Key Minnesota lawmakers on Tuesday signaled a coming makeover to the Mayo Clinic expansion plan that would reduce the state’s burden and increase the amount derived locally.
The bill was detoured Tuesday to give the House Capital Investment Committee a chance to examine it while the Taxes Committee figures out the critical financing piece. The proposal has been stalled in the tax panel for weeks, making supporters nervous as the session clock ticks down.
Committee Chairwoman Ann Lenczewski, DFL-Bloomington, said she wants to pare down the proposal’s more than $500 million state subsidy while making Rochester and Olmsted County shoulder a larger load, perhaps through local hospitality or transportation taxes. House Speaker Paul Thissen said asking more of the clinic’s host community is “a fair discussion to have.”
“You’ve got to put a lot more in the game here before you can look to the state,” Lenczewski said.
Mayo wants the state to commit to public infrastructure upgrades over the next 20 years. As originally conceived, the state’s contribution would come in the form of diverted tax dollars. A percentage of new tax revenues expected to flow from the expansion would be earmarked to repay public bonds that Mayo says are needed to do environmental remediation, allow for utility work and enhance roads, bridges and public meeting space. Not all the public borrowing would be done at once but as the expansion reaches various phases.
Private money would pay for the direct Destination Medical Center build-out as well as lodging, entertainment, retail and dining amenities needed to suit the influx of patients and workers in the region. Mayo leaders have said the project will feed off as much as $5.5 billion in private investment.
Republican Sen. David Senjem of Rochester, who is steering the plan through the Senate, said the proposal already asks a lot of the local community. Rochester has pledged up to $60 million.
“The city is prepared to reasonably do their share and more. And Mayo is prepared to do their share,” he said. “It’s a matter of whether the state wants to complement that.”
Democratic Rep. Kim Norton, the plan’s House sponsor and a Rochester resident, said getting the proposal moving again was important. But she said it’s difficult to tell if shifting more costs to the local government can work until more details are disclosed.
“It will only be good news if it isn’t too hurtful to my local community,” she said.
Mayo spokesman Karl Oestreich said the clinic still believes its initial plan is sound but is open to workable alternatives. He said Mayo wouldn’t comment on what constitutes an appropriate local share.
Officials at the medical industry powerhouse, the state’s biggest private employer, say the expansion is needed to keep pace with peer research hospitals worldwide.
Lenczewski said her committee will resume its debate over the proposal next week. In the meantime, Gov. Mark Dayton has designated chief of staff Tina Smith as his point person on the Mayo proposal. Smith planned to head to Rochester on Thursday for meetings related to the project.
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