MN2020: Economic Development

2012’s Environmental Gains and Losses

Thu, 17 May 2012 11:00:54 +0000

By Steve Morse, Guest Commentary

Now that the 2012 Legislative session has ended and the commotion about the stadium has somewhat subsided, let’s look back at what our elected leaders did on some issues that garnered less press, but faced significant threats: Minnesota’s water and Great Outdoors.

Sadly, for those keeping score, the environment came up short: The results of this year’s session were out of step with Minnesota’s values. Fortunately, there is still opportunity for citizens to talk with their legislators about what matters to them.

Well, there were a few positive things:

Fees on hunting and fishing licenses were increased for the first time in more than a decade to prevent the Game and Fish Fund from going in the red. Funds from the Legacy Amendment were appropriated, including funds to fight and research Aquatic Invasive Species (AIS). The bonding bill included a provision to help state schools, hospitals, police stations, and other public buildings install solar energy systems.

Unfortunately, the list of detrimental initiatives exceeds the good. Three of the most egregious environmental actions this session include:

Log-rolling a provision that’s bad for wetlands into the Omnibus Environmental bill. Even though this provision increases exemptions to allow more wetlands to be destroyed without any replacements, Governor Dayton signed the bill into law in favor of other provisions he wanted. Log-rolling is a common political maneuver, but that doesn’t make it right. Weakening protections for land and habitat in Minnesota’s School Trust Lands. These 2.5 million acres of public land comprise a significant amount of our state forest system as well as other high-quality protected areas and, in many cases, have been identified as having outstanding conservation value. The law adds new layers of government bureaucracy to manage lands with an eye toward mining and logging instead of natural resource protection. Ousting Ellen Anderson. In a blatantly partisan move, the Senate ousted former State Senator Ellen Anderson from her position as Public Utilities Commission chair, calling her support for renewable energy developments, “extreme.” Our elected leaders need to move beyond the politically charged air of the Capitol and realize that Minnesota voters support clean energy and demand bold action from policy leaders to transition to a clean energy future.

Missed opportunities
It’s also disappointing that the legislature missed some key opportunities to help Minnesota’s outdoors. Despite strong support among Minnesotans to fight AIS like zebra mussels and invasive carp, the legislature failed – for a second year! – to move forward a bill to increase boat license fees specifically to stop the spread of AIS in Minnesota’s waters. Also, by failing to fund the Southwest Light Rail, the legislature missed a prime opportunity to invest in public transit and create 60,000 long-term jobs.

Disconnect between the Capitol and Minnesotans
It’s clear: Minnesota’s legislative leaders’ actions are out of step with Minnesotans’ values. Year after year, polling proves that a clear majority of Minnesotans want protections for our water, land, air and health, and expect their elected officials to do what’s right for our outdoors and Minnesota’s future.

For example, 2012 polling showed that two-thirds of Minnesota voters want tougher environmental laws or better enforcement of those laws. Only 12% think environmental laws are too tough and should be loosened up. The Minnesota Legislature’s attempts to weaken environmental laws show they’re catering to that 12% instead of the majority of Minnesotans!*

Talk with your elected officials
Though session is over, legislators are going to be out and about campaigning the next six months. This is the time to talk with them about what matters to you. Make sure they know where you stand on protecting Minnesota’s water and Great Outdoors—now and for future generations.

*Poll results are from a statewide telephone poll of 500 registered Minnesota voters, conducted Jan. 9-11, 2012, for the Minnesota Environmental Partnership by the bipartisan research team of Fairbank, Maslin, Maullin, Metz & Associates and Public Opinion Strategies. The margin of sampling error for the full statewide samples is 4.4 percentage points, plus or minus; margins of error for subgroups within the sample will be larger.

Steve Morse is the executive director of the Minnesota Environmental Partnership www.mepartnership.org, a coalition of more than 75 environmental nonprofits working together for clean water, clean energy and investments in Minnesota Great Outdoors.

VIDEO: Documenting Urban Ecology

Thu, 17 May 2012 11:00:36 +0000

By Tom Niemisto, {related_entries id="article_author_blogger"}Tom Niemisto, Video Production Specialist

Experiential learning shows that sometimes the most effective educational tools are those outside classrooms. It's important to leave the textbook at home from time to time and hop into real life learning labs.

This past semester, about two dozen Macalester College urban ecology students divided out into teams to create short video documentaries exploring concepts of urban design, environmental stewardship, and the role of public policy.

Here's a look at one of those projects.

VIDEO: Construction Cones Blooming

Mon, 14 May 2012 11:00:46 +0000

By Tom Niemisto, {related_entries id="article_author_blogger"}Tom Niemisto, Video Production Specialist

Roughly $1.5 billion—including the Vikings Stadium—in public infrastructure projects will provide a badly needed boost to a Minnesota construction industry hit hard by the recession and slow economic recovery.

Governor Dayton's leadership, key organized labor alliances, and just enough bipartisan support helped put these men and women back to work rebuilding Minnesota's roads, bridges and buildings, including the Minnesota State Capitol Building.

Sources of International Revenue in Minnesota

Mon, 14 May 2012 11:00:23 +0000

By Héctor García, Guest Commentary

Over a long period of time, serious budget and overall economic challenges have been facing the state of Minnesota. Looking for solutions where we have usually found them does not seem to be working and, when it does, provides a limited return on the investment of our time and effort. I would like to suggest ways which can help address those challenges.

In addition to cutting expenses and increasing taxes, there is an option of increasing revenues from enhanced innovation and productivity, from more exports of products and services as well as from foreign tourism, clientele and investment. Opportunities are more abundant in the global context than within the confines of the state and the nation. We should focus our attention in that direction.

