordinance applies the state tobacco cigarette ban to e-cigarettes.

State lawmakers debated the issue, but did not enact a strict ban like tobacco smokers face.

Renovation relief

The multi-year state Capitol renovation created one major problem for the few people still working there and any visitors who can get inside: where to find a restroom.

Nearly all Capitol restrooms are in construction areas and closed. So a memorandum delivered Friday is the best news yet: “Temporary heated restrooms available outside the ground floor south entrance.”

Political notebook: Dems push rural issues

By Don Davis

Minnesota House Democrats want voters to know that most rural residents should pay lower property taxes on their homes after actions they took.

“We think it is good news for Minnesotans and Minnesota homeowners,” House Speaker Paul Thissen, D-Minneapolis, told a handful of greater Minnesota reporters on a Friday conference call.

After property taxes rose 84 percent in the past dozen years, he said, they now will drop 4.9 percent after actions during last year’s legislative session.

While numbers Thissen and colleagues released are overall statewide figures, Rep. Paul Marquart, D-Dilworth, said the overwhelming majority of rural Minnesotans’ home property taxes will fall.

That is not the case, however, with taxes on farm land.

House Property Tax Chairman Jim Davnie, D-Minneapolis, said he hopes to find a way to lower farmland tax in a second tax-cut bill the House expects to debate this legislative session. Also possible are bigger homeowner and renter refunds and fixing a formula problem that cost 11 counties state aid.

But Senate Tax Chairman Rod Skoe, D-Clearbrook, says there will be no second tax-cut bill. And $500 million in tax cuts the House approved Thursday cut deeper than the Senate will, he said.

Marquart said that rural Minnesota home taxes already are down $30 million, and any homeowner who otherwise would pay more could get a big enough refund to counter higher taxes.

It is obvious around the Capitol that House Democrats are worried about losing rural Minnesota seats in the November election.

Minutes after the House approved its $500 million tax cut, most rural Democratic members sent news releases out via email.

“These tax cuts will go directly to middle class families in Minnesota, including the business owners of main street store fronts and the folks who support them” Rep. Ben Lien, D-Moorhead, said, comments typical of rural Democrats.

“Our great state is on the right track and the way to continue that progress is to grow our economy from the middle out, starting with these middle-class tax cuts,” Rep. John Ward, D-Baxter, said in in his news release.

“The way to continue building on our progress is to expand middle-class economic opportunity,” Rep. Mary Sawatzky, D-Willmar, said.

Republicans were not buying it.

Senate Minority Leader David Hann of Eden Prairie echoed other Republicans’ views by saying that Democrats cannot declare victory in the last half of the Legislature’s two-year session. Last year’s $2.3 billion tax increase is cannot be counterbalanced by a $500 million cut, he said.

Democrats lose 2 votes

A tax-cut bill the House passed in record time, less than two weeks into this legislative session, gained support of all but two representatives.

Democratic Reps. Jason Metsa of Virginia and Ryan Winkler of Golden Valley put the only two red votes on the tally board, later saying the money used to finance the $500 million in tax cuts could have been better spent.

Metsa said he supports the part of the bill that matched Minnesota tax law to federal law, which not only would save money but also make tax returns simpler.

“I think the remaining dollars would’ve been better spent on additional property tax relief, support for our nursing homes and further restoring Minnesota’s commitment to our counties, cities and townships after a decade of funding cuts,” Metsa said.

Winkler said he voted against the tax cut because they were too large.

“I support some of the individual provisions, but think that we should not pass cuts within a year of enacting the first truly balanced budget in a decade,” Winkler said. “In addition, a surplus is a good thing to re-invest in Minnesota’s economy through early childhood education, lower higher education costs, higher pay for care providers, improved transportation, etc.”

More propane transportation

Upper Midwest U.S. senators are pushing legislation to make it easier to transport propane to people affected by shortage of the fuel and its high price.

U.S. Sens. Amy Klobuchar of Minnesota, Al Franken of Minnesota, John Hoeven of North Dakota and Tammy Baldwin of Wisconsin introduced a bill to extend the number of hours drivers can transport propane.

Minnesota U.S. Reps. John Kline, Erik Paulsen, Tim Walz and Rick Nolan have a similar bill.

The longer hours would be allowed through May 31.

