Subsidized companies didn't produce jobs

Posted at 8:00 AM on March 30, 2011 by Michael Olson
Filed under: Around MN

125 companies in Minnesota that accepted subsidies from local and state government failed to create a single job. The Star Tribune dug around and examined more than 650 job-creation deals that took place between 2004 and 2009. Beyond the 125 that didn't produce a job, "at least 46 of the subsidized companies produced no lasting jobs."

Excelsior Energy, for example, promised 150 jobs and a new power plant on the Iron Range in return for $9.5 million in state loans in 2002 and 2004. The plant has yet to be built.

Faribault Woolen Mills promised to keep the state's oldest factory operating with the help of $575,000 in state and local loans. In 2009, the factory was closed, sending the last 36 employees out the door.

House guts $60 million of funding requests from Rochester
"It is disappointing to see that they've, for the moment at least, on the house side taken out some of those things," said Rochester Mayor Ardell Brede. The city is hoping to expand a library, remodel their recreation center and Boys and Girls Club. If the House cuts advance, those projects won't happen (KAAL).

Alexandria police and parks endure budget cuts
The police department, which also includes dispatching and animal control, is bracing for the biggest cuts. This includes not hiring two positions - a full-time dispatcher at the new police station and a part-time community service officer (Alexandria Echo Press).

Insight Now

The Duluth/Arrowhead Economy - In a state of flux
An economic evolution is underway in Northeastern Minnesota. New mining projects, continued development along the North Shore, the growth of health care and increasing numbers of self-employed workers present a fresh generation of choices. While the economy shows signs of life, the path to prosperity raises tough questions about jobs and quality of life.

The Northland's NewsCenter (KBJR-TV) and MPR News have joined forces for a face-to-face forum on April 5 on the economic future of Minnesota's Arrowhead. To learn more just click here.

But to get the ball rolling in advance of the forum, KBJR's Barbara Reyelts talked with two economists to get a handle on how mining, tourism and technology will all morph and change the Arrowhead economy.
Drew Digby, labor analyst for the state Deparment of Employment and Economic Development. Tony Barrett, Professor of Economics in the School of Business & Technology at College of St. Scholastica


Read and watch more about the Duluth economy, then comment