Loss of JOBZ program could hinder local development efforts

By Susan Larson | The Daily Journal

Published Friday, April 6, 2007

Fergus Falls, MN — A state economic development program for rural Minnesota, which has helped nine businesses relocate or expand in Fergus Falls, could be eliminated unless a bill presented by Rep. Bud Nornes (R-Fergus Falls) is approved by the legislature.

Senate Tax Committee Chair Sen. Thomas Bakk, DFL-Cook, proposed allowing no new projects under the program after May, which prompted Nornes to introduce legislation to extend the program for 10 years.

“It would be like pulling the rug out from prospective businesses,” Nornes said.

The loss of JOBZ could mean some loss of economic development in the area, Economic Improvement Commission Director Harold Stanislawski said. Locally, the program has helped nine companies relocate to Fergus Falls or expand operations.

Examples include the Otter Tail Ag ethanol plant being built in Fergus Falls; ACS, which relocated here in August; and existing industry that expanded, such as Vinylite, Vinco, ShoreMaster and Innova Industries.

“It would be a tragedy to lose one of the best rural economic development tools in Minnesota,” Stanislawski said. “If out-of-state businesses want to come here, it’s the tool to get things done. It brings something of substance to the table and puts us on an even playing field with the Dakotas.”

Some lawmakers believe the Job Opportunity Building Zone costs too much at $50,000 a new job, but a local senator says the number is much lower in rural Minnesota.

“A certain faction believes it’s more expensive than they anticipated,” District. 10 Sen. Dan Skogen (DFL-Hewitt), said. “Northeastern Minnesota and the metro area didn’t use it and it doesn’t have the same appeal, so they look at it as an expense. In District 10 it’s more like $2,000 per job.”

The program, launched in 2004 by Gov. Tim Pawlenty, is designed to offer tax relief to companies that start up or expand in rural areas of Minnesota. It has created 143 jobs in Fergus Falls and 36,000 across the state. It is set to sunset Dec. 31, 2015.

“It resets the clock,” Nornes said of his proposal. “Since the governor is on board, I think it has a good chance of getting through. In Fergus Falls and the surrounding area, it’s been outstanding. A lot of expansion of current business and relocation of ACS (Affiliated Computer Services) to Fergus Falls are a direct result of JOBZ.”

The loss of JOBZ could mean some loss of economic development in the area, Economic Improvement Commission Director Harold Stanislawski said. Locally, the program has helped nine companies relocate to Fergus Falls or expand operations.

Examples include the Otter Tail Ag ethanol plant being built in Fergus Falls; ACS, which relocated here in August; and existing industry that expanded, such as Vinylite, Vinco, ShoreMaster and Innova Industries.

“It would be a tragedy to lose one of the best rural economic development tools in Minnesota,” Stanislawski said. “If out-of-state businesses want to come here, it’s the tool to get things done. It brings something of substance to the table and puts us on an even playing field with the Dakotas.”

Stanislawski likes the balance of the program — in order to get something from the state, businesses have to promise a certain amount of jobs will be created.

“For every family that moves to Fergus Falls (because of a JOBZ-created job) that’s another child in our schools. When it provides a livable wage for a family, people can buy homes and food here and pay taxes. It’s a big circle.”

Skogen plans to vote in favor of keeping JOBZ.

“I think it’s wonderful,” he said. “It’s a great thing and I hope it won’t go away.”