Article By Neal St. Anthony
Despite a tentative agreement in May on $3 billion-plus in tax cuts and spending, Minnesota Senate Republicans have walked away from the 11th hour deal with Gov. Tim Walz.
After a tentative agreement, the Legislature’s session ended without the tax and bonding bills passed. Both sides continued negotiations until Thursday. The Republican leadership said the sides were far apart; DFL leaders said they had been close to a deal.
Some of the proposed spending and tax cuts would boost Main Street, improve transportation infrastructure and attract federal matching funds, some of which may now disappear. More would have funded public health and public safety.
A special session now seems unlikely.
A number of business organizations are unhappy.
For example, the RevitalizeMN coalition. It sought $20 million in state tax credits next year — and a 10-year extension — to match the federal tax credit. Its member businesses renovate dilapidated structures that are declared historically significant, such as a renovated theater in Ely and a Winona grade school that became apartments last year.
A University of Minnesota study earlier this year found that every $1 of state funding generated $10 in related investment and thousands of jobs that paid construction workers $172 million through 170 historic properties over the last 11 years.
President Chris Sherman of developer Sherman Associates noted there was bipartisan support to renew the historic building tax credit. Now, because it is part of the suspended legislation, it’s back to the drawing board for historic projects such as the Duluth Armory, St. Paul Landmark Center and Minneapolis Northstar Center. There will be lost economic development, according to RevitalizeMN, a trade group of developers, bankers, contractors and laborers.
Another small but significant business group sought $20 million this session.
Minnesota Commercial Railways, an association of 15 short-haul railroads, cover tracks that range up to 25 miles that were abandoned by the national-consolidator railroads. The small lines serve hundreds of Minnesota industrial firms. They have received state subsidies since 1976 because they can’t afford the full costs of track-and-bridge repairs.
“The failure of the Legislature to pass a bonding bill last month is a huge disappointment for Minnesota’s railroads and [business] customers,” said John Apitz, executive director of the Minnesota Regional Railroads Association. “It is perhaps the most important task that lawmakers have in the last year of the each biennium. These [investments would allow] heavier rail cars, which means cost savings for shippers and far less damage to our roads and environment than moving this same freight by truck.”