ELY — The Ely School District stands to gain at least $250,000 in new annual funding following the 2026 Minnesota legislative session, lobbyist Jeff Anderson told the school board Monday, calling the Minerals Article that drove much of those gains one of the most significant pieces of legislation to benefit northeastern Minnesota schools in decades.
Anderson, who represents the district at the Capitol through the Costin Group, presented the board with an overview of session outcomes that he said exceeded expectations given divided government, a short even-year session, and no requirement for lawmakers to pass a budget.
“We had very low expectations going into the February session,” Anderson said, “but it turned out far better than most observers expected.”
The centerpiece of the session for Ely was the 2026 Minerals Article, which modernizes how taconite production revenues are distributed across Iron Range school districts. The legislation was developed largely in anticipation of the expected startup of Mesabi Metallics in Nashwauk, which would be the first new taconite facility built in Minnesota in more than 50 years.
Under the new law, Ely Schools will receive $150,000 annually from the School Building Maintenance Fund and $100,000 annually through the Taconite School Fund, two revenue streams the district had not previously been eligible for. The district currently receives about $314,800 annually from taconite-related distributions.
Anderson noted that Ely occupies an unusual position in the regional funding landscape: a mining community and school district without an active mine. Persuading legislators to include Ely required building a coalition that stretched across party lines and across the range.
“We literally started working on this last September with legislators and with (IRRR) Commissioner Rukavina,” Anderson said. “It required a little more work, a little more compromise.”
To protect districts during the mine’s startup period, the bill guarantees minimum payments for the first two years of Mesabi Metallics production, with the Douglas J. Johnson Economic Protection Trust Fund providing backfill if tax proceeds fall short.
Anderson acknowledged the amounts are set and not indexed to inflation, though he noted the rate at which distributions are calculated for other districts was doubled from four cents per taxable ton to eight cents as part of the same legislation.
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Seasonal aid
Anderson also highlighted the creation of a new Seasonal Recreational Tax Base Replacement Aid program, which he said was designed specifically for districts like Ely. The program provides state funding to qualifying districts based on the volume of seasonal, cabin, and recreational property within their boundaries, property that generates significant assessed value but contributes less to local tax base than year-round residential property.
Under the program, qualifying districts could see state aid replace as much as 50 percent of referendum-related levies, reducing pressure on permanent residents and making future operating referendum renewals more sustainable. Final calculations from the Department of Education and Department of Revenue were still pending as of the board meeting.

Permanent School Fund amendment
Anderson urged the board to prepare for voter education efforts ahead of a constitutional amendment that will appear on the November ballot. The amendment would modernize the distribution formula for Minnesota’s Permanent School Fund, which currently holds about $2.3 billion in assets, roughly 98 percent of which was generated by mining and forestry activity on state lands.
The fund has historically earned around eight percent annually but distributed only about two-and-a-half percent to school districts. The proposed amendment would allow distributions of approximately four-and-a-half percent annually. For Ely, which currently receives about $34,932 per year from the fund, approval could mean a roughly 40 percent increase, with no tax increase required.
Anderson cautioned against taking the vote for granted, noting that voters who leave the question blank would effectively be casting a no vote. He encouraged the district to use its website, social media, and community education channels to inform voters, as it did during previous referendum campaigns.

Helium development on the horizon
Rounding out the legislative update, Anderson discussed the passage of Minnesota’s first comprehensive regulatory framework for helium extraction, covering Cook, Lake, and St. Louis counties. The legislation allows commercial helium production and gas development projects while prohibiting oil wells and hydraulic fracturing.
The taxation framework for helium production was not addressed in the 2026 session and will carry over to 2027.
Anderson said he anticipates potential litigation similar to what has accompanied other natural resource development projects in the region but suggested opposition to helium extraction may be more limited given the nature of the operation.
Anderson credited state Sen. Grant Hauschild and state Rep. Roger Skraba for championing Ely’s interests across multiple legislative priorities during the session.
“I have no problem recognizing both of them on both sides of the aisle,” Anderson told the board. “They both carry a lot of weight.”