Chances for tax-free zone are poor, city officals say

Published 12:00 am Saturday, February 8, 2003

The chances of Gov. Tim Pawlenty’s tax free zone bill being implemented in Albert Lea aren’t great according to city officials, as it is currently written.

&uot;The law as it’s drated has certain rules for it for what you have to meet in order to qualify,&uot; City Manager Paul Sparks said.

Basically the problem is that the city and the county aren’t poor enough.

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A bill introduced in the house laid out a set of criteria on which cities who apply for the zones will be judged. According to Bob Graham, the city planner, the criteria are: community support, methods to increase economic opportunity, reduction in the regulatory budren, job training, high unemployment, recent significant job decrease that has not been replaced, significant deteriorization or under-utilization of properties, a population decrease since 1980 and evidence that the city can provide adequate infrastructure for the development.&uot;

There would be 10 tax-free zones of up to 5,000 acres implemented in counties around the state. They would exempt the properties from having to pay income, sales and local tax options for businesses or individuals who are working or living in the area.

According to an examination of county data versus state wide data by Graham, Freeborn County is in a good position. This isn’t exactly good when applying for a tax free zone.

The county is ranked in the middle of the state’s 87 counties on many of the criteria, including median household income and the number people below the poverty level. In retail sales, the county is 22nd overall in the state and 14th for outstate.

What Albert Lea does have going for it, according to Sparks is the loss of Farmland and a decline in county population since 1980.

Counties throughout northern, rural Minnesota fit the criteria of the bill much better than Freeborn county. The way the bill is written now, Sparks says, the city has slim chances. He hopes that language will be added to give out the zones regionally and to allow counties to split the zones between themselves.

Rep. Dan Dorman, R-Albert Lea, who is a co-author on the house bill, says he feels the city is taking the wrong approach on the issue.

&uot;This bill was written with communities like Albert Lea in mind,&uot; he said. &uot;I spoke with people at the governor’s office and they said they certainly would include cities like Albert Lea in the bill.&uot;

&uot;The language is going to change,&uot; Dorman said.

He thinks that when the bill gets to the legislature, which will likely happen in April, the wording will better fit situations such as Albert Lea’s.

&uot;Obviously we are not going to be in

automatically, but will go to counties like Freeborn,&uot; he said.

Dorman said it is important for the city and county to begin working toward a plan for the tax-free zones.

&uot;I think that the best thing they can do now to position themselves for it is to start planning now for it,&uot; he said. &uot;Whether or not they are successful I think it’d be a good idea.&uot;

&uot;If we can put together a plan that will be competitive I think we’ll be in good shape.&uot;