Support the Timberjay by making a donation.

Serving Northern St. Louis County, Minnesota

Tower, Ely to receive millions in new tax law

David Colburn
Posted 5/23/24

REGIONAL- While the Minnesota Legislature failed to pass a capital improvements bonding bill this session, many important Iron Range projects will still move forward thanks to the efforts of two area …

This item is available in full to subscribers.

Please log in to continue

Log in

Tower, Ely to receive millions in new tax law


REGIONAL- While the Minnesota Legislature failed to pass a capital improvements bonding bill this session, many important Iron Range projects will still move forward thanks to the efforts of two area lawmakers who secured an $80 million funding package through the Department of Iron Range Resources and Rehabilitation in this year’s tax bill.
Rep. Dave Lislegard, DFL-Aurora, and Sen. Grant Hauschild, DFL-Hermantown, each proposed measures in their respective chambers to leverage future taconite production tax revenues to pay off the $80 million worth of bonds to be issued for specified community projects and groups, many of which that had struggled to come up with the necessary funds to proceed. Rep. Roger Skraba, R-Ely, supported the effort by signing on as a co-author of Lislegard’s bill.
“What we’ve seen with the IRRB is that a lot of our communities in the core Iron Range are producing the iron ore and the tax proceeds,” Hauschild told the Timberjay on Tuesday. “Unfortunately, it was our feeling that a lot of that money was going outside of the core Iron Range, and that’s fine, but at the end of the day we wanted to be sure that our fair share came back to the core communities. We also think that’s it’s really important that we fund and give back at a grassroots level.”
“We funded core services on the Iron Range, everything from the water project in Tower to cafeteria items for the Babbitt and Tower schools to recreation groups, all of those things that stay in our communities and improve the quality of life,” Hauschild continued. “That’s not to say that I don’t support funding big industry projects or those types of things, but at the end of the day our first and foremost perspective should be the people and the communities, and that was really the goal of this effort.”
“Senator Hauschild and I have been working to cut taxes and invest in our local communities,” Lislegard said in a press release. “The projects in this bill are benefitting the communities and people whose hard work in our taconite mines fuel our region’s prosperity. They are the ones who rightly deserve to share in these resources to enhance their communities, and that’s what we’re committed to ensuring.”
Hauschild said he and Lislegard began working on the measure after assessing that the political landscape appeared challenging for passage of a standard bonding bill— a view that proved prescient.
“It was our sense that the Republican minority was not interested in bonding,” he said. “We supported bonding, and we pushed for it as hard as we could, but the lack of seriousness behind the offers that came from the other side made it very clear that these projects were not going to get funded. We made sure that our request in the bonding bill were separate from those in the tax bill, so that if there had been a bonding bill we would have gotten more projects funded, rather than having duplicates.”
Hauschild’s and Lislegard’s proposals met with some resistance from Republicans in committee hearings who voiced concerns that such a thing hadn’t been done before. Hauschild narrowed in on the crux of the objection.
“We have bonded IRRRB money and leveraged our dollars many times,” he said. “The folks that said we’ve never done this before are saying we’ve never done this before for the core people and communities. We’ve done it for industry, we’ve done it for complexes like the Iron Trails Motor Center. The difference is that people seem to be upset for some reason that we’re giving it back to the people in the core communities,”
The funded projects are in addition to the normal grant application and award process communities have routinely used to access IRRRB funding, so other projects not directly funded by the bonds in the tax bill stand to benefit as well, Hauschild said.
“What this did is it actually lessened the burden on the agency for that process,” he said. Now they don’t have to think about that Tower project – they can fund some other community stuff.”
Tower water project
The new $10.7 million drinking water treatment plant to serve Tower and Soudan already had the go-ahead from the Tower City Council while city and Breitung Township officials pursued additional funding for the project, which Tower Mayor David Setterberg said Tuesday was about $2 million short. Setterberg was decidedly enthusiastic about receiving the $3 million designated in the tax bill for the project.