According to the Grow Minnesota! 2011 survey and other reports, investment, productivity, innovation and talent attraction to the state have been lagging. For a time, even exports were down; according to DEED, between 2008 and 2009, exports to Mexico, our fifth market at the time, were down 16 percent; exports to the rest of Latin America were down 22 percent and exports to other parts of the world for a total overall decrease of 15.5 percent.

Minnesota once occupied the 20th spot in exports among the states in the nation. Yet, the Grow Minnesota! 2011 survey found that the companies interviewed identified the international markets as representing only seven percent and six percent respectively among their primary and fastest growing market. The potential for improvement is, then, obviously vast.

The Latino and other current immigrant communities can provide small businesses with the needed contacts and help to navigate not only other countries’ regulations but the greater challenges of cultural obstacles. But, these communities are largely untapped resources. Why? Mainly because of the mindset that defines the interaction between these communities and Minnesota’s majority community. Consider this paradox: Although its civic culture and philanthropy are among the best in the country, Minnesota has one of the worst disparities between minority and majority communities in the nation. I believe this is due to a lack of communication and partnership between the mentioned communities.

A paradigm shift is needed…along the lines of the re-imaging of the Twin Cities pursued by Greater MSP (Regional Economic Development Partnership launched on 10/11). Immigrants can either be dead weight or a buoy to the ship of state… it depends on the mindset through which the minorities are perceived and guided to perceive ourselves.

In 2011, New York City Mayor Michael Bloomberg spoke during the Immigration and American Competitiveness Conference, sponsored by the U.S. Department of Commerce and the Partnership for a New American Economy. He said “… we really need an approach that allows business to grow, that expands our markets overseas, that spurs innovation, that increases the number of entrepreneurs who start businesses here, and that creates jobs for Americans on every rung of the economic ladder… what if I were to tell you that there’s a way we could do all of those things at no cost to taxpayers… an open and honest conversation about immigration reform based on economics… As the data clearly show, immigrants don’t take away jobs; they make jobs—and that is especially true for high-skilled immigrants.”

In addition, immigrants with less education are also needed to address the volatile combination of an aging Minnesota population, increase in medical costs and slow growth of the labor force. Minnesota State Economist Tom Stinson and State Demographer Tom Gillaspy emphasize in “The New Normal” that these problems can be solved by immigrants because of their median youth. The Minnesota Chamber of Commerce presentation “Immigrant Contributions to Minnesota Economy” points to the same solutions.

On the down side, present income and educational barriers will damage not only the immigrant communities, but the socioeconomic conditions of the whole state.

This immigrant formula is one that Minnesota and the nation has benefited from historically and can continue to profit from in the future. I believe that the more significant cultural differences in today’s immigrant groups can lead to even greater innovation than in the past if the proper framework is established.

Lack of awareness of existing potential resources obviously stops us from using them. At this time, no resources, especially those not being properly used and which can yield the largest return, should be wasted. A greater connectivity to globalization’s opportunities is made possible by the presence of immigrants; if we acknowledge it, we can address the challenges faced by Minnesota.

Hector García is a, former VP International & Domestic Emerging Markets for Wells Fargo Bank and Executive Director for Minnesotans for NAFTA (North American Free Trade Agreement)

Strip Malls and Main Streets’ Common Bond

Wed, 09 May 2012 11:00:03 +0000

By Lee Egerstrom, Economic Development Fellow

Minnesota lawmakers spent a lot of time this session on whether to give the grand old State Capitol building major surgical repair or simply get out the needle for a temporary botox job.

The Capitol is the greatest public building in need of major repairs, bipartisan leaders agree. But it is far from the only one in Minnesota that could use a facelift or hip replacement. Some bonding bill projects typify a state infrastructure in need of upgrades.

In the private sector, thousands of unknown storefronts face the same fate, from outdated suburban strip malls to forgotten rural Main Street buildings.

All this suggests the construction industries and thousands of workers might find jobs in the next few years regardless what Minnesota lawmakers decide to do about a publicly supported Vikings stadium.

A helpful start of building and rebuilding a new Minnesota just might come from better information, such as inventorying what properties are available for use and redevelopment now, reaching beyond state and local programs encouraging new construction on subsidized land.

For instance, the Preservation Alliance of Minnesota can identify every nationally recognized historic building in the state, said Will O’Keefe. However, it can’t tell a prospective entrepreneur looking for a business site in Minnesota what the vacancy rate or status of the building might be.

“It would be helpful if there was a site we could point to that would be easy for local economic development people to constantly update,” he said.

The Alliance, or PAM, wants to spare great old buildings from the wrecking ball. Not coincidentally, it is hosting its May 18 annual fundraising and social event, the (Anti) Wrecking Ball, in the St. Anthony Falls Historic District in Minneapolis.

The task of helping find new uses for great old buildings would be easier for local developers, civic leaders and groups like PAM if prospective entrepreneurs and the commercial realtors had fingertip information on these buildings, O’Keefe said.

Jim Standish, Grand County coordinator in west-central Minnesota, agrees with that assessment. He’s part of an ad hoc group, loosely calling itself Grow Grant County, that is meeting tonight in its countywide effort for promoting economic development and redevelopment.

Nearly every rural community in the state still shows signs of business consolidation and out-migration of people that followed the rural business downturn that followed a national recession. The period in the countryside is often called the “farm financial crisis” of 1982-1987. Despite its agrarian name, it spilled over and shut down local merchants and service providers in small towns and cities, leaving behind empty main street buildings and edge-of-town industry sites.