“With winter weather still bearing down on Minnesota, we need to do everything we can to deliver relief to families who are feeling the impacts of the propane shortage,” Klobuchar said. “By letting truck drivers work longer hours for the rest of the winter, this legislation will help speed propane supplies to those who need it most and deliver some much-needed certainty to families across Minnesota.

Cash for projects?

Before Gov. Mark Dayton announced changes he wants to make in the state budget on Thursday, it appeared likely that money from a $1.2 billion surplus would be used to fund some public works projects.

However, Dayton tried to put an end to that as he opted against paying cash. He said borrowing money by selling bonds is a better way to fund public works projects such as fixing buildings and constructing new ones.

He included enough money in his revised budget to pay interest on bonds so the Legislature could approve a nearly $1 billion public works bill instead of $840 million legislative leaders want. Legislative leaders are open to paying cash for some projects.

Mute those reporters

Gov. Mark Dayton has been homebound after hip surgery, forcing him to dump news conferences in favor of conference calls with reporters.

When he announced his supplemental budget Thursday, the conference operator explained that reporters’ telephones were muted while Dayton talked.

“I kind of like these calls when all the reporters are on mute,” Dayton cracked.

Speaker’s rural initiatives feature tax cut

By Don Davis

Rural Minnesotans’ ears will be burning when state legislators return to the Capitol Feb. 25 for their 2014 session.

House Speaker Paul Thissen, D-Minneapolis, promises a variety of greater Minnesota issues will be debated, especially a provision to lower ever-increasing property taxes on some farmland.

Thissen’s list ranges from removing a tax on farm implement repair that costs Minnesota farmers $2 million a month to providing more greater Minnesota economic development assistance. The speaker, in a Forum News Service interview, could not say how much the Democratic initiatives would cost, other than most would be “in the millions, not tens of millions of dollars.”

The two most expensive proposals are eliminating the implement repair tax and increasing the ag property tax credit.

Rep. Paul Marquart, D-Dilworth, said the ag property tax issue he is leading may not help some small farmers, but most would get property tax reductions of up to $575.

The reduction would begin this year on taxes already partially paid, he said, and only apply to homestead farmland. That generally is farmland where the farmer or a relative lives.

Actions legislators and Gov. Mark Dayton took last year lowered property taxes for many Minnesotans, but not for farmers.

“Not everyone has seen that relief,” Marquart said of the 2013 tax actions. “In fact, farmers have seen big property tax increases.”

More services funded by property taxes, such as fire and law enforcement, are not more in demand just because today’s land prices are higher, he said.

“Land value does a farmer no good until he sells it,” Rep. Paul Anderson, R-Starbuck, said. “It is still the same productivity. The increasing value doesn’t give me a better operation in terms of what I produce.”

If a farmer pays $15 an acre in taxes, the $2 to $3 tax break Marquart proposes is significant, said Anderson, a farmer.

Every little bit helps, he added.

Early estimates indicate that the added farmland credit would cost the state $33 million this year.

Ending the farm equipment repair tax implemented last year would be another step to help farmers, rural lawmakers said.

“I am not so sure our metro colleagues understand how big those repair bills get,” Anderson said, adding that he has seen bills of up to $30,000 to fix self-propelled farm implements.

Thissen said he is sure the Legislature will vote to overturn the tax.

Thissen said some counties were left out when the state increased County Program Aid $40 million last year.

Nearly a dozen low-population counties with lot of farms lost state money in the deal. That should be fixed, he said.

Marquart said the cost to provide money they lost should come to less than $1 million.

“The new money (approved last year) is weighted more heavily toward the metro area,” Anderson said. “That is a path I don’t like to see us going down.”

Economic development aid also is in the legislative agenda.

“We still have not seen all the economic developments they saw in the metro area,” Marquart said.

Thissen suggested that lawmakers take action to improve fast Internet access, known as broadband, in rural areas. He said grants to fund Internet infrastructure construction could be considered and local governments may be given an easier route to borrow money for internet expansion.

The speaker also proposes several low-cost programs to provide aid for small businesses, mostly in greater Minnesota.

One would add money to a loan fund for businesses. Another would provide “innovation vouchers,” basically state subsidies to help manufacturers pay for private or college consultants that can provide specific expertise the business may not have.

