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Legislative News and Views - Rep. Jerry Hertaus (R)

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Failed policy of good intentions

Monday, March 21, 2016


By Rep. Jerry Hertaus

Those whom reside year-round in northeastern Minnesota know that it is a special place, but also view their region with a deep sense of pride belonging to a culture largely dependent upon the mining industry. These most passionate Minnesotans call themselves “Rangers” named after the great and abundant Iron Ore Range that has satisfied our nation and the world’s irregular demand for steel.


In 1941, on the heels of global economic collapse during the Great Depression and before the attack on Pearl Harbor, the IRRRB (Iron Range Resources & Rehabilitation Board) was established under then Gov. Harold Stassen for the purpose of diversifying northeastern Minnesota’s local economy in hopes of diversifying the local economy away from mining. Challenging is the fact that these communities are largely scattered across the region and struggle like many of greater Minnesota’s small towns in the agricultural region. Seasonal tourism is dependent upon discretionary spending during good times. Agriculture is also seasonal, but less volatile with the demand of 9 billion people globally to feed. Commodity prices fluctuate but agriculture is not likely to ever shut down. Mining removes a finite exhaustible resource where farming is producing a renewable resource.

This last week, the Legislative Auditor (OLA) issued audit findings of the management and effectiveness of the IRRRB. The bottom line is that the IRRRB has made some modest improvements to the regions diversity, but given its 75 years of stewardship to diversify the region, it certainly appears that it has been more a failure than a success. It is rife with failures of accountability, providing subsidies year after year to failing enterprises and has serious constitutional issues with its structure of sitting legislators serving upon its board. The IRRRB is an example of big government central planning failure. Instead of allowing the efficiency of the free market to determine success and failure of local businesses and the local markets they serve, the IRRRB has wasted untold hundreds of millions of dollars of public treasure in supporting failed or failing enterprises.

Today, in a post World War II global marketplace, America finds itself in direct competition with other global economies and markets, many of which America rebuilt after the war. While the good times for Rangers were the two decades of post world war reconstruction and a strong export market, today we compete globally. Although we can help displaced workers for the short term, the problems for the Range are here to stay for most likely a generation. Republican legislation to help unemployed Rangers includes relief to businesses on the Range too. It is clear that after 75 years, the IRRRB has fallen way short of its mission. Minnesota needs to foster a truly competitive tax climate which encourages investment and growth of new and established businesses. Consumer demand or the lack of it determines which businesses succeed or fail. Not big government. The IRRRB is a 75 year example of good intentions failing its mission.

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