Column: Don’t ignore facts about JOBZ

Once again, the Red Wing Republican Eagle has shown its true partisan colors with its glowing endorsement of the Pawlenty administration and the JOBZ program in a July 11 editorial. The paper states that a new business would not even be considering a move to Red Wing without the program and criticizes legislators for ever questioning the program’s success.

I agree that, as a state, we need to offer programs and incentives to help get new businesses up and running and promote businesses to relocate here from other states and countries.

At the time it was enacted, there was bipartisan support for the JOBZ program and its promises to bring employment and development to rural areas facing economic hardships.

However, the facts demonstrate that when implemented, JOBZ has not had the economic successes that the paper would lead you to believe.

In a review of the JOBZ program earlier this year, the independent and non-partisan Office of the Legislative Auditor found that the effectiveness of the program has been stunted by a lack of oversight from the Department of Employment and Economic Development and movement away from the program’s original legislative intent.

The legislative auditor found that DEED failed to target JOBZ to the parts of the state that most needed the economic boost, stating “there is little or no relationship between the level of economic distress, or need, in a county and the new jobs created by JOBZ businesses.” The report went on to say that the cost-effectiveness of the program has been compromised because DEED failed to prioritize where JOBZ zones were established.

The legislative auditor found that the insufficient regulation of JOBZ by the department has also led to benefits being extended to businesses that would have expanded in Minnesota with fewer or no incentives. This lack of oversight has also allowed some businesses to receive tax breaks even if they fail to meet the job-requirement standards in their contracts.

Worse, the review found that some JOBZ contracts are so poorly worded that they do not even require businesses to maintain the jobs they have created for the entire time period they receive tax incentives.

Based on these findings, I’ve concluded that instead of bolstering the economy of rural Minnesota, JOBZ has proven to be a way for businesses to defer their tax payments to the state. Moving a business from Worthington to Red Wing, for example, does nothing to improve our state’s economic vitality. It simply causes a hole in the tax base of its original community and provides no contribution toward the infrastructure or education of the children in its new community.

Our state has a huge competitive advantage with our skilled and highly educated workforce and I look forward to considering opportunities in the Legislature to attract new businesses to our state. As an elected official, it is my duty to thoroughly review the costs and benefits of every taxpayer-funded program and base my support on the best interest of Minnesotans.

Unfortunately, when offering its support, the Red Wing Republican Eagle does not conduct a factual assessment of a program’s merits; but rather bases it on the political affiliation of those advancing the program.

Steve Murphy, DFL-Red Wing, can be reached at 651) 385-7649 or sen.steve.murphy@senate.mn.

Tags: opinion, murphy, steve, jobz