Thissen said he wants state officials to find more funding for training workers. In many rural areas, jobs go unfilled because they cannot fine enough workers, such as welders, within commuting distance.

A long-term solution to high propane prices caused by an Upper Midwest shortage also is on the agenda, but Thissen said he does not have a specific plan.

Anderson, however, is working on a bill to eliminate sales tax for two years on propane tanks. The bill is his answer to the need to increase propane storage in Minnesota, so the fuel may be bought in the summer, when prices are low, and used during cold winter weather.

Thissen said long-term care funding will be discussed, but could not give specifics about what nursing homes and other elderly care organizations can expect. Officials in rural areas say nursing home pay is so low that they have to turn away residents for lack of staff.

Thissen said that it is important for even Twin Cities’ legislators to support greater Minnesota issues. At some point, he said, there will be too many rural Minnesotans moving to the Twin Cities, when it would benefit everyone for them to remain home.

Divide remains between rural Republicans, House leaders

Murphy, Marquart

By Danielle Killey

House Majority Leader Erin Murphy and Rep. Paul Marquart stood side-by-side Tuesday introducing House Democrats’ education funding plan.

Murphy, DFL-St. Paul, praised Marquart’s work as education finance chairman: “He has done such a fantastic job.”

Indeed, politics can make unexpected allies.

Marquart, DFL-Dilworth, had challenged Murphy to lead the House Democratic-Farmer-Labor caucus after last November’s elections. Rep. Paul Thissen of Minneapolis was elected House speaker, and Marquart said he wanted to make sure rural Minnesota was represented in leadership.

Marquart lost the leadership contest, but said he was pleased to land the job as education finance chairman. His committee decides the budget for the state’s largest spending area.

Marquart said he was relieved when he saw many other rural members named to committee leadership spots as well, allaying some concerns about a lack of input from greater Minnesota that many members outside the Twin Cities metropolitan area raised as the legislative session began.

“I thought, ‘here’s where the balance is,’” Marquart said.

Some rural lawmakers still are not convinced.

“I think we’re left behind, definitely,” Rep. Debra Kiel, R-Crookston, said of rural Minnesotans under Democratic budget plans.

She said the proposals do not address real needs outside the Twin Cities area and could hurt small businesses and farmers.

“I think they need to re-examine their priorities,” Rep. Rod Hamilton, R-Mountain Lake, said of Democrats. “I definitely have concerns.”

Many rural Republican lawmakers cited recent approval of the environment and agriculture finance bill, which included water usage fee increases, an example of plans they say will disproportionately impact greater Minnesota.

Before the legislative session began, Republican lawmakers said agriculture funding would be overshadowed by other issues when it was joined with environment and natural resources for finance talks, and they were not happy with the result.

The bill passed without any Republican votes.

“I think this is one of the first times we have had a lack of bipartisan support there,” Rep. Paul Anderson, R-Starbuck, said. “I just don’t think this is a common-sense approach to how things work in rural Minnesota.”

Murphy said Democrats intentionally aimed for significant rural committee leadership overall to ensure those voices would be heard and said the budget plan reflects that.

“I think Minnesota as a whole will experience the benefits,” Murphy said. “We pay a lot of attention to different areas of the state.”

“We said we’re not going to play games with the budget anymore,” Marquart said. “That leads to balancing it on the backs of rural Minnesota often.”

Marquart said those Republicans concerned about rural Minnesota should look at the difference from the past two years, when the GOP controlled the Legislature.

“Rural Minnesota took a hit,” Marquart said. “We reversed some of those things.”

“I think the overall budget is excellent for rural Minnesota,” he added, citing his education finance bill, property tax relief and a 3 percent increase in funding for nursing homes. “I would say, look at the results.”

Thissen said a possible public works borrowing bill also would include funding toward important projects in rural Minnesota.

Kiel acknowledged some rural cities might see more state funds from changes to Local Government Aid and property tax relief plans. But she said proposed alcohol and cigarette taxes, the water fee increases, education requirements and other policies would cost more than any benefit those communities might see.

“Even if we raise LGA, we’re going to turn around and spend it and charge more money,” she said.

Kiel said other Democratic proposals such as raising the minimum wage will hit rural Minnesota harder than the metro as well. “That’s going to be detrimental to businesses.”

