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CARZ proposal revs up

Published (3/4/2010)
By Lee Ann Schutz
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CARZ, the governor’s proposed incentive to help keep the St. Paul Ford plant in operation, was held over by the House Taxes Committee March 3 for possible inclusion in its omnibus bill.

Ford has threatened to close the plant in recent years, but the facility received a reprieve until at least the end of 2011 as sales of the Ranger truck it produces have increased.

Sponsored by Rep. Michael Paymar (DFL-St. Paul), HF2329, the Create Automotive Recovery Zone proposal, focuses on creating a series of state and local tax exemptions to help make the site viable to Ford or another vehicle manufacturer.

Under the bill, a special tax zone would be created around the plant and exist for 12 years. To be eligible for tax incentives, guidelines call for a business with a minimum of 750 full-time positions, plus an additional incentive of $3,500 would be offered for every new, permanent job above the minimum. There would be no incentives for contracted employees.

St. Paul Mayor Chris Coleman said the proposal is about retaining and growing jobs, calling the facility a significant asset to his city. He called the CARZ proposal a sign to other employers that the state is serious about keeping and attracting businesses. “Unless we as a state get more aggressive to target these jobs, we won’t have these jobs,” he said.

Committee Chairwoman Rep. Ann Lenczewski (DFL-Bloomington) said that, as with any other tax credit proposal, there is a price tag, and questioned how it would be funded.

Rep. Keith Downey (R-Edina) said that the governor’s supplemental budget pays for the credit through cuts.

“We hear that we have a bad tax climate, but we don’t account for the jobs that are losing because of cuts,” countered Rep. Tina Liebling (DFL-Rochester).

The bill’s companion, SF1232, sponsored by Sen. Ellen Anderson (DFL-St. Paul), was laid over by the Senate Taxes Committee for possible inclusion in an omnibus bill.

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