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APNewsBreak: New Mayo Plan Drops Tax Capture Piece

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ST. PAUL, Minn. (AP) — A complicated tax capture plan sought by the Mayo Clinic to assist in a 20-year growth plan is being dropped in favor of state aid payments directly tied to the amount of private spending on the development, The Associated Press has learned.

The revisions to the Mayo proposal were coming Friday in the Senate Taxes Committee. The AP obtained a copy of the planned changes, which were developed in recent days as Mayo has tried to soothe concerns of leading lawmakers. Mayo was involved in shaping the new concept.

Mayo Clinic came to the Capitol this year pitching up to $5 billion in private investment if public entities committed to helping with infrastructure. Officials said a major expansion of the world-renowned clinic is needed to keep pace with other leading medical centers.

Under Mayo’s original plan, a slice of future tax payments would have been carved off to repay debt, a novel concept that made some lawmakers nervous about setting a precedent that other cities and companies would later pursue.

The new plan calls for private investors to commit at least $150 million and local governments to pledge $60 million before any state contributions are made. That would free up annual state payments, with the amount based on the private investment. The state share for public infrastructure is capped at $525 million.

Each summer, an aid payment of 3.5 percent of the private investment that year would be paid out. The initial $5 million state payment will be compounded each year until the state maximum allotment is reached.

The pot of state money would be used to help pay off debt from bonds sold to build roads, sewers and other public assets needed to accommodate the growth on the Mayo Clinic campus and related entertainment and shopping space envisioned in the Destination Medical Center proposal.

The new plan, which will become the backbone of a Senate bill, is far from home free.

Republicans have complained that the fate of the Mayo plan will be tied to a tax bill that seeks to raise income and other taxes to balance the state budget. The House and Senate tax committee heads say they won’t move the Mayo bill as a standalone proposition.

Senate Minority Leader David Hann, R-Eden Prairie, announced his support for the Mayo expansion Thursday but said he would only give his vote if it moved independently.

“It needs to have an opportunity to be heard and voted on as a standalone bill,” Hann said at a news conference where he was flanked by two GOP senators from Rochester. One of them, Sen. Carla Nelson, accused Democrats of holding the Mayo plan “hostage” to other tax provisions.

That drew a sharp response from Senate Taxes Committee Chairman Rod Skoe, DFL-Clearbrook.

“Everywhere you look it has tax provisions,” Skoe said of the Mayo request. “If I had a project like this in my area, I’d be voting for the bill.”
(© Copyright 2013 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)

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