Leaders “truly think they’re trying” to keep rural Minnesota in mind, Kiel said.

Murphy grew up around agriculture and said she has farmers in her family. She said she understands the ag industry’s strength is essential to the state’s success.

But top concerns are different from rural to metro areas, Kiel said, and it is hard to advocate for both.

“If everything’s a priority, nothing’s a priority,” Hamilton said.

Marquart said he thinks Thissen and other leaders have “made a concerted effort to make sure the results are beneficial for rural Minnesota.”

“We know if greater Minnesota succeeds, we’ll all succeed,” Thissen said.

Hamilton said the final results of the session remain to be seen in the last few weeks, and Democratic leaders still will be in place next year, the second of a two-year legislative session.

More policy issues likely will come up then, Anderson said, and the impacts on the state outside the metro area might be clearer.

“There could be a lot more issues that are near and dear to rural Minnesota,” Anderson said. “It’s kind of a two-year trial here.”

 Reporter Don Davis contributed to this story.

Lawmakers look at ways to help rural Minnesota economically


By Danielle Killey

Rural Minnesota businesses could hire more employees and afford to stay in the state with some extra state help, some lawmakers say.

Minnesota legislators have introduced plans to create an internship program, offer special business tax credits and pay for some employee training in greater Minnesota, all aimed at strengthening the rural economy.

Sen. Kent Eken, DFL-Twin Valley, said his proposed internship program would help young professionals realize there are career opportunities in rural Minnesota.

His program would provide business tax credits helping companies pay college interns up to $4,000 each.

“We’re trying to keep more young people in our communities and help employers as well,” Eken said.

The up to $11 million requested for the program in the next two years would cover about 2,400 internships, Eken said. The students must get academic credit for their work as well as being paid.

“It’ll give them reasons to stay,” President Bruce Ahlgren said of the Coalition of Greater Minnesota Cities.

Rural Minnesota cities still are recovering from the recession, said Ahlgren, also Cloquet’s mayor. He said internships were among the first things businesses dropped to keep afloat.

Another proposal is aimed at helping companies struggling to find the right applicants fill jobs, bill author Sen. David Tomassoni, DFL-Chisholm, said.

“What we’re hearing from businesses is they can’t find qualified people,” he said. “This is about creating a training program that will be nimble enough to meet the needs of the economy and employers.”

He proposes reimbursing businesses for some employee training costs. Eligible companies must pay employees at least $13 an hour by the end of their first year and be located outside the Twin Cities metropolitan area.

Tomassoni said the measure is focused on high-skill jobs.

“I think it’s a pretty creative way of doing this,” he said.

Sen. Vicki Jensen, DFL-Owatonna, proposed a broader plan she said would not only bring in new jobs, but also will help businesses stay in greater Minnesota and retain jobs. It would replace the Job Opportunity Building Zone program.

Jensen would give rural Minnesota businesses some sales and property tax exemptions when they expand or come to the state and offer income tax credits based on pay and the number of employees, encouraging new hires.

“We need tools in greater Minnesota,” President Barry Wilfahrt of the Grand Forks and East Grand Forks Chamber of Commerce said.

He said there are business incentives in neighboring North Dakota that can draw companies away.

Jensen said while there are other job and economic development programs in the state, she wants some specifically focused outside the Twin Cities metropolitan area.

“I’m not willing to just sit back and cross my fingers this (other) legislation will work in rural Minnesota,” Jensen said.

Outside employment, leaders of cities that border North Dakota say they are struggling just to keep businesses.

“It’s a different situation right on the border than it is in the rest of the state,” Eken said.

He proposes adding $1 million to the pot for border cities to help businesses, on top of a program first established in 1984 giving Breckenridge, Dilworth, East Grand Forks, Moorhead and Ortonville extra funding from the state to use for tax reductions.

Eken said North Dakota has unique advantages, including an influx of money from the oil industry.

“There challenges aren’t necessarily new, but they are intensified,” Moorhead City Manager Michael Redlinger said. “This is really about staying in the game and keeping these businesses on as level a playing field as possible.”

The program does not include all western border cities. Eken said the determination depends on the proximity to the border and size of competing city.

All the proposals are being considered for an overall tax plan.