In retrospect, the consolidation of businesses that occurred in the 1980s would have come anyway – perhaps less abruptly – by changes in technology and people’s driving behavior.

“We measure distances in miles when people in the Twin Cities measure distances in minutes,” Standish said. Either way, Grant County residents traveling to businesses, eateries, public events and entertainment in the different towns don’t spend any more time in their automobiles than suburbanites attending Minnesota Twin games.

For Standish, the current effort is the third time in his 40-year public service career where people have organized to look at countywide development. “It isn’t easy,” he said. “Old rivalries always come up over who gets what.”

Empty storefronts aren't just a rural problem. With demographic shifts and two recessions in the past decade, strip malls from the Twin Cities metro to the state's regional centers are dotted with vacancies. PAM’s O’Keefe said much of this real estate isn’t headed for registries of historic places, but these locations will certainly need redevelopment and new uses as retail business shifts to the internet or other locations.

A period of adjustment that waits can be painful. It can also be constructive and create jobs, helping strengthen the Minnesota economy.

Minnesota's general contractors aren’t too concerned about “who gets what.” They do want the state to get going though.

Whether it be public buildings or commercial property, the construction industry sees redevelopment as an immediate opportunity to put trades people back to work, upgrading utilities and enhancing older buildings' energy efficiency, said David Semerad, chief executive officer for the Associated General Contractors of Minnesota. At the same time, he said, most contractors believe a full recovery for the industry is another year or more down the road.

A survey conducted at the start of the year found a third of the contractors expected no change in employment this year while another third anticipated adding jobs. Nearly 70 percent said bank credit hasn’t been a problem directly for their firms although it has held up projects for clients and caused some cancellations.

As a reminder that public policies do matter, they survey found more than 60 percent of Minnesota contractors have worked on at least one project that was aided by stimulus programs. More than 35 percent of those projects were in the $5.1 million to $19.9 million range.

Corporate Personhood’s Limits

Mon, 07 May 2012 11:00:28 +0000

By Ben Schweigert, Fellow

In Citizens United v. Federal Elections Commission, the U.S. Supreme Court held that corporations have the right to free speech under the First Amendment, and therefore Congress cannot stop them from spending their own funds to support the election or defeat of candidates for public office.

No one doubts, of course, that the people who own and manage a corporation have First Amendment rights, including the rights of free speech and free association. They have the right to form organizations, pool their resources, and engage in collective political action. Neither Congress nor state governments can take that away. But corporations receive their existence, powers, and privileges under state law, and this could give states ways to limit the influence of corporate money in politics, even when the federal government cannot.

A corporation is not just any association of individuals. It is authorized by the state and receives from the state significant powers and privileges. The most important privilege is limited liability. This means that, in general, anyone with a claim against the corporation can only take the assets of the corporation, not of the corporation's owners, employees, executives, directors, or anyone else. This is a big deal.

Needless to say, if I start a softball league with some friends, and then we accidentally break a bunch of windows, we won't be able to pass off the blame on "the league" and walk away scot-free. If we were a corporation, we probably could—even if the corporation didn't have enough money to pay for all the windows.

So why do we give people this privilege, to take action without personal responsibility and instead place the responsibility on a legal construct? We do it because we think there's a benefit to society. Limited liability corporations were invented as a way to encourage people to take on potentially risky commercial ventures that would make society more prosperous but for which the individuals involved might not want to be on the hook.

For much of history, this bargain was explicit. When a corporation was formed, its articles of incorporation stated its purpose. For example, the purpose of the Central Transportation Company in Pennsylvania was "the transportation of passengers in railroad cars constructed and to be owned by the said company." The state gave a corporation powers to exercise in furtherance of its stated purpose -- meaning that the people involved with the corporation could take certain actions in the name of the corporation, without personal responsibility.

Corporations were not allowed to act outside those powers. Thus, in Pearce v. Madison & Indianapolis Railroad, the Supreme Court explained that two corporations set up to run railroads could not start a steamboat line, because doing so "diverted their capital from the objects contemplated by their charters, and exposed it to perils for which they afforded no sanction." Such actions, called ultra vires, meaning a corporation lacks the power, were invalid.

In recent years, we've allowed people to define corporate purposes so broadly that virtually nothing is ultra vires. But this is not an irreversible choice. When the state gives a group of people the privileges of incorporation, it makes a deal with them: they get certain benefits because society expects to also receive certain benefits. If society is no longer happy with the deal it's getting, it can renegotiate this deal by changing the law. Limiting the purposes and powers of corporations incorporated in the state to restrict their ability to spend corporate treasury funds to influence elections would be just such a change.

Of course, political speech is not like running a steamship line. The individuals who create corporations indisputably have the right under the First Amendment to engage in political speech and to form associations to do so. But they have no constitutional right to do so through a particular legal form of association: the limited liability corporation, which carries a whole range of special benefits not available to the general public.

In fact, states need not create limited liability corporations at all. And people routinely accept limitations on the activities of their associations in exchange for special privileges: for example, charitable nonprofits give up the right to influence elections in exchange for tax-exempt status. The people forming these associations still have all of their First Amendment rights, they just can't exercise them through those particular associations.

A corporation with limited liability is no different. It is one type of association through which the people involved can act, a type of association that involves a bargain with society. Voters have repeatedly said that they think the influence of corporate money in politics is a bad deal, and, despite Citizens United, they can change it.

