Dear Legislature, please give me at least $60 million in taxpayer money over 10 years to create jobs in a depressed part of the state.
And don’t tell anyone who I am until after the spending becomes law.
Sounds like a hard sell. But it worked — mostly — for a mystery company that could open a factory to make wooden siding on the Iron Range.
Lawmakers and Gov. Mark Dayton approved paying the company up to $3 million per year if the plant achieves its production goals. But a separate measure that forgave sales taxes for the materials to build the plant went poof when the governor vetoed the omnibus tax bill.
At the company’s request, state officials signed a nondisclosure agreement so that its name wouldn’t slip out. Canada and the state of Michigan are also supposedly wooing this company. It was all hush-hush until Minnesota Public Radio reported the subsidy and the secrecy agreement in April.
“We went along with this because this is a big apple,” said Mark Phillips, commissioner of the Iron Range Resources and Rehabilitation Board, the state agency taking the lead in wooing the company. With a promised 250 jobs, that works out to a $240,000 incentive per job, though Phillips and Rep. Jason Metsa, DFL-Virginia, say the ripple effect of those jobs will create an equal or greater number elsewhere.
It all sounds great: build a factory in Hoyt Lakes that produces 400 million square feet a year of siding to protect America’s homes with Minnesota-grown wood.
Phillips and Metsa point out that shielding the name of a company seeking incentives isn’t a new thing for Minnesota. In fact, Dayton and state officials shepherded a $15 million subsidy package for Baxter International in 2013, disguising its name as “Project Fern.”
Still, it’s distressing to see politicians and state officials go along with the corporate demand for secrecy.
Who knows, someone might have had some information about the company that would have helped lawmakers understand what they were getting into.
Metsa knows who the mystery company is, and he had to be careful not to mention its name during legislative testimony. A few lawmakers also wanted to know, and they could find out if they signed the agreement.
“They didn’t want to get dragged into anything that was partisan about it,” Metsa said Thursday. “If I were a company, I wouldn’t want to get involved in messy partisan politics either.”
Isn’t that the price of asking for taxpayer handouts?
Phillips said the nondisclosure actually benefited the state, by preventing other states from playing the incentive game with the company. Most importantly, Phillips and Metsa said, no money changes hands until the company commits.
“The money cannot leave the coffers until they build the building,” Metsa said. “There’s really no cost to the taxpayer until that point.”
Phillips said the public will finally learn the name of the company when it makes a presentation before the IRRRB on Tuesday.
That’s about $30 million too late.
Contact James Eli Shiffer at email@example.com or 612-673-4116.