The city of Luverne will likely continue its efforts to get border city legislation passed. The legislation would allow new and expanding businesses tax breaks in hopes of spurring economic growth.
The newly elected mayor and City Council members will vote next week on an ordinance approving continuing lobby efforts.
A Maxfield Research study showed that in some cases Luverne’s businesses are at a disadvantage to similar businesses in neighboring states.
Dilworth, Moorhead, Breckenridge, Moorhead and East Grand Forks are all Minnesota cities that have benefited from similar legislation.
Luverne is unique because unlike the other border cities, more than a river separates it from its major competition. Luverne is nearly 30 miles from Sioux Falls and still feels the damage.
The ghost of legislation past
Last year, the proposed legislation nearly passed; it was in the Senate's tax committee bills. Then, to relieve a stalemate situation, spending allocation was split three ways - one-third governor, one-third Senate and one-third House.
Then the spending was essentially split between party lines with the Senate dropping the tax committee bills in favor of education, human services and environmental spending.
"I think if it wouldn't have been for the one-third split, we would've gotten it," lobbyist Cory Elmer said to the council Monday.
With many new legislators in both Senate and House, Elmer said it may be more difficult to rally the support that the legislation had last year.
"Politically," Elmer said, "we were at a 50-50 chance last year. This year it's more like 60-40 that it won't."
He said if it looks like the legislation has no hope of passing, the city can stop its efforts at any time and end up saving the money it takes to keep trying. The estimated cost could be about $30,000 this year, using the already completed research.
The new legislative session began Wednesday, and the sooner the city starts plugging for the legislation, the better.
"It may help to some degree to be remembered from last year, but some of the major supporters are gone," Elmer said.
If the border city initiative passes, the state will set aside money for Luverne to use toward the tax relief. If the state sees projects that exceed that dollar amount set aside, it can lift the cap for those circumstances that may bring very high paying jobs or a great number of jobs to Luverne.
The cost of pushing the legislation is allowed for in the 2001 budget, but newly elected leaders will formally indicate support in an ordinance at their next meeting. New councilmen and the mayor have indicated they want to move ahead with the legislation.
Border city background
The earlier research study compared border cities, regional cities, western border cities and non-border cities of similar size, and Luverne falls behind in all categories.
The research also showed that Luverne has experienced slower economic growth than other border cities. It is illustrated best in a comparison with Brandon, once a smaller city than Luverne. Brandon's population surpassed Luverne’s through the '90s while Luverne’s stagnated.
Compared with regional cities, Luverne is behind most in household growth, job retention, gross sales and taxable property.
In short, Sioux Falls and Brandon provide stiff competition for Luverne, and other cities aren't suffering like Luverne.