Eken also proposes a program to set property tax rates for businesses along the North Dakota border, including rental housing, at the lowest effective tax rate in the bordering city. He said that will keep Minnesota’s property tax rates competitive.

“We have the issue with competition in North Dakota, which really is an anomaly,” Eken said, compared to other borders throughout the country.

Eken said the other bill would keep Minnesota’s property tax rates competitive with North Dakota’s.

Republican Sen. Roger Chamberlain of Lino Lakes said he does not think the border cities have a special need for such programs.

“The excuse that North Dakota has oil doesn’t hold,” he said. “What’s good for the border cities, why isn’t that good for the rest of the state?”

He said the Democrat senators’ proposals make the case that business tax credits

and exemptions create jobs and said that should be applied throughout Minnesota.

Talking about the internship program, Sioux Falls, S.D., native Moriah Miles, Minnesota State University Student Association chairwoman, said she originally saw her move to attend school in Minnesota as temporary. But she was offered a job and decided to stay here, she said.

“There are many students who come here with the intent to go back” to other states, she said, but if opportunities are readily available they might stay in Minnesota.

Senate Tax Committee Chairman Rod Skoe, DFL-Clearbrook, said he is considering expanding the internship program statewide.

“My main concern is we bolster economic development in greater Minnesota cities,” Eken told the committee Monday, but added he would be open to widening the program scope.

On other border cities program, 150 businesses in Moorhead alone benefitted in 2012, Redlinger said.

“It’s really a win-win for Minnesota when these businesses stay,” he said. He said many want to remain in Minnesota, but the incentives from North Dakota can be tempting.

He said Minnesota cities need even more money to compete. “The disparities between the border cities have grown for some time now.”

Jensen said program such as angel investment credits, which provide a break for those who give money to startup companies, work well in the metropolitan area. But she said more than 90 percent of that funding goes there rather than to rural Minnesota.

“Greater Minnesota needs different tools,” Ahlgren said.

Legislative notebook: Gay marriage fight will continue during session

By Danielle Killey and Don Davis

Organizations that took the lead in an election fight to ban gay marriage will keep working as Minnesota lawmakers debate the issue, and even debate whether to debate the issue.

Minnesotans United for All Families will continue its work to legalize gay marriage while the leader of anti-gay marriage Minnesota for Marriage says that group needs to keep up the fight, too.

On Nov. 6, voters defeated an attempt to outlaw gay marriage in the state Constitution. But the ban remains in state law.

Democratic leaders generally support gay marriage, but have hesitated embracing a law change in 2013.

The November vote only meant that “people don’t want to stop that discussion fully,” House Speaker-designate Paul Thissen, DFL-Minneapolis, said. “They don’t want to lock into our state Constitution a definition of marriage.”

Discussions need to continue, he said. In the meantime, the U.S. Supreme Court plans to take up a gay marriage case that could overrule anything Minnesota does.

Incoming Senate Majority Leader Tom Bakk, DFL-Cook, said he knows bills will be introduced to allow gay marriage, but he does not favor that debate in the legislative session beginning Jan. 8.

“The more pressing thing probably this session is the budget,” Bakk said.

Chairman John Helmberger of Minnesota for Marriage is not buying DFLers’ talk.

“Don’t be fooled by the public statements made by the majority leaders in our new Legislature,” Helmberger wrote in a fundraising appeal to gay marriage opponents. “Right now, gay marriage activists are pressing our new Legislature and their ally Gov. Dayton to redefine marriage, just as we warned would happen throughout the amendment campaign.”

Indeed, pro-gay marriage groups are looking at how they can overturn the ban.

An Associated Press study showed that more than a quarter of the state’s 201 legislators live in districts that voted opposite how their parties stand on the marriage issue (Democrats generally were in favor of gay marriage and Republicans opposed). That leaves a big question mark on how legislators might vote on the issue.

Reforming elections

Incoming Assistant Senate Majority Leader Katie Sieben, DFL-Cottage Grove, has her sights set on improving the state’s election process as incoming chairwoman of the Senate elections subcommittee.

“I will be looking into, as part of that committee, why some of the lines for voting were so long,” Sieben said.

“I also think that we’ll have a robust discussion about early voting,” she said.

Early voting would allow Minnesotans to head to cast ballots before Election Day. Secretary of State Mark Ritchie has suggested Minnesota should explore the option, as other states have implemented a similar system.