VIDEO: Great Push-Back Moment

Mon, 07 May 2012 11:00:10 +0000

By Tom Niemisto, {related_entries id="article_author_blogger"}Tom Niemisto, Video Production Specialist

One key to strengthening the Minnesota economy is maintaining a robust, well-educated workforce in a safe marketplace. Yet conservative attacks this session have moved to dismantle workers' rights, disenfranchise voters, and divert to distractions.

Progressive columnist and author John Nichols looks to Wisconsin's recent labor battles as a model for other states to fight for a fair and equitable economy where everyone can succeed.

A Tax Credit Worth Extending

Thu, 03 May 2012 11:00:12 +0000

By Will Nissen, Fellow

Two tax breaks are set to expire at the end of this year. One—the Bush tax cuts—will be a divisive November campaign issue, grabbing months-long national headlines. The other will garner much less attention, but will have a significant impact on Minnesota jobs and energy policy.

Letting the federal wind production tax credit (PTC) expire at the end of this year is a mistake. Last month I wrote a short piece highlighting the negative effects it will have on jobs, rural economic development, and university research.

The federal wind PTC currently stands at 2.2 ¢/kWh, and applies to the first 10 years of operation for qualified wind energy resources that go online before December 31, 2012. This may not seem like much, but when you match it to the cost of building and operating a commercial-size wind farm it gives wind development a sizable economic boost that makes it more competitive with traditional energy sources like coal, natural gas and nuclear.

The U.S. Energy Information Administration indicates that the average total levelized cost (or break even price) for wind farms entering service in 2016 is roughly 97 $/MWh. This includes upfront capital costs, fixed operation and maintenance costs and estimated transmission investments. A 2.2 ¢/kWh tax credit for wind-produced electricity equates to a 22 $/MWh drop in that total cost, bringing it down to 75 $/MWh. This helps make new wind farms more competitive with new natural gas plants (break even price of 66.1 $/MWh), and cheaper to build than new coal (94.8 $/MWh) and nuclear (113.9 $/MWh) power plants.

Wind critics argue that even with the tax credit boost, one of the main factors holding wind back as a primary electricity generation source is its inconsistency: the wind doesn’t blow the same amount all the time, and peak generation hours may not match up with peak demand hours. So even if it is cheaper, wind energy currently can’t support our energy grid as a reliable source of electricity without help from natural gas, coal or nuclear power plants.

However, innovations in energy storage technology are helping wind power overcome these obstacles. A new patent developed by the University of Minnesota utilizes compressed air storage that operates at constant pressures. When installed on turbines these systems would store energy when the wind is blowing but energy may not be needed (like at night), and release a constant level of energy to the grid over a certain time period. This would smooth out the fluctuations of energy generation inherent in wind power design, and make wind energy a more reliable energy source for our grid’s base load.

Along the same lines, storing wind energy with hydropower systems can help smooth out the inconsistencies in wind-produced energy. Pumped hydro storage is used in Europe when wind farms in Denmark store unneeded electricity in hydro systems in Norway (to the benefit of both countries), and Department of Energy Secretary Steven Chu has promoted the development of combined wind-hydro systems here in the U.S.

Combined with energy storage innovations, new turbine technology can increase the efficiency of wind power. Most turbines and wind farms now operate somewhere between 30 and 40 percent of nameplate capacity. In other words, farms actually produce less than half of the energy than they would if the turbines were producing maximum energy levels all the time (for perspective, coal plants operate at around 85 percent of nameplate capacity and conventional natural gas plants around 87 percent). But as turbine and generator designs continue to improve (as they have in recent years) this capacity factor of wind turbines will go up.

Increased efficiency will give wind farms more bang for the buck needed to build them (more energy per wind turbine), a smoother and more reliable energy supply to the grid will make wind energy cheaper for customers, and all this will make wind energy more economically competitive without the need for a PTC. But these and other innovations and emerging technologies have not yet fully developed to support wind without help from the tax credit. Someday the wind industry will be able to walk away from the federal PTC, but it’s not there yet.

Ethanol is a great example of this process. Since 2004 the ethanol industry enjoyed a significant tax break from the Volumetric Ethanol Excise Tax Credit that helped keep the growing industry afloat while improving technology and infrastructure made the industry more and more competitive. But at the end of last year Congress allowed the credit to expire, with the support of an industry ready to stand on its own.

Like ethanol, the wind industry will one day be able to stand on its own. But it needs the PTC now to remain an economically viable and valuable option for developers, rural landowners, utilities and consumers while emerging technologies and innovations develop.

VIDEO: International Attention to Workers’ Rights

Thu, 03 May 2012 10:59:32 +0000

By Tom Niemisto, {related_entries id="article_author_blogger"}Tom Niemisto, Video Production Specialist

Workers around the world gathered on May 1st to recognize International Workers' Day. The event was first launched in the late nineteenth century.

Workers and labor advocates, along with some Occupy Wall Street activists, marched in Minneapolis to bring awareness to economic inequality and social injustice from recent attacks on Minnesota workers and immigration reform, issues that fully impact Minnesota's future and economic development potential.

Renters Need an 86-Hour Work Week

Wed, 02 May 2012 11:00:30 +0000

By Lee Egerstrom, Economic Development Fellow

Working a “second shift” is taking on new meaning for lower income Minnesota families trying to house kit and kin in a modest, two-bedroom apartment. For many, that second job is a must just to afford the basic necessities.

There are several reasons why. First, we experienced the mortgage markets' titanic collapse. This also caused the economic downturn that led to private sector layoffs beginning in 2008. Federal efforts in 2009 to stimulate an economic rebound were undermined when state, local and even the federal government balked at fair fiscal policy to balance budgets and cut public jobs and private sector investment. Historically high unemployment lowered household incomes, meaning fewer families could afford mortgages and began looking to the rental market for housing.

