Commentary by Sandy Layman

Last night WDIO news featured a story of a young bride, originally from Virginia, Minnesota, who had hoped to be married at Giants Ridge Golf Course in July but, because of the state shutdown, had to scramble to make other arrangements. The Giants Ridge golf courses, while managed privately, are owned by the Iron Range Resources and Rehabilitation Board, which is a state agency. The news story mentioned that July is the busiest month at Giants Ridge – not just for weddings - but for golf, which was not considered an “essential service” of the state.

The incident posed a crisis, no doubt, for this bride and groom but is actually part of the vast collateral damage from a much larger crisis when a state government comes to a standstill. The overall cost to Minnesota of this latest shutdown will be hard to estimate, but public officials should be devising strategies right now to make sure it does not happen again.

Close to home, northeastern Minnesota has its own state agency in the Iron Range Resources and Rehabilitation Board. It is unique; no other state in the country has an agency that focuses on a natural resource-based region that receives dedicated funding generated from the mining of its resources. The taconite production taxes, paid by mining companies in lieu of property taxes, send tens of millions of dollars to the agency each year to fund its operations, programs and projects. In 2011, the agency celebrates its 70th anniversary, having been formed in 1941.

Seventy years ago it likely made sense to establish the Iron Range Resources and Rehabilitation Board (then called a commission) as a state agency. The offices were housed in St. Paul and the budget was insignificant. For the last several decades however, the agency has grown substantially, is headquartered in Eveleth, operates with a sizeable annual budget and oversees an approximate $100 million fund recently renamed the Douglas J. Johnson fund. Expenditures are approved by a board comprised primarily of state legislators. All of these factors are cause for attention and questioned each year by the administrative and legislative branches of government. In fact, during the 2011 Legislative Session, much debate took place regarding legislation that would have tapped into the Douglas J. Johnson Fund to help solve the budget deficit.

The question the citizens of northeastern Minnesota should be asking is: Does it make sense today for the Iron Range Resources and Rehabilitation Board to be structured as a state agency? During my years as commissioner of the agency, I realized the benefits of serving on the Governor’s cabinet and having direct access to the Executive Branch of government. These benefits, however, were countered by the enormous burden that is endemic to state government bureaucracy. Moreover, partisan politics consumed time that should have been spent furthering the economic development mission of the agency.

Back in 1999, a report issued by Neil Hamilton, who was then Trustees Professor of Regulatory Policy at the William Mitchell College of Law, advised that the structure of the agency was likely unconstitutional because of blurring of legislative and administrative oversight. He recommended the agency should be restructured as a public corporation with a board of directors.

I don’t know if a public corporation structure is the answer. I do know that it would be a shame to waste this latest state government crisis.

Sandy Layman served as a citizen member of the Iron Range Resources and Rehabilitation Board from 1999-2003 and as commissioner of the agency from 2003-2011.

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