“It’s pretty exciting – as far as the water treatment plant goes, it was a godsend,” Setterberg said. “Originally, we went after bonding money, and we actually had the House and Senate committees come up to the area and we did presentations, but at the end we kind of got kicked out. So, we worked really closely with Grant Hauschild, and Roger Skraba was aware, too – we kept in close contact with them the whole time.”
Setterberg said the award will benefit local water customers, who might have had to assume a larger share of the costs that will now be defrayed by the award. But that doesn’t mean the communities will get out of paying something. Setterberg said they would still be getting a $1 million loan from the state’s Public Facilities Administration.
“They’ve come in and evaluated that no matter what, the area can afford a $1 million loan,” Setterberg said. “They said they’re going to cover us up to this much and you are going to have to put some skin in the game for that amount, so what it does is reduces the amount of shortfall we have.”
Setterberg said he would be looking into the possibility of applying some of that $3 million award to the sewer pond expansion project.
“We actually received a million dollars from (U.S. Rep. Pete) Stauber for that, and it was also supported by (U.S. Sen. Amy) Klobuchar,” he said. “With that one you need a 25-percent match, so now hopefully we can also use some of the $3 million to provide a match to that million.”
School cafeterias
ISD 2142 St. Louis County Schools will receive a $600,000 grant, $400,000 of which is designated to cover cost overruns for the septic system rehabilitation project at South Ridge School. But the remaining $200,000 will be used for improving the cafeterias at Northeast Range and Tower-Soudan schools.
“The $200,000 is to get new lunch tables at both schools and do something with the flooring in the cafeteria at Northeast Range,” said Superintendent Reggie Engebritson. “We are very grateful to our local legislators for these dollars because when prices went up, the only way to complete the project was to use our general fund dollars, which would have left us with less money for students and programs. The lunch tables at both Northeast Range and Tower-Soudan are very old and not in the best working condition, so these dollars will help us buy new tables that will last us for many years to come.”
Buyck Fire Department
Another project receiving $950,000 in funding is a new fire and training hall for the Buyck Volunteer Fire Department.
“My reaction to this is beyond grateful,” Chief Kathy Weiand said. “We’re very appreciative of all the work that Rep. Lislegard, Sen. Hauschild, and Rep. Skraba did, as well as the Costin Group that helped put this package together and get it through.”
North Country area projects included in the bond awards include:
• $750,000 to the Voyageur Trail Society for a joint maintenance facility with Voyageur Country ATV in the city of Orr.
• $2.08 million to Northland Learning Center for construction costs.
• $12.8 million for Giants Ridge for facility upgrades.
• $5.25 million for the Ely school district for baseball field renovations and a new athletic complex.
• $400,000 for Veterans On The Lake for demolition of existing structures and construction of a triplex compliant with ADA standards.
• $300,000 for the Northern Lights Music Festival to support programs, with $100,000 annually for three years.
• $500,000 to the Northland Foundation to assist businesses or resorts that were economically damaged by floods in 2022 or 2023.
• $25,000 to Northwoods Friends of the Arts in Cook for facility upgrades and programs.
• $50,000 to the Bois Forte Band for food shelf expenses.
• $100,000 to the Lake Vermilion Cultural Center to improve and renovate the facility and its displays.
• $50,000 for the Pioneer Mine historical site in Ely for maintenance and displays.
• $100,000 for the Cook Timberwolves Snowmobile Club for trail maintenance and equipment.
• $100,000 for the Vermilion Penguins Snowmobile Club for trail maintenance and equipment.
• $25,000 each to the Ely Igloo Snowmobile Club, Crane Lake Voyageurs Club, Voyageur Snowmobile Club, Prospector Loop ATV Club, Babbitt ATV and Snowmobile Club.
Property tax relief
The broadest impact of the tax bill will be felt by homeowners on the Iron Ranges. The legislation would increase the Taconite Homestead Credit from an average of $289-$315 per household to $515, a nearly 77 percent increase. The credit has lost much of its impact since being frozen in 1998. The credit applies to homeowners in school districts in the Taconite Relief Area, including Ely, St. Louis County, and Mesabi East.
“By increasing the Taconite Homestead Credit, we can provide relief to Iron Range families immediately and permanently,” said Hauschild. “After a 26-year freeze, it’s the right thing to do for the Iron Range.”