Now add in the Great Recession slowing multifamily housing construction and you have a cascading impact to drive up rental demand, thus increasing rental prices.

If high rental prices weren't damaging enough to a low-income family's budget, Minnesota conservatives' 2011 budget balancing gimmick drove up rental property taxes an estimated 7 percent.

Minnesota Housing Partnership (MHP) and allied housing, jobs and poverty groups now calculate that a Minnesota worker would need to earn $15.50 per hour to work 40 hours a week and pay Fair Market Value rent for a modest two-bedroom apartment. What they find, however, is that the typical Minnesota renter earns $12.17 per hour. Many renters live at the government's $7.25 per hour minimum wage.

In April, Minnesota 2020 published Gaining Ground in the ‘Race to the Bottom', which noted Minnesota household income during the 2000s dropped 24 percent while nationally it fell 7 percent. From 2007 to 2010, Minnesota household income dropped 14 percent compared with 6 percent nationally.

Examinations of household income data show softness in the Minnesota economy and expose the need for course corrections in public policy to begin raising the standard of living for huge numbers of Minnesotans.

Minnesota is the costliest state in the Midwest for renters. The National Low Income Housing Coalition's (NLIHC) 2012 report, Out of Reach, uses a matrix of measures to determine what it would cost a family of four to rent a modest two-bedroom apartment.

To achieve such housing for the family, a minimum wage earner in Minnesota would need to work 86 hours per week, or 2.1 40-hour jobs. This same person would need to work 81 hours a week in Illinois, 79 hours in Wisconsin, 77 hours in Michigan, 74 hours each in Indiana and Missouri, and 73 hours a week in Nebraska to find similar housing.

Falling in behind them are Kansas and Ohio where 70 hours a week are needed to secure modest housing, 68 hours a week needed in Iowa and North Dakota, and 64 hours a week in South Dakota.

The late Sen. Paul Wellstone, D-Minn., irritated two former presidents—one from each party—when their campaigns cited jobs created during their first four years in office without elaborating on the quality of the jobs.

“Yes,” Wellstone said of the new hiring claims. “I know a single, working mother who has two of those jobs.”

That wasn’t just a clever way to make a point. New data, updated in March, show that 139,076 of Minnesota’s 559,266 rental households are considered by generally accepted national standards to be “severely burdened” by housing rents.

These are households that have incomes at or below 30 percent of their area median income.

The Minnesota Housing Partnership and the Minnesota Coalition for the Homeless organizations jointly released state data from the study in March. Leigh Rosenberg, research and outreach manager for the Partnership, said the data show housing affordability to be a problem scattered around the state and not just in the densely populated Twin Cities metro area.

In an April blog, Rosenberg showed NLIHC profile findings of renters (pdf) for the state and each of Minnesota’s eight Congressional districts. No area of the state is immune to these housing problems. By extension, it also means state and local officials, working with the construction and housing industries, will need to address localized affordable housing problems.

Longer term, Minnesota and the nation must look again at minimum wage legislation to make realistic adjustments to inflation.

Further, conscientious Minnesotans must stand firm opposing "stomp ‘em while they’re down,” anti-worker legislation circulating at the capitol. As the housing squeeze shows, this is a poor time to lower household incomes.

VIDEO: Project Independence Two Years On

Mon, 30 Apr 2012 11:00:52 +0000

By Tom Niemisto, {related_entries id="article_author_blogger"}Tom Niemisto, Video Production Specialist

Project Independence is a 44-panel solar panel array at the Chisago Lakes Middle School in Lindstrom, MN. The project received large support from the community as well as major grants from the State of Minnesota and the Metro Clean Energy Resource Team (CERT), but science teacher Pat Collins would tell you that his students really took ownership in making it happen.

Collins initiated the project when he was looking for a way to both save on energy costs to the district and to have a tool to demonstrate sustainability in his life-sciences classes.

Check out a live update of power generated from the installation here!

Urban Farming: Or, Old MacRybak had a Farm

Thu, 26 Apr 2012 11:00:35 +0000

By Sasha Hulsey, Policy Associate

Minneapolis likes to be ahead of the curve, especially when it comes to sustainability programs. Over the past couple of years, Minneapolis has created one of the country’s largest shared bike ride programs (Nice Ride), built new light rail lines and bike trails, integrated solar power and other renewable energy sources into city buildings, and worked to increase access to healthy locally grown foods for everyone.

On Monday April 2nd, Minneapolis Mayor RT Rybak signed an amendment to the Minneapolis City Council’s Urban Agriculture Ordinance. Of the new provisions, one of the most interesting is the one that allows market gardeners to grow food commercially, the first time this has been legal in Minneapolis city limits since 1963. Other changes include an increase in commercial farming on a larger scale in industrial parts of the city (as well as smaller scale in residential areas), the introduction of aquaculture and aquaponics (fish farming), allowing residents to build hoop houses on their property to prolong the growing season, and fewer restrictions on composting and anaerobic digester facilities.

All of these ideas originate with a city-wide initiative called Homegrown Minneapolis, whose mission is to expand “our community’s ability to grow, process, distribute, eat, and compost more healthy sustainable, locally grown foods.”

