The end of the state legislative session brought some welcome news to school districts and other local units of government in northeastern Minnesota.
Key pieces of legislation advanced by area lawmakers, including both State Sen. Grant Hauschild (D-Hermantown) and State Rep. Roger Skraba (R-Ely), made it to the finish line.
Among them were changes in the calculation of school operating levies, which could bring substantially more revenue to the Ely district.
Also significant was the approval of the 2026 Minerals Article, linked to the expected start-up of Mesabi Metallics later this year or in 2027.
Both measures were being followed closely by area officials and are expected to make a major impact in the financial fortunes of the Ely School District, which has faced major budget reductions as a result of declining student enrollment and rising costs.
For the last three years, legislators have pressed for changes related to taxes paid on seasonal-recreational properties.
A replacement aid program was approved, which will seemingly make it easier for districts to approve larger operating levies and spread the tax burden across a larger share of properties.
The change had been sought by school districts such as Ely, where a large portion of the tax base is made up of cabins and other seasonal-recreational parcels.
Meanwhile, the mineral legislation also has major benefits for the Iron Range - all related to by an update to the state’s taconite production tax system in anticipation of the expected startup of Mesabi Metallics in 2026 or 2027. Mesabi Metallics is the state’s newest taconite plant, and the first one constructed in over 50 years.
Minnesota’s taconite production tax is an “in-lieu-of” property tax system. Rather than traditional property taxes, mining operations contribute through a production- based formula, with revenues distributed to support schools, local governments, infrastructure, environmental programs, and regional economic development.
In addition to updating formulas, the bill includes important transitional provisions to provide certainty during the early years of production, when output levels may fluctuate.
While the bill increases school funding for districts on the core Iron Range, it also provides targeted annual allocations of $150,000 to Ely and Grand Rapids school districts, and $100,000 annually to Ely and Chisholm schools under separate provisions.
These amounts to schools and allocations to the cities of Cook, Orr, Two Harbors, and Winton are guaranteed for two years once Mesabi Metallics starts production.
Another provision hikes Taconite Municipal Aid. It would increase by an estimated 13.49 percent, benefiting communities including Ely.
The proposal also creates new guaranteed annual payments for certain communities, including $25,000 for
Winton.
