BEST BOONDOGGLE Minneapolis 2005 -
In its official platform for 2004--Section 1, Article K, to be precise--the Republican Party of Minnesota resolutely declared that it supports "a fair and honest competitive business environment and therefore oppose(s) corporate welfare." Ah, good old-fashioned GOP principles. Fair and honest. Don't you miss them? You certainly would if you happened to own a business that competes with any company that qualifies for Republican Gov. Tim Pawlenty's beloved Job Opportunity Building Zones program. For those not clued in to the particulars of the "mother of all economic development tools" (Pawlenty's words), a primer is in order. Under the JOBZ program, handpicked companies receive a 12-year reprieve from doing what every other business is required to do: pay their taxes. Along with this monster property tax break, they also don't have to pay a nickel in sales taxes on materials used for construction or on any vehicle garaged on the site. Pawlenty has argued that the JOBZ program has spurred new development in greater Minnesota and made the state more attractive to investors from beyond the borders. But by the end of 2004, the numbers told a more dispiriting story. Of the 104 companies that received JOBZ benefits, only six came from out of state. Forty-one others merely shifted their operations from one location in Minnesota to another. The remainder consisted of either start-ups or existing companies that used the tax break to expand their operations. Since JOBZ-enrolled companies get that nifty tax holiday, at the very least you might think they would compensate their employees a little more lavishly than their rivals. You'd be wrong. By December of 2004, the average hourly wage of someone working at a JOBZ site was estimated at $3.39 below the state average. And then there's this other nugget: Over a quarter of the JOBZ program jobs pay under $10 an hour.