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Story falls short in charge that IRRR funding is politically skewed

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Has political favoritism toward the Iron Range’s most powerful elected official brought an unfair share of funding from the Department of Iron Range Resources and Rehabiliation to communities in Sen. Tom Bakk’s Third District?

That was the contention in a report in the Star Tribune this past Sunday. I read it with interest, since it isn’t every day that the Strib reports on our region. The headline, “Lopsided grants spark questions of favoritism,” had plenty of sizzle. But as I read it, and then read it again assuming I had missed something, I kept thinking of the old Wendy’s commercial: “Where’s the beef?”

The basic story line was that Bakk was somehow using his personal or political relationship with Commissioner Mark Phillips to bring an inordinate share of IRRR funds to communities in his district since 2015. This story line faced obstacles in that both Bakk and Phillips denied they have a personal relationship and Phillips said Bakk doesn’t weigh-in with him on projects that the agency considers for funding. The story notes they both have homes on Lake Vermilion, but that’s evidence that Lake Vermilion is a popular place and nothing more.

The story noted that Bakk is “widely credited with having helped save Phillips’ job after the Timberjay reported on the hiring process for Joe Radinovich back in April. That may be, but it’s tough to link that to funding decisions that were made prior to that event.

The bigger problem is that since 2015, the lion’s share of IRRR funding for community projects hasn’t gone to Bakk’s district— it’s gone to Sen. Tomassoni’s district. In fact, $23.8 million went to community projects in Tomassoni’s Sixth District compared to $11.3 million to communities in Bakk’s district. Justin Eichorn’s Fifth District received $4.7 million, while the Tenth District, located in the Crosby area, received $2.2 million.

But the Strib pointed out that if you compare the average grant on a per-capita basis, Bakk’s haul stood well above the other senate districts. That may well be true, but it’s not clear that it’s a meaningful statistic.

Bakk’s district has, by far, the largest number of cities in the taconite tax relief area and they are, as a rule, very small in population— think Orr, Cook, Tower, Babbitt, Silver Bay, Tofte, Lutsen, and Grand Marais. The nature and size of the communities in Bakk’s district inevitably skews any comparison based on per-capita. There are basic realities to most public projects, in that they cost a lot whether it’s a project in Hibbing or a project in Orr.

Let’s assume that the IRRR awards Hibbing $1 million for a sewer project. If the agency was expected to fund equally from a per-capita basis, Orr could expect no more than about $14,000 for a similar project there. But that wouldn’t even cover mobilization costs, even for a modest job.

I’ve monitored and reported on IRRR spending for decades and, in general, the agency does a pretty good job of “spreading it around.” In doing so, the smallest cities are almost inevitably going to see more funding on a per-capita basis. With the vast majority of the small cities in the Taconite Tax Relief Area found in Bakk’s sprawling district, I suspect that this disparity has existed for a long time, which suggests it’s more a matter of geography and demographics than political influence. The alternative, of course, is to direct even more of the IRRR’s money to the bigger Iron Range core cities, which already see the bulk of the funds. That would have a hugely negative impact on smaller communities in the TTRA and I would hope the IRRR doesn’t move in that direction.

What’s more, the community projects examined by the Strib represent just one of several funding streams. The analysis did not consider the millions of dollars that the agency directs to Giants Ridge (which is in Tomassoni’s district) or to area school districts through their school collaboration program. It didn’t consider funds directed back to mining companies for reinvestment in plants located mostly in Tomassoni’s district.

And, ultimately, if you assume that the funding process is actually based to some degree on merit (which I believe it is), the funds are more likely to go towards communities that are the most proactive in community and economic development. Ely has certainly been a good example of that and they’ve attracted a significant amount of funding in recent years. The Lutsen/Grand Marais area also has a very active economic development authority which has been developing worthy projects on workforce development and strengthening the Lutsen Mountain facility, which is a major economic driver in Cook County.

These areas, while part of the TTRA, are more tied to outdoor recreation and tourism than the core Range cities and they are attracting new businesses and new residents with a strong interest in community and economic development who are getting involved and generating sound proposals. Should the IRRR ignore merit and focus on a per-capita approach to project funding? That would be a disaster for communities outside the core Range.

If the Grand Rapids area sees less funding, that could well be because community organizations there tend to turn to the Blandin Foundation, which pours millions into that community.

Let’s hope the IRRR stays the course and doesn’t let questionable statistical analysis divert them from their mission to help all the communities of the TTRA.

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