Iron Range schools to get boost from taconite taxes

  • Article by: CODY NELSON , Star Tribune
  • Updated: April 19, 2014 - 5:52 PM

Senate Majority Leader Tom Bakk spearheaded an initiative to divert taconite mining taxes to the schools.

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Senate Majority Leader Tom Bakk

Photo: Glen Stubbe, Star Tribune

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Many Iron Range schools are facing aging buildings and declining enrollment, leading some districts to close old facilities and consolidating them into new ones.

Rural voters are notoriously stubborn when it comes to passing levys, a critical source of funding for Minnesota schools, but Senate Majority Leader Tom Bakk, DFL-Cook, etched a provision in this year’s tax bill that diverts money from taconite production and mining taxes into a fund securing a long-term money source for Iron Range schools.

Gov. Mark Dayton signed the tax bill into law late last month.

While school districts across the state continue to claw for dollars, Bakk said the tax could add between $10.5 million and $12 million annually into a pool for schools only. Funding levels will ramp up to that level in the next two years with about $6 million from this year’s taxes and $8 million from 2015’s, he said. The tax reallocates just a few cents for each ton of iron ore mined.

“There’s 15 school districts and we’ve got a lot of old buildings,” Bakk said. Remodeling those buildings isn’t always the cheapest option, he said.

The Iron Range Resources and Rehabilitation Board, or IRRRB, the state’s agency for development in the area, will manage the fund, and its board will vote on project requests. The board’s commissioner, Tony Sertich, said taconite mining companies’ taxes don’t currently go toward school construction, but this provision will change that.

“This is a way to recognize their responsibility,” Sertich said.

The IRRRB is charged with developing guidelines for what projects will be funded. Sertich said it’s too early to know what those guidelines will be, but the board will begin drafting them soon.

There’s little pushback to the new funding mechanism, Bakk said, but any controversy would come when towns begin introducing their plans for schools.

Relocating or co-­locating schools is often a touchy subject for communities, but the tax provision has a requirement that schools’ funding requests must originate in and be approved by the communities they’ll affect.

Sertich said the new funding source encourages collaboration between schools, which will be necessary to ensure that they survive. But to be effective, he said, proposals must originate in each community.

“All we’re going to do is help them pay for it,” Bakk said. “These are going to be very tough decisions.”

In 2009, voters in the St. Louis County School District approved $78 million in bonds to remodel three schools and build two new ones. The project also closed three K-12 schools.

Bakk expects the district to seek some of this new funding retroactively, which could help pay back the bonds quicker or lower residents’ taxes.

“I just think it turned out to be really great for kids,” said Bob Larson, chairman of the district’s board of directors. “If we can get some help from taxpayers, that’s another benefit.”

Though closing some schools was a tough sell and some parents still disagree with the referendum, Larson said, most are coming around to it. On the student side, he said both the educational experience and facilities have been improved.

“I think as far as the students are concerned, they’re feeling quite good about what we’re doing,” Larson said.

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