Of course, many compromises were made during the city council’s discussion process, most of them designed to minimize disturbances to city residents. Two important compromises directly affect economic development for urban farms and farmers. First, although urban gardeners are allowed to sell their produce on-site with an appropriate license, they are only allowed to sell 15 days per year. The second compromise relates to hoop houses, which are temporary green houses typically made out of metal pipes and plastic sheeting. They are used in northern climates to prolong the growing season until as late as December, and greatly increase the amount of produce a farmer can grow.

Under the new zoning rules, hoop houses can be up to 6.5 feet high on residential properties, and up to 12 feet high on industrial area urban farms. Although many people may not want to see a plastic sheeted greenhouse towering over their fence, for prospective urban farmers, having a taller hoop house can mean potentially tripling their productivity and income

Increased urban farming opportunities may have notable benefits to community health and economic development. In 2010, The Minneapolis City Council commissioned research by a land planning firm called Community Attributes International to examine “forecasted residential and job growth, recent development patterns, land supply (vacant and underutilized land) and land demand.” According to their findings, Minneapolis has “more than enough developable land (both public and private) to accommodate forecasted growth for at least 20 years.

Both development and urban agriculture uses can be accommodated without competition.” They identified North and Northeast Minneapolis as areas that could benefit the most from urban farming. Parts of these areas qualify as “food deserts”, defined as “an area in the United States with limited access to affordable and nutritious food, particularly such an area composed of predominantly low- income neighborhood and communities.”

Greater access to urban farms in these areas may help save food dollars and may reduce obesity, since low-income residents who lack access to fresh produce often buy highly-processed convenience foods. For example, Milwaukee, WI’s Growing Power, an urban farming organization started by former NBA player Will Allen, distributes food to the low-income community in which it is located, giving discounted rates on fresh produce to impoverished families. For $16.00, a CSA food box from Growing Power can feed a family of four for a week. Urban garden donation projects can also benefit emergency food providers (local food banks and soup kitchens) which rarely have access to fresh produce.

Urban farming is an intriguing concept which has the potential to decrease poverty and obesity levels, teach people about healthy foods, and transform vacant lots into vibrant community green spaces.

VIDEO: Solar on Residential Rooftops

Thu, 26 Apr 2012 11:00:16 +0000

By Tom Niemisto, {related_entries id="article_author_blogger"}Tom Niemisto, Video Production Specialist

New technology is making it possible and practical for photovoltaic installations to work on residential rooftops. Innovative reflective arrays, developed in Minnesota by TenKSolar and 3M, make PV panels space efficient and ramp up the energy production.

Applied Energy Innovations is a vertically integrated renewable energy contractor based in Minneapolis. They expect to see more installations, due in part to smart energy policy and rebates offered from Xcel Energy for renewable energy production using Minnesota-made products. The installation on this house will earn a $5-per-watt rebate.

Cultivating Energy Efficient Farms

Tue, 24 Apr 2012 11:00:41 +0000

By Shaun Daniel, Guest Commentary

A little over a month ago, I attended the Central Minnesota Farm Show in the River's Edge Convention Center in St. Cloud. The 2012 show was perhaps the biggest yet. Both attendees and vendors commented on the broad variety of things to see in wandering the pathways of tables and booths: Farm insurance agents, geneticists, seed and equipment vendors, towering John Deere tractors. But what was lacking amid the newest farm technology was an abundance of information on improving farm energy efficiency.

While we had a table set up for The Minnesota Project, and a couple electric utilities were also present to promote energy efficiency with information on their programs, there wasn’t as much other information as there could have been. Perhaps this illustrates the untapped opportunities still available to Minnesota farmers to improve the energy efficiency of their farms, save themselves some money in the process, and help conserve our resources.

A few years ago, the Minnesota State Legislature passed a bill into law titled The Next Generation Energy Act of 2007. The bill’s Renewable Energy Standard (RES) was a much talked about provision, which set statewide goals of producing 25 percent of our electricity through renewable energy by 2025. A less talked about provision was the Energy Efficiency Resource Standard (EERS), which challenges Minnesota’s electric and natural gas utilities to reduce their electricity sales by one-and-a half percent each year by providing energy efficiency/conservation programs to their customers.

The great thing about Minnesota’s EERS is that all utilities in Minnesota have programs available, generally as a rebate. Thus, while only a select few will ever be able to construct a renewable energy project, all Minnesotans have an opportunity to take advantage of their utility’s energy efficiency programs. Given the amount of power that goes into many agricultural businesses, farmers stand to benefit from the assistance that utility rebate programs can provide in making their operations more efficient and sustainable. And with ROIs of 30 percent, and sometimes much higher, it makes business sense to pursue energy efficient upgrades.

There are a number of other programs that can help with financing such upgrades. For example, the Minnesota Department of Agriculture created the Sustainable Agriculture Loan Program to promote innovative management practices that enhance farms’ profitability and benefit the rural environment. Loans up to $40,000 per family (or up to $160,000 for a joint project) are available at a three percent interest rate for up to seven years to support capital purchases that enhance a farm’s environmental and economic viability.

At the Federal level, the USDA’s Rural Energy for American Program (REAP) offers strong support to agricultural businesses with both loans and grants. The loan program guarantees up to 85 percent of the loan amount on loans up to $25 million, but can go as low as the minimum of $5,000. Meanwhile, the grants program covers up to 25 percent of the total eligible project costs, which are limited to $250,000 for energy efficiency improvements. Requests as low as $1,500 are considered. A farm energy audit is required to outline present energy usage. An upgrade plan with costs and projected savings is also included. An example of the impact of the grants program: In 2011 Minnesota producers obtained $292,000 for both energy efficiency and renewable energy projects.

