How much are we paying to get jobs through subsidies? That is indeed the big question. Subsidies include property tax abatements, tax increment financing, JOBZ programs and others. The information below should give you an idea at least of the process involved in granting subsidies. Measuring the value or success of a subsidy is another matter that the community needs to address.
“Former DFL Senator Hottinger sponsored Minnesota’s groundbreaking law instituting new standards of transparency and accountability for state and local economic development subsidies. The 1995 law and its subsequent enhancements required that companies who receive public subsidies but fail to reach job creation goals repay the subsidy with interest. The legislation also mandated increased corporate disclosure, wage standards for the jobs created, and public hearings before large subsidies could be granted. The law is credited with recouping millions of dollars in state funds and increasing civic engagement around issues of economic development.”
Below is a link to an excellent video about how Minnesota has addressed issues of accountability and transparency in business subsidies, and to understand the process currently in use in Red Wing and throughout the State. This video quickly helped me get a better understanding of our current system.
You can get the link to the video here, or download the mp3 podcast. This link will take you to the Minnesota Dept. of Employment and Economic Development (DEED) page on Business Subsidy Reporting. Minn. Stat. §116J.94 is the statute on regulating business subsidies.
Kent D. Laugen