Sieben said discussions about campaign finance reform will be raised as well.

“I also think there’s more we can do around campaign finance reform to increase the amount of disclosure that people running for office and elected officials need so the public is more aware of what potential sources of conflict that person could have,” she said.

Gov. Mark Dayton also has mentioned campaign reform as a top priority for 2013.

Dayton often has said he only will sign a major campaign law change if it arrives on his desk with broad bipartisan support.

Arming teachers

Two Republican legislators with long law enforcement backgrounds want to allow teachers to carry guns.

Two key Democrats oppose the concept.

“I would absolutely be open to personnel in the school who are certified and trained to have the option to do that,” Sen. Bill Ingebrigtsen, R-Alexandria, said. “They will have to be trained. I just don’t think that is unreasonable.”

Rep. Tony Cornish, R-Good Thunder, also proposes arming some school employees.

Ingebrigtsen said that the principal at the Connecticut school where 20 students died in December did the noble thing in trying to stop the gunman, and got herself killed in the process. If she had a gun, the senator said, maybe she could have saved lives.

“I don’t think too many people will disagree,” Ingebrigtsen said.

Two key people do disagree. Gov. Mark Dayton said that it does not make sense to arm school personnel and House Speaker-designate Paul Thissen, DFL-Minneapolis, said such a bill will not pass the House.

It’s a start

Paying back money owed to Minnesota schools pleases legislators, but many say it is only a beginning of what needs to be done to help schools.

“I am encouraged the state is able to pay our school districts a portion of what was borrowed from them,” Sen.-elect Susan Kent, DFL-Woodbury, said. “It was an unwise decision to take funds from schools in the first place and this is a positive outcome from the forecast

Even after a $1.3 billion payback, the state still will owe schools $1.1 billion.

“It’s important to come up with a plan to repay school dollars,” Assistant Senate Majority Leader-elect Katie Sieben, DFL-Cottage Grove, said.

Education funding should be fair among districts, but that no longer is the case, Rep. Paul Marquart, DFL-Dilworth, said.

Voter-approved property tax increases work well in districts with plenty of money, but not elsewhere, he said. That creates disparities.

“It really hurts the districts that have difficulty even approving a referendum,” said Marquart, incoming House Education Finance Committee chairman.

Sen. Rod Skoe, DFL-Clearbook, said property tax votes are “divisive in our communities.”

To bond or not

A strong movement appears to be forming to approve a public works funding bill in 2013, but most state leaders say that work must wait until after a budget is written.

They are reluctant to discuss how big a bill they could support.

“We are almost required to” approve what is known as a bonding bill, Gov. Mark Dayton said, because a state Capitol renovation project already has begun and more than $200 million is needed to finish it.

“I have not spent a lot of time thinking about it,” Dayton said, but added that if there is a bonding bill, he will propose funding civic center construction projects in St. Cloud, Mankato and Rochester.

The governor also mentioned the need to help fund Minneapolis veterans’ home work.

“Our priority is the budget,” House Minority Leader-elect Kurt Daudt, R-Crown, said, “The bonding bill is not off the table, we are open to talking out it.”

Daudt indicated Capitol work is a good use of bonding money: “It is a treasure to the state and we need to talk about it.”

Other Republicans are not as receptive.

“I don’t know why after a billion dollars of bonding in the last two sessions that we’d be jumping into more bonding in a non-bonding session,” Sen. Dave Thompson, R-Lakeville said. “But obviously you always have to look at what the proposal is before you pass judgment.”

The Legislature must deal with the budget in 2013 and usually reserves big bonding bills for even-numbered years.

Frowning on fees

Gov. Mark Dayton does not rule out raising fees, but hints that method of raising revenue is not honest.

“It is something I would be very reluctant” to approve, Dayton said.

“We have not made an evaluation yet whether that is warranted or not,” he added.

Recent fee increases, instead of tax hikes, have brought Minnesota fees “out of line with many other states,” Dayton said. “I see that as part of the honesty that we need to reinstate in our budget. … Let’s do it straight up, not back door.”

Helping businesses

Republicans in charge of the Legislature the last two years pushed initiatives to help businesses, such as lowering taxes, as ways to improve the Minnesota economy.

Democrats who take legislative control Jan. 8 look more at making sure existing programs have adequate funding.

