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Serving Northern St. Louis County, Minnesota

House to vote Monday on Northshore UI extension

David Colburn
Posted 1/18/23

REGIONAL- A bill to provide extended unemployment benefits to Northshore Mining workers in Babbitt and Silver Bay passed the Minnesota Senate last week, but action on a companion bill in the House is …

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House to vote Monday on Northshore UI extension


REGIONAL- A bill to provide extended unemployment benefits to Northshore Mining workers in Babbitt and Silver Bay passed the Minnesota Senate last week, but action on a companion bill in the House is still pending.
More than 400 Cleveland-Cliffs workers at the Babbitt mine and Silver Bay pellet processing facility have been in limbo since last May when the company idled both facilities in response to changing company needs and an ongoing dispute with the Mesabi Trust over royalty payments on ore extracted from Babbitt. Cleveland-Cliffs is not expected to restart production until at least April, while unemployment benefits for workers started running out last November.
The bill provides for 26 weeks of additional unemployment, retroactive to the date at which an individual’s initial benefit ran out. The measure received bipartisan support in the DFL-controlled Senate, passing 56-10, but not before Republicans objected to a clause exempting Cleveland-Cliffs from having to pay more into the state’s unemployment fund as a result of the extra benefits.
District 3 Sen. Grant Hauschild, DFL-Hermantown, said the break for Cliffs was based on previous unemployment extension bills, and also because of the importance of the company to the regional economy.
“The reason for that is because this is one of the largest employers in my district,” he said. “I want to make sure that these workers get back to work as soon as possible. I want to make it as easy as I can for that to happen.”
But in a departure from political norms, Republicans were reluctant to provide any break to the corporate mining giant.
“If I was a mom-and-pop business owner, which I am, I would not be getting the same treatment that Wall Street seems to get,” said Sen. Rich Draheim, a Republican from Madison Lake, during a Senate committee hearing on Tuesday for the bill. “I have a hard time bailing out a company that had $20 billion in revenue last year.”
The cost of the bill will be paid from the state’s $1.7 billion unemployment insurance trust fund, which is funded by company taxes. The additional payment would affect Cleveland-Cliff’s “experience rating,” which is used to calculate those taxes when extended benefits are paid. Hauschild’s original version would have exempted those benefit payments from being used to calculate the company’s experience rating, lowering their contribution to the trust fund.
Hauschild agreed to an amendment that would subject Cleveland-Cliffs to the increased rate, but excludes Dyno Nobel, a small company that provides blasting services at the mine whose workers have also been affected by the closure.
District 7B Rep. Dave Lislegard, DFL-Aurora, authored the corresponding legislation in the House, and District 3A Rep. Roger Skraba, Republican-Ely, has signed on as a co-author. Introduced Jan. 4, the bill was assigned to the House Workforce Development Finance and Policy Committee.
On Tuesday, an amended version of the bill reflecting the changes made in the Senate was reported out of committee and referred to the House Ways and Means committee, which was scheduled to consider the measure that evening, according to the House calendar.
Late Tuesday evening, the Timberjay reached Skraba by phone for an update.
“It passed,” he said. “It could have gone to the floor tomorrow, but it’s only a ten-minute session to read a bunch of bills. Right now it’s scheduled for Monday. I think there will be some movement to try to knock it down to 13 weeks. But what we’re looking at right now is 26 weeks retroactive to when their unemployment ran out.”
Skraba called out those who would angle for reducing the length of the extended benefits, decrying the supposed money-saving tactic at a time the state has a $17.6 billion surplus.
Noting that the mine and pellet facility may not reopen before the extended benefits run out, Skraba was skeptical that another unemployment insurance extension could be pushed through if that happens.
“That’s a really hard sell,” he said. “Even the workers know that. They’re thankful that we’re doing what we can do.”