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State Representative Paul Anderson
100 Rev. Dr. Martin Luther King Jr. Blvd.
651-296-4317
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GUEST COLUMN
Ethanol industry makes news; special session scheduled; economic update
By Rep. Paul Anderson
A front-page story in the Oct. 12 edition of the Minneapolis Star Tribune detailed the recent history of pollution violations by Minnesota’s ethanol plants. According to the article, the number of facilities in our state totals 21, with five of them paying nearly $3 million in fines and penalties during the past 12 months.
The ethanol industry is important to Minnesota. It has been one of the few examples of manufacturing expansion in rural areas and has given farmers another market for their corn. According to the industry’s trade association, ethanol production in 2009 generated $2.5 billion in economic activity and more than 6,800 jobs in the state. The industry is relatively young and has experienced growing pains in recent years as more plants came on-line and others expanded their production.
One comment in the article really caught my eye when a consultant from Rochester was quoted as saying the industry was "run by a bunch of cowboys who don’t know the rules.” That same person, who’s a member of the LCCMR Commission, said later in the article that the Minnesota Pollution Control Agency was “coddling” the ethanol industry by giving plant operators special help as they work to comply with MPCA regulations.
It’s ironic that the EPA came out last week with guidelines approving ethanol blends up to 15 percent for 2007 and newer cars. Ethanol has been good for rural America and, as technology improves, it and other bio-fuels will help wean our country off foreign oil.
The special legislative session has been set for Monday, Oct. 18 after the President declared a major disaster area in 21 southern Minnesota counties. The decision on individual assistance was delayed by FEMA, which has never happened before, and then finally denied. The bill being worked on by the Legislature will allow the state to help individuals and businesses through what’s called the Quick Start Loan Program.
The bill calls for approximately $74 million in state money to help the areas hit hard by recent heavy rainfall. Also included in that total is $750,000 for the city of Wadena as a result of a tornado that did heavy damage back in June.
Minnesota Management and Budget released financial data for the first three months of the new fiscal year showing that revenue collections were up over $55 million from earlier forecasts. The higher total is due mainly to increased sales tax revenue and corporate income taxes. Their numbers indicate that the recession officially ended in June of 2009, making it the longest and deepest recession since World War II.
However, according to the state’s economic forecasting firm, Global Insight, the recovery will be a long and slow process. They are now projecting slower economic growth than their most recent forecast back in February. For the years 2010 and ‘11, growth in Minnesota’s Gross Domestic Product (GDP) has been scaled back from 5.8 percent to 4.8 percent. And for the out-years in the next biennium, 2012 and ‘13, economic growth is now expected to be 5.7 percent, down from 6.9 percent in the February forecast. That may result in the $5.8 billion deficit number becoming even larger when the next full budget forecast is released in early December.
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