“Make sure the people in the workforce are well trained and that businesses have good employees,” Sen. Rod Skoe, DFL-Clearbrook, said is a key. “We deal with some of the not large economic issues, but the smaller day-to-day details of making sure you have a good workforce and a good infrastructure.”

Skoe and other Democrats say that education beginning in early childhood helps produce good workers.

Sen.-elect Kent Eken, DFL-Twin Valley, said lawmakers need to find ways to reduce business property taxes, “which is becoming the No. 1 tax burden on businesses today in our area. It is driving more businesses out than any other tax.”

Laws lowering costs for firms near the borders of low-tax states like North Dakota and South Dakota need to remain in place, Eken added.

“It is very, very real that we have businesses right in the district that I serve that have left our area because of the tax climate and have gone to Sioux Falls,” Rep. Rod Hamilton, R-Mountain Lake, said.

At the same time, Hamilton added, tax-cut programs like the Jobs Opportunity Building Zones law helps attract businesses.

Incentives for businesses to invest in rural Minnesota are important, he said.

Rep. Steve Drazkowski, R-Mazeppa, said the economy again will be a priority, but warned Democrats’ policies could put it in jeopardy.

“We’re looking at a situation here where we’ve got somewhat of a fragile economic recovery that’s happening here,” he said. “I think it’s very important that we do not enact policies that will stifle the progress in the alacrity with which this economy will recover.”

One of those policies could be raising taxes, Drazkowski said.

Sand mining an issue

Sand mining for hydraulic fracturing, known as fracking, is an issue on the minds of many lawmakers, especially in rural areas.

They differ somewhat in their opinion of how the state should be involved but agree the issue will be raised during the upcoming legislative session.

“I think we’ll have some discussion about the mining issue, especially in southeastern Minnesota as it affects the Mississippi River,” Rep. Denny McNamara, R-Hastings, said.

He said the state probably will not have a major role except when it comes to issues with transportation.

“We need to look at the taxes we’re collecting when we extract minerals from the ground, and if are they adequate to cover all the costs associated with that work,” he said, referring to roads that might need to be repaired or built for trucks transporting the materials. “We don’t want the other taxpayers subsidizing the gravel operation.”

Sand is a key ingredient to the fracking process that used by oil and gas producers. Sand mining is a booming industry, but one that has environmental and other opponents who have slowed its growth.

“I think there will be questions asked and legislation discussed to look at ways that this industry can operate in Minnesota and, to the best of our ability, help protect the environment,” Assistant Senate Majority leader-elect Katie Sieben, DFL-Cottage Grove, said.

Some Minnesota cities and counties have put in temporary moratoriums on mining while they explore the issue and pen regulations.

When asked about it, Gov. Mark Dayton and legislative leaders said they expected to deal with the sand mining issue, but could offer no specifics.

Senator back mining

New forms of mining on Minnesota’s Iron Range, with all Democratic representation, received support from a Republican.

“The amount of potential up there … is similar to what North Dakota has with oil,” declared Sen. Bill Ingebrigtsen, R-Alexandria.

Revenue western North Dakota’s oil wells are bringing in allow that state to both lower taxes and spend more money, nearly the only state in the country doing that. North Dakota only trails Texas in oil production and is the country’s fastest-growing state.

Ingebrigtsen said Iron Range lawmakers need to work harder to overcome what he called environmentalist roadblocks to the mines that would produce nickel, copper and other valuable materials.

Schools statewide would be among the biggest beneficiaries of increased tax revenue from new mines, the senator said.

“Those folks have third- and fourth-generation miners sitting up there unemployed,” Ingebrigtsen said. “They need something up there.”

‘Save rural fund’

A fund set up to help rural Minnesota, with $10 million in it now, needs to be saved, Rep. Rod Hamilton, R-Mountain Lake, said.

The money had been allocated to pay ethanol producers when that fuel was being developed. Since that program is ending, legislative agriculture leaders got a law passed to divert the money into a rural fund instead.

The money could be used for an agriculture museum, FFA, 4-H, new agriculture businesses and other uses, Hamilton said.

However, he fears a Twin Cities-dominated House leadership will try to move the money into environmental programs. He plans a bill to keep most of it for ag.

