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Don Davis, Published December 01 2009

Minnesota lawmakers seek money to create jobs

By Don Davis, State Capitol Bureau

ST. PAUL – The problem is finding money to create jobs while the economy remains troubled. The solution remains a work in progress two months before Minnesota legislators convene in their 2010 session.

A Wednesday finance report is expected to show that finding that money will be even worse than expected as tax revenues continue to stumble.

“Our collections throughout the fall dropped considerably,” Management and Budget Commissioner Tom Hanson told the House jobs task force on Monday.

A budget deficit as high as $7 billion is predicted for the $32 billion two-year budget that began July 1. That makes it difficult to fund new job-producing programs and leaves borrowing money to fund public works projects as the prime way the state can boost employment.

House Majority Leader Tony Sertich, DFL-Chisholm, said it will take time for legislators to draw up other plans to bolster employment.

Rep. Tom Rukavina, DFL-Virginia, said the emphasis must be on a public works funding bill.

With the focus on public works projects – funded by the state selling bonds – Sertich said he and Senate leaders will work on moving a bill through the Legislature within a month after it convenes on Feb. 4. A so-called bonding bill provides money for construction projects such as new state buildings and fixing college facilities.

Legislative Democrats lean toward borrowing about $1 billion, saying they want to create as many jobs as possible. Republican Gov. Tim Pawlenty has yet to say how much borrowing he would support, but he traditionally wants a much smaller bill than Democrats.

“A couple hundred million doesn’t have that big of an impact in a bonding bill,” said Rep. Alice Hausman, DFL-St. Paul, who leads the House committee that approves public works projects.

While the House jobs task force was discussing bonding Monday, a Senate committee dealing with the issue was preparing for its final two days of touring potential public works projects beginning today. Sen. Keith Langseth, DFL-Glyndon, chairman of the Senate Capitol Investment Committee, will begin to pare down the list of proposed projects, costing nearly

$3 billion, after getting a firsthand look at projects.

A big part of how large a bonding bill is approved is determined by the size of repayments policymakers are willing to approve.

Traditionally, Minnesota has kept its bond repayments to 3 percent of the state’s revenue. Lawmakers and Pawlenty inched above that ratio

this year, and any bonding bill approved next year would put it well above 3 percent.

A Fergus Falls delegation told the jobs task force about problems they face by being close to North Dakota.

“We do not have the economic development resources to compete,” Mayor Hal Leland said, adding that some companies have moved their headquarters to Fargo and other North Dakota communities due to that state’s more business-friendly laws.

In nearby Perham, snack food company Barrels of Fun and others have received state aid that helped to significantly increase business, added President Jim Pederson of the Fergus Falls Economic Improvement Commission.

Leland and Pederson urged lawmakers to keep border cities in mind when looking for ways to add jobs.

Davis works for Forum Communications Co., which owns The Forum. He can be reached at (651) 290-0707.