Three Iron Range mayors have signed onto a letter to the Minnesota Legislature and Gov. Tim Walz that expresses concern and growing frustration over the fiscal direction of the state.
Babbitt Mayor Andrea Zupancich, Bovey Mayor Tony Yunk and Virginia Mayor Larry Cuffe are among nearly 100 Minnesota mayors who signed the letter.
“Minnesotans watched an historic $18 billion surplus disappear in a single biennium, only to now face an updated projected $2.9—$3 billion deficit in the 2028-2029 biennium,” the letter said. “As mayors, we see firsthand how these decisions ripple outward. Fraud, unchecked spending, and inconsistent fiscal management in St. Paul have trickled down to our cities—reducing our capacity to plan responsibly, maintain infrastructure, hire and retain employees, and sustain core services without overburdening local taxpayers.”
The letter originated with Cross Lake Mayor Jackson Purfeerst.
The letter cites a Minnesota Chamber of Commerce report that shows the state slipping in national economic rankings including GDP growth (33rd), job growth (39th), labor force growth (40th), per-capital income growth (33rd), median household income growth (46th), tech job growth (44th), overall tax competitiveness (44th), and the net out-migration of nearly 48,000 residents from 2020 to 2024.
The letter said Minnesota residents deserve better than deficits, economic decline, and policies that push families and businesses away.
Zupancich, a real estate business owner, said she’s seeing residents leaving the area and businesses closing.
“I’ve had more people in the last two or three years saying they are going to get out of the state because they can’t afford their homes,” Zupancich said. “I’ve had one sale say they’ll take a lower price just to get the heck out of here.”
Zupancich appeared on a national Fox TV show Tuesday describing the fraud problems in Minnesota and how it is impacting small communities. She is a candidate for Sen. Grant Hauschild's seat in the Minnesota State Senate. Zupancich said residents are coming to her with complaints about higher property tax levies and taxes.
Zupancich said she signed the letter for simple reasons.
“My concerns are very simple,” Zupancich said. “Not too long ago, we had a surplus. How does that get misplaced or used otherwise? Now, you have $9 billion (in alleged fraud) gone and the taxpayers need the money. It’s not like stealing a cookie. It gets bigger and bigger and there’s nobody taking accountability for it. Who’s going to be held accountable?
The state is embroiled in a number of investigations over fraud found in programs such as feeding children, autism care, a housing stabilization program, and a program to help people with disabilities.
People involved with the fraud came to Minnesota because they knew there was little risk and no consequences, U.S. Attorney Joe Thompson recently said in a recent press conference.
Thompson said more and more fraud is being uncovered.
“Every day we look under a rock and find another $50 million fraud scheme,” Thompson said in the press conference.
Cuffe said he signed the letter to get a message about rural community challenges to the legislature and the governor.
Cuffe said he has concerns about unfunded state mandates and taxes along with other issues.
“It’s unfunded mandates, number one," Cuffe said. "High taxes is number two. The way the state has the property tax formula set up is flawed, we believe." Emergency Medical Services (EMS) funding, infrastructure needs, and housing development are other major rural issues, Cuffe said.
Cuffe also cites the way the $18 billion surplus was allocated in 2023 by the legislature.
At that time, the legislature was controlled by the Democratic party and held a “trifecta” of government along with Walz.
"We didn't receive the full benefit from it,” Cuffe said.
As an example, $120 million in proposed funding to help rural EMS services was cut to $16 million before beingbumpedupto$24million in last minute negotiations, he said.
Infrastructure needs are huge in rural communities and need funding, he said.
Mandates that required the installation of alternative energy solar panels on the city’s new public safety building and the conversion of businesses and homes in the city to natural gas from steam, are resulting in financial pressures, Cuffe said.
The fraud, unfunded mandates, increased taxes, and lack of support for northeastern Minnesota mining, are all impacting Iron Range residents and communities, Cuffe said.
“You have an increase in taxes on top of fraud and then there really isn’t support for our engine here,” Cuffe said. “Mining is our engine and we don’t get a lot of support from St. Paul." Yunk said taxes are a major issue.
“I have all kinds of concerns,” Yunk said. “The taxes the state is putting on are getting pushed down to the cities and counties.
