By Sara Strong
Minnesota Gov. Tim Pawlenty will make Luverne one of his out-state stops on a tour talking about "Tax Free Zone" legislation.
He’ll be in Luverne from 9:30 to 11:30 a.m. Monday at the Blue Mound Banquet and Meeting Center.
Pawlenty and House legislators are proposing the initiative to stimulate development and create jobs in economically distressed areas of greater Minnesota.
Businesses operating within the zones would not pay property taxes or state income taxes.
Modeled after similar programs adopted in Michigan and Pennsylvania, the legislation would allow up to 10 tax-free zones with a maximum size of 5,000 acres (roughly 7.8 square miles) each to be established in greater Minnesota.
Two years after Pennsylvania designated 12 tax-free zones in February of 1999, the move was attributed to creating 5,700 jobs and retaining another 3,100.
The initiative shouldn’t be confused with existing border city legislation, which allows sales tax breaks for qualifying new business construction. Border city legislation is in place in Luverne and other Minnesota communities, like Breckenridge and East Grand Forks.
Tax-free zones can apply to any economically distressed rural area, regardless of proximity to a border. But border communities are particularly vulnerable to losing businesses across the border.