In good news for the Becker County Museum and Heartland Trail projects, the Minnesota Legislature passed a $1.9 billion bonding bill Thursday, Oct. 15.
The bill also provides what is essentially a $200 million tax cut for businesses and farmers, who will be able to depreciate 100% of equipment purchases the first year, rather than having to spread it out over six years, said Rep. Paul Marquart, DFL-Dilworth, who chairs the House Tax Committee. “That is really going to be helpful to the economy,” he said in a telephone interview.
The Becker County Museum will receive $1.85 million towards its new building, to be an addition to the Detroit Lakes Community Center.
The Heartland Trail will receive $2 million towards construction of the multi-use trail from Detroit Lakes to Frazee.
“This is a huge win for our area for two reasons,” Marquart said. “One, it’s a bipartisan bill. It’s three weeks before an election and yet we got a bipartisan agreement between a Democratic House, a Republican Senate, and the governor.”
Minnesota can set a good example to the nation, divided as it is, that the parties can work together to get things done for the people back home, he added.
“Two, I know how hard people worked on these projects -- Becky Mitchell and her group with the museum, Bruce Imholte and his group with the Heartland Trail,” Marquart said. “Local people put a lot of work into these projects. They have to put a plan together, then meet in St. Paul with the Capital Investment Committee, and give a presentation to the committee when it comes (to tour project sites),” he said.
“I’m ecstatic,” said Imholte, who sits on the Detroit Lakes City Council and has long been involved in the Heartland Trail project. “I talked to Rep. Marquart earlier today, he was very excited,” he said.
The $2 million will help build a bridge for the Heartland Trail over County Road 10 near Acorn Lake, and allow work to proceed from the new bridge to Highway 87 and then into Frazee, Imholte said.
The downside is that the Heartland Trail funding is only half of the $4 million originally requested, so design and prep work for new segments of trail from Park Rapids to Osage, and from Hawley to the Buffalo River State Park, will have to wait for another funding cycle, he said.
But work is progressing nicely on the stretch from Detroit Lakes to Acorn Lake, said Detroit Lakes Chamber Tourism Director Cleone Stewart.
"Be sure to include in the article that the trail is not open to riding until totally completed," she said in an email. "We've had calls at the Chamber with people wanting to ride it, and it's not ready."
Becky Mitchell, the executive director of the Becker County Museum, said she was “very excited” at the news that the museum will receive $1.85 million towards a much-needed new building.
It’s less than the $3 million original request, she said, “but just the fact that we were able to maintain a spot on the revised bill is incredible.”
The museum will raise funds to fill the $500,000 gap needed to pay for the project, she said.
“Our public drive was about to start last spring, when the COVID hit,” she said. “We will raise the remaining dollars and will break ground in the spring of 2021,” she added. “This is the time,” she said to people considering a donation. “It’s happening, and every pledge helps.” She urged people to call 218-847-2938 to donate.
Marquart said he is especially pleased with the tax action in the bill, which fully conforms that section of Minnesota tax law to federal tax law.
“Republicans liked the $200 million in tax cuts,” which makes state tax law conform to IRS section 179 expensing, he said.
Section 179 of the federal tax code dictates when businesses can deduct the cost of purchasing certain equipment. In 2019, Minnesota conformed to some federal tax reforms, but not many of the expensing provisions. This put small businesses and farmers at a disadvantage and hit many with retroactive bills, said Minnesota Chamber of Commerce President Doug Loon.
“This helps lay the foundation to help Minnesota’s economy recover and grow, and retain and create jobs,” he said.
Marquart said farmers and others will also benefit from a change in how the state handles “like-kind” exchanges, such as trade-ins involving combines or large tractors.
The bonding bill includes $320 million in transportation bonds for highway construction, and $169 million in public works funding for things like sewer and water projects around the state. “Most of that goes to rural Minnesota,” Marquart said.
Bond refinancing in August saved the state $41 million, money that will help finance the big new building bond. “That’s one of the benefits of doing this now,” he said. “Interest rates are low.”
Gov. Tim Walz praised the bonding bill on Thursday and is expected to sign it.