“I believe that over the last decade, maybe even the last multiple decades, that we have done a very poor job of educating the public about where this food comes from.” Hamilton said, and this fund could reverse that course.

Rural Minnesota short of Internet speed

Minnesota has work to do to make online work balanced between urban areas and the rest of the state.

Thief River Falls’ Digi-Key employs 2,600 people as one of the largest and fastest-growing electronic components distributors in the world, former House Speaker Margaret Anderson Kelliher wrote in an introduction to a report on the spread of high-speed broadband Internet connections. But not all rural areas are as lucky, she added: “We are not on track to meet” speed goals set for 2015.

“The private sector is continuing to expand service and new technology is improving the quality of the service across the state,” said Kelliher, chairwoman of a task force looking into broadband. “But without partnership from the public sector, it will be incredibly challenging to ensure that all Minnesotans have access to high-speed broadband.”

Getting broadband to rural areas is important, she said. “We have witnessed how broadband can be an incredible equalizer between the more densely populated metropolitan area and greater Minnesota, enable business growth and provide opportunities for Minnesotans to lead healthier lives.”

The report showed that 62 percent of Minnesotans can access at a speed state officials set as the minimum acceptable. But many rural counties fall far short of the goal.

The task force recommended that tax credits or state grants be give to offer Internet to areas now not served, to extend existing sales tax breaks for equipment used to expand the Internet and provide aid to poor students who need Internet access.

Legislative notebook: Lanning does not worry about electronic pull tab revenues

Lanning at last committee meeting.

Minnesotans should not worry that a new Vikings stadium will fall short of funding, a key lawmaker says.

Wednesday’s state budget report included an item showing revenue from newly authorized electronic pull tabs is slow coming to the state. That set off fears that money from the new gambling form might not be enough to provide the state’s portion of new stadium cost.

The bill’s chief House author is not concerned.

“It’s not too surprising,” said Rep. Morrie Lanning, R-Moorhead. “We knew it was going to be slow.”

The problem is that so far just one company supplies iPads used for the new type of pull tab games. At least one more company is trying to get approved to sell the electronic devices, which Lanning said should help.

“I think it will grow,” said Lanning, who on Thursday attended his last House committee meeting before retiring.

While most of the attention has been paid to pull tabs, Lanning said he expects electronic bingo to be the big revenue-producer. “I think that is going to catch on more quickly.”

Gov. Mark Dayton told reporters that some bars with traditional pull tabs are waiting to see how the electronic version pays off before jumping in.

Budget, then bonding

The top Minnesota House Republican says he could accept a public works funding bill next year.

However, Minority Leader-elect Kurt Daudt, R-Crown, said that the state’s two-year budget would have to be written before the House can pass a public works bill, which would be funded by the state selling bonds.

In talking to a group visiting the Capitol, Daudt left open some questions when he said: “I don’t think we are going to try to hold things up on a bonding bill.”

But when reporters asked him later, he explained that the budget must wrap up first. Then, he said, a 2013 bonding bill is possible.

Daudt said that Republicans he leads will have little say in the outcome of most issues in 2013’s legislative session, but Democrats do need some GOP votes to pass a bonding bill, which requires more than a simple majority.

Bonding bills usually are passed in even-numbered years, but several Democrats say they would like one next year.

DFL looks at rural

House Democratic leaders are making attempts to make sure rural Minnesotans know they care.

The DFL caucus elected Minneapolis and St. Paul lawmakers as the two top leaders.

House Speaker-designate Paul Thissen, DFL-Minneapolis, said that upcoming Democratic caucus elections for assistant leaders likely will put more rural people in power.

“I suspect that will be much more representative of the state,” he told a group visiting the Capitol.

Later, House Minority Leader-elect Kurt Daudt, R-Crown, said concerns remain. “We are worried. … We feel a little bit that the rural area is getting left behind.”

However, Thissen said that 85 percent of the state’s budget will go through committees chaired by rural Democrats.

Property taxes up

Minnesota property owners may pay an average of 2.3 percent more in property taxes, the Revenue Department reports.

That is how much local governments propose to raise taxes, but those governments still must approve those figures.

If the proposed levies are approved, that would mean a $187 million property tax increase.

Overall, cities propose to raise taxes the most, 3.1 percent. Counties expect the lowest rate increases, 1.7 percent.