A pink slip for JOBZ?

Minnesota State Roundup

Published May 1, 2008  | May 2008 issue

On the heels of a critical report from the state legislative auditor, some legislators are reconsidering their support for a popular economic development program in rural and distressed areas.

The Job Opportunity Building Zones program offers a variety of tax breaks to businesses willing to relocate or expand existing operations in a broad swath of greater Minnesota. In February, the state auditor accused the JOBZ program of overstating benefits, failing to target the neediest areas and lacking overall focus and accountability.

From 2004 to 2006, about 350 businesses received various tax breaks totaling $46 million. The auditor's report, however, suggested that a majority of businesses would have undertaken at least some investment without the tax breaks.

Then in late March, in an effort to help plug a state budget deficit (see above), the leader of the House tax committee proposed a measure to eliminate all state aid to businesses, including the elimination of JOBZ. That appears unlikely, according to early reports from other legislators as well as the governor's office, but there does appear to be support for revisiting and possibly revamping the program.

Ronald A. Wirtz