Riled-up Iron Rangers rip GOP $60 million ‘raid’ on their development fund

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Rep. Carly Melin

Now they’ve done it. Now the Republicans have gone and offended Minnesota’s Iron Rangers.

Rukavina, Anzelc, Bakk, Dill, Tomassoni. All of those old Rangers are furious. But the most angry of all is the newest of the Rangers, the newest member of the House for that matter, Carly Melin, DFL-Hibbing.

“Shameful,” she said to members of the Jobs and Economic Development Finance Committee. “It makes me sick. Stealing money. Why is this OK?”

Rep. Tom Rukavina sat in the front row of the hearing room, nodding his head approvingly as he listened to Melin.

“She’s got a good Ranger accent,” he said. “She’s got a lot going for her.”

What has Melin and the other Rangers hotter than a blast furnace is their belief that the Republicans on the committee have lifted/purloined/stolen $60 million from the Douglas J. Johnson Development Trust fund and plopped it into the state’s general fund. That money, no different from local property tax money in the eyes of the Rangers, under law is supposed to be used only in the six northeast Minnesota iron industry counties.

Republicans seem sheepish about action
To be sure, the Republicans seem to feel a little sheepish about taking it.

Rep. Bob Gunther, the author of the bill that captured the money, was apologetic during a committee meeting that ended with the Republican majority approving of the bill that includes the Rangers’ $60 million. The bill now goes to the House Ways and Means Committee, where it surely will pass again.

“This was not my idea,” said Gunther, apparently of the budget target that was handed his committee and prompted the heist of Ranger loot.  “This was the hand I was dealt.”

Mostly, though, Gunther hung his head as the debate – which mostly featured Rangers and their DFL supporters – roared around him.

The stormy committee meeting Thursday afternoon represents the dilemma many Republicans face as they attempt to fulfill their campaign pledge to balance the state’s budget with no new revenues.

If you have vowed not to raise taxes, you’ve got to fill deficit holes somehow.

“The [Rangers’] money was just there,” said Gunther at one point in the middle of this afternoon’s storm.

Just how hard it actually is to close a $5 billion deficit without revenues is becoming more and more obvious.

Republicans are looking everywhere for whatever spare change they can find.

During a committee session Wednesday night, for example, Rep. Steve Drazkowski, R-Wabasha, proposed that the state start logging operations in at least a few state parks as a money-raising idea.

Remarkably, his bill passed through committee on a straight party-line vote.

Then, of course, there was that effort earlier this week to take $69 million of transit funds from five metro-area counties and use it to plug state budget holes. The outcry on that was so great that the idea seems to have moved to the back burner for the moment.

But the Ranger money?

The effort to “transfer” that to the state general fund is moving ahead.

Iron Rangers vent at news conference
Before the Economic Development committee hearing this afternoon, the Iron Rangers held a news conference to explain again how angry they are and how wrong Republicans are in thinking that trust fund cash belongs to the state.

They pointed out that mines do not pay property taxes. Instead, they pay a tonnage tax that goes into a number of funds. One of those, the Douglas J. Johnson fund, which receives 13.7 cents per ton of ore from mining companies, is set up specifically to be used as development money for diversifying the Range economy.

Only the interest is used from that fund, which has been crucial to starting up a number of firms, large and small.

There are, it should be noted, other funds coming from Range production that benefit the entire state. Over the years, a K-12 school fund has grown to $721 million. Interest from that money is paid out on a per-capita basis to students across the state. Additionally, there’s a University Fund, which currently stands at $355 million. Interest earned from that fund goes to public institutions of higher learning across the state.

All of this money, Rukavina said, is going across the state from a region that represents 3 percent of Minnesota’s population.

At the news conference, Rukavina, colorful as always, gave new meaning to the state’s motto.

Most people, he said, might think that “L’Etoile du Nord’’ means the Star of the North.

“ ‘L’Etoile du Nord’ means the ‘Money Goes South,’ ’’ Rukavina said.

During the news conference, Bakk said the “raid” of the trust fund money shows that the Republicans “about politics, not policy.”

That means he believes Republicans are taking the Range money because the Range is populated by DFLers.

But he also said there was irony in their decision.

“After all these years, the Republicans finally won a seat from the Range,” Bakk said.

He was referring to the House victory of Carolyn McElfatrick, by 400 votes, over DFL incumbent Loren Solberg.

“They [Republicans] won’t get another one for 50 years,’’ Bakk vowed.

Go back to the committee hearing.

Freshman legislators tangle
Melin offered an amendment to the finance bill. In her amendment, she said that instead of “stealing our $60 million,” Local Government Aid funds should be cut from the district represented by the bill’s author, Gunther, and from LGA funds from the district represented by Ernie Leidiger of Mayer.

Leidiger had made the mistake of earlier saying he “enthusiastically supported” taking the Ranger money.

Melin said that she would have preferred taking property tax money from those districts but was prevented from doing so by state law. 

Leidiger’s face turned red at this suggestion. But then he made a rookie legislator’s mistake. He asked Melin a question he didn’t know the answer to.

“How much money,” he asked Melin, “does the trust fund receive from the state’s general fund?”

“Nothing, not a dollar,” said Melin.

Leidiger tried to dig out of that hole with another question.

“In the future, is the IRRRB (the Range board that oversees the Johnson Fund) expected to receive money from the general fund?”

“No,” said Melin. “Never has, never will.”

Leidiger decided to cut his losses and ask no more questions.

Her amendment, of course, failed.

But the Rangers got moral support from other DFLers on the committee, including St. Paul’s Tim Mahoney.

He talked of how “shameful” it had been to see advocates from a number of organizations come before the committee and thank committee members for not cutting their budgets more deeply.

“Shame on every person who came here and said, ‘Thank you for not cutting my program more deeply,’ ” Mahoney said.

Programs are being spared deeper cuts, he said, because Republicans on the committee raided the Rangers’ money.

This battle isn’t over.

Rangers don’t yield easily.

Beyond that, there are deep questions whether the law even allows the money to be taken.

But that’s a battle for another day.

Besides, Gov. Mark Dayton, who owes his job to support on the Range, will almost certainly ride to the rescue on these funds.

That, of course, means Republicans will have to figure out another way to come up with $60 million. It’s a job that keeps getting harder and harder.

Doug Grow writes about public affairs, state politics and other topics. He can be reached at dgrow [at] minnpost [dot] com.