Barring a special legislative session that might address the matter, the taconite industry will face a tax increase for the 2004 production season.
The state Legislature failed to pass a tax bill, which contained provisions to overhaul the taconite production tax and to eliminate the Taconite Economic Development Fund, a rebate program intended to spur reinvestment by ore producers.
Because no bill was passed, an automatic escalator clause will take effect, raising the tax to $2.14 per ton, an increase of 3.4 cents. Given production estimates for this year, ore plants in the Iron Range would pay $1.2 million more in taxes for 2004.
The production tax pays for economic development programs, education and services in the Iron Range and provides property tax relief for homeowners there.
While taconite producers are not pleased with the tax increase, they were also opposed to ending the 30.1 cents-per-ton rebate program, which was created 14 years ago to help the ailing mining business. That program will stay in effect for now.