Tax credits for a ‘green economy’?

Gov. Pawlenty today proposed an economic incentive plan for “green businesses” in Minnesota, but he invoked a component of the plan that may make the DFL see red in the coming session: JOBZ, Pawlenty’s program that aimed to bring some business to the most distressed areas of the state.

Part of the governor’s program would provide tax breaks — $3.65 million worth immediately and another $82 million after his term is up in 2011.

Qualifying renewable-energy projects would receive an array of tax breaks in a green version of the Job Opportunity Building Zones program. JOBZ is designed to spur job growth in economically distressed regions of Minnesota. Green JOBZ would be open to qualifying renewable energy businesses anywhere in the state for up to 12 years, costing the state $3.65 million in the 2010-11 budget years and another $6.6 million in 2012-13.

But JOBZ has some problems, according to a report earlier this year from the Office of the Legislative Auditor.

Here were the major points:

  • The JOBZ program provides a useful economic development tool, but it has been used at times to provide unnecessary subsidies.
  • The JOBZ program has not provided much help to certain economically distressed areas in Greater Minnesota.
  • The estimates published by the Department of Employment and Economic Development overstate the impact of the JOBZ program.
  • Tthe program has subsidized some businesses that compete with existing Minnesota businesses for the same Minnesota customers.

    The Department of Employment and Economic Development last month moved to change the program in response to the criticism. But from the sound of things today, some DFLers aren’t enthusiastic about funneling tax credits via the program. “I think there are better ways to spend $4 million,” said Rep. Tim Mahoney, chair of the Biosciences and Emerging Technology Committee in the House..

    Update 2:46 p.m. The Green Jobs Task Force co-chair, Rep. Jeremy Kalin, a DFLer, sounded an upbeat note:

    On a snowy and blustery Friday afternoon, more than 4 dozen Minnesotans attended the Attracting Green Jobs sub-committee meeting in Morris. On a cold Monday morning, nearly 100 people attended another sub-committee meeting at the Minneapolis Urban League. Minnesotans are engaged and looking for leadership, and they expect the legislature and the Governor to work together to turn our economy around as fast as possible.