Luverne will use law to help businesses
By Sara Quam
Luverne's labor-intensive border city bill became law Saturday.
Two years of testimony and lobbying seem to have paid off, and now the city has to figure out how to use its new economic development tool.
City Administrator Matt Hylen said, "We're taking it slow because it's a new program. We'll use it accurately and 100 percent by state law to make this live up to its potential."
The border city initiative was designed to help compensate Luverne businesses for lower tax rates in bordering states. The city of Luverne hopes that fewer businesses will move to South Dakota and that more will relocate in Luverne.
Hylen said, "We need the jumper cables to keep us alive."
Mayor Glen Gust put in many hours on the road and in visiting with legislators to help them understand the economic impact Luverne felt being a border city to South Dakota.
Gust said that after the bill was signed into law Saturday he got calls from Senate and House members. "They congratulated me and the city for the work we've done. It's going to be great for the city and Rock County."
Right now border cities is set up as a fund that can be used until designated money is gone.
The city is working with Moorhead and lawyers who wrote the bill to help it use the incentives in the best possible way. The first business to use border city legislation could be Netbriefings, a Webcasting company that has preliminarily decided to expand a customer service office in Luverne.
The state has designated $183,000 in sales tax exemptions to new or expanding businesses. It will also be eligible for state funds in the areas of payroll credit, property tax exemption, payment in lieu of taxes, income tax credit and corporate franchise tax credit.
The precedence for some of these programs hasn't been set because other Minnesota border cities like East Grand Forks and Moorhead havenÕt used some of the options yet.
Luverne will now set zones for the incentives so businesses that qualify will be clearly defined by area. The city will likely get up to 100 acres to zone for the incentives. Businesses outside the zones set by the city are also qualified for some of the programs.