The National Resource Conservation Service (NRCS) also has several useful programs in its Environmental Quality Incentives Program (EQIP). Through the EQIP program, the NRCS offers the Agricultural Energy Management Plan (Ag EMP), which is meant to help agricultural producers transition to more energy efficient operations and help fund on-farm energy audits. The Ag EMP gives an overview of a farm’s energy use, while also listing recommended efficiency improvements. After establishing an Ag EMP, farmers will eventually be eligible to have the recommended improvements cost shared through an additional EQIP conservation activity.

Beyond these programs, there is a wealth of farm energy efficiency information available online. The Minnesota Project has been working to collect some of the best in its Farm Energy Efficiency Resource Center and our new Dairy Energy Efficiency page. Farmers may be interested in the services offered by our Farm Energy Auditor Training Program graduates, and a recording of a recent webinar exploring the utilities' rebate programs. Other great organizations with resources focused on energy efficiency and renewable energy are University of Minnesota Extension; DSIRE, the database of state incentives for renewables and efficiency; the Institute for Agriculture and Trade Policy, which does a great job of analyzing energy policy as it relates to agriculture; the Clean Energy Resource Teams (CERTS), which work with communities across the state on local efficiency and renewable energy projects; and ATTRA, which recently had its federal funding restored to offer technical assistance services for farmers at no charge.

The Central Minnesota Farm Show provides a great opportunity to talk with farmers about some of the latest thinking in agriculture. For those who don’t have a lot of experience with farm energy efficiency and renewable energy, it can help connect them to useful resources. I hope that next year energy efficiency will have an even greater presence at the show. By improving energy efficiency, it is our hope that we can help farmers conserve resources and make their farms more sustainable, cost effective and profitable—something that, in the end, benefits us all.

Shaun Daniel is a Clean Energy Program Associate at The Minnesota Project.

VIDEO: Economic Empowerment from Energy Efficiency

Mon, 23 Apr 2012 11:00:05 +0000

By Tom Niemisto, {related_entries id="article_author_blogger"}Tom Niemisto, Video Production Specialist

Minnesota 2020's latest research report Sensible Incentives examines the economic benefits we would all see in reducing energy use in the rental housing market. Residents would see see benefits on the utility bill, and property managers could see rebates from utility companies, if policy proposals move forward.

The City of Duluth is already ahead of the curve. Ecolibrium3 is a nonprofit that launched the Duluth Energy Efficiency Program, which audits residences for energy use, works with the local utility, and empowers renters and property owners to make the switch to energy efficient appliances.

VIDEO: Sensible Incentives

Thu, 19 Apr 2012 11:00:21 +0000

By Tom Niemisto, {related_entries id="article_author_blogger"}Tom Niemisto, Video Production Specialist

Minnesota is already a national leader in prioritizing renewable and sustainable energy policy. But progress is falling short in the rental-housing sector around the state. Property owners of rental units are responsible for buying and maintaining appliances, yet as they don't pay the utility bills and tend not to choose energy efficient units with Energy-StarTM ratings.

Minnesota 2020 Fellow Will Nissen is the author of a new report Sensible Incentives: Enabling Energy Efficiency in Rental Housing, which examines the split-incentives barrier and explores policy solutions to move Minnesota forward.

Sensible Incentives: Enabling Energy Efficiency in Rental Housing

Thu, 19 Apr 2012 10:59:14 +0000

By Will Nissen, Fellow

Download full report (pdf)
View online at Scribd

In an age of climbing expenses, we all look for ways to save money. Energy efficiency is routinely highlighted as the most cost-effective way to save energy and expenses. However, if you are one of over 1 million Minnesotans who rent their living space, there are significant barriers to saving on energy bills: The appliances in the unit you rent.

Chances are your appliances are not energy efficient because there is no incentive for the owner of the property to upgrade an expensive appliance when the direct benefit from the savings won’t help the company bottom line. This is referred to as a split-incentive.

Most appliances in rental properties are electric and the cost of running them falls to the renter as an often hidden cost. For example, a refrigerator runs every moment of the lease and they are the largest single end-user of electricity in rental housing at 20 percent. Cost can add up quickly.

Sensible Incentives: Enabling Energy Efficiency in Rental Housing examines the potential energy and cost savings from the replacement of old, inefficient refrigerators with new, energy efficient refrigerators. Preliminary estimates suggest that replacing the nearly 88,000 refrigerators over 10 years of age in Minnesota rental properties would save renters well over a staggering $3.7 million a year.

This is a modest proposal. It isn’t political, or even urgent, but it is something we can start working on together to move Minnesota forward. Statistics reveal that many renters in the state are interested in energy saving appliances. Utility companies have money reserved to aid in creating programs for customers and property owners are interested in meeting the desires of existing and potential clients.

Sensible Incentives makes three recommendations for policy makers to improve the energy efficiency performance of rental housing in Minnesota:

Customized Conservation Improvement Programs targeting large rental property owners, including rebates for replacement of old, inefficient refrigerators. Mandate public energy use disclosure for apartment buildings. A pilot PAYS®-based On-Bill Financing Program for appliance upgrades serving rental housing.

For appendix and methodology, please see the online supplement.

The Market of Food and Farmers You Know

Wed, 18 Apr 2012 11:00:09 +0000

By Doug Peterson, Guest Commentary

According to the Minnesota Farmers’ Market Association, there are about 200 farmers’ markets in Minnesota, contributing delicious, Minnesota-grown and farm-fresh food to all of us. They build our local economy by getting fresh food from a farm to your table, and as a local food customer your money stays local. Buying local reduces your carbon footprint by reducing labor, transportation, energy and packaging costs.

A Minnesota Grown directory of farm-fresh food compiles a list of over 1,100 members who grow, raise or process products. This is a great resource for consumers, and Minnesota Farmers Union (MFU) is lead sponsor of the Minnesota Grown directory.

Farm-fresh, local food is no longer a trend. More and more people realize the importance of buying local, and of finding a farmer you know in or near your community. Awareness has moved to hospitals, university systems, some of our local schools, to the legislature and the 2008 farm bill.

The local foods landscape is changing. Now, farm and food policy discussions have more emphasis on local foods and the local economy. It is important to be at the table in food policy discussions. If you are not at the table, you will be on the menu.

The Obama Administration has started the Know Your Farmer, Know Your Food program within the United States Department of Agriculture (USDA). This program strengthens the connection between farmers and consumers through initiatives that: Stimulate food and agriculturally-based, community economic development; promote locally farmed foods; cultivate healthy eating habits by expanding access to affordable, fresh, local food; and bridge the connection between food, agriculture, community and the environment.

MFU agrees with the Administration and the USDA’s emphasis on the need for more education regarding local food and better networking services in support of local foods.

Nine years ago, MFU produced our first annual Minnesota Cooks™ program at the State Fair. The program brings together local farmers, and Minnesota's urban and rural premier chefs to demonstrate how to use farm fresh, Minnesota-grown ingredients to create affordable and tasty foods. The program also educates consumers where to find or cook local, farm-fresh food.

The success and popularity of Minnesota Cooks™ is demonstrated by the partnership MFU developed in 2011 with tpt Almanac, which showcases our Minnesota Cooks™ chefs, and farmers on local public television station, tpt.

Looking for a more active role? You can get involved! You can help farmers’ markets and local food. You can look at the label on your shirt right now to see where it was made – why can’t we do the same with all food? Farmers Union policy calls for consumers to have the opportunity to make decisions about whether they want to purchase and serve their family food that is produced locally, regionally, from the United States, or imported. COOL, or country of origin labeling is about getting food labeled so you know where it came from. This is important to both our national and state economies—get involved by making sure that COOL is on all foods.

Some consumers may not believe a farm bill is important to them, but it is where farm and food policy is discussed; and good food and nutrition policy is fostered. The farm bill includes programs for funding beginning farmers, which allow young people the opportunity to farm, raise kids, and grow healthy food for themselves and their community. Farm bills outline procedures for weather losses: Storms can wipe out a farmer's entire crop and crop insurance is needed for farmers to recoup losses after Mother Nature strikes. Crop insurance ensures our nation and our consumers abundant food supplies at a fair price. You may not farm, but farm policy is important to you if you enjoy eating.

Farmers provide our country with food. The Farm Bill provides a safety net based on one-half of one percent of the national budget. Of that, 72 percent goes to nutrition and only 12 percent goes to farm programs that ensure the family farm and the farm-fresh food we enjoy are protected—a strong reason to want to be at the table when farm and food policy is discussed!

There is nothing better than getting food from farmers you know and where you live. Shop your neighborhood farmers’ market, and support your local Minnesota farmer and American farmers.

Doug Peterson is president of the Minnestota Farmers Union

VIDEO: Farming in the City

Thu, 12 Apr 2012 10:59:28 +0000

By Tom Niemisto, {related_entries id="article_author_blogger"}Tom Niemisto, Video Production Specialist

You might easily confuse the sound of a farm-tiller with that of a lawn-mower this spring season. That's because more urban farmers in Minneapolis can use their own land to sell self-grown produce.

Minneapolis just passed a city ordinance allowing market gardeners to grow food commercially in yards and designated plots and sell produce fifteen days per year. Other rules expand the use of hoop-houses and fish farms in city limits.

Audrey Matsen launched Egg|Plant Urban Farm Supply in St. Paul two years ago, recognizing a new generation of DIY gardeners and city-dwelling food producers. She has seen a resurgence of urban farming enthusiasm as people of all generations prefer local sources of food. It's also a source of economic development in neighborhoods that could use vacant lots to generate income.

Farmers at Stone's Throw Urban Farm see the new policy as vital to urban development and addressing hunger in the city. Macalester senior and co-owner Alex Bierman hopes to see if urban farming can be a viable source for steady economic development in the city.

Gaining Ground in the “Race to the Bottom”

Wed, 11 Apr 2012 11:00:11 +0000

By Lee Egerstrom, Economic Development Fellow

Minnesota may not be winning the so-called “race to the bottom” against other states, but we’re closing in on the heels of the frontrunners.

True, federal and state jobs data show Minnesota has restored most of the lost jobs from the 2008-2009 Great Recession. Over the long haul, that is just a sprint, or a relay leg, in what critics of federal and state economic policies call the “race to the bottom.”

Statistics show we haven’t recovered the great job losses of the earlier 2001-2002 recession or slowed the steady decline in economic well being over the entire past decade.

“We were a leading state, well above average in the 1990s,” said Kevin Ristau of the Jobs Now Coalition nonpartisan research group. “That all changed in the last decade.”

Jobs Now has taken a longer view of data from the U.S. Bureau of Labor Statistics and made these four troubling findings:

During the 1990s, Minnesota median household income rose 49 percent. Nationwide, it increased by 15 percent. During the 2000s, Minnesota median household income dropped 24 percent. Nationwide, it declined by only 7 percent. From 2007 to 2010, Minnesota median household income dropped 14 percent. Nationwide, it declined by 6 percent. From 2000 to 2007, Minnesota median household income dropped 11 percent. Nationwide, it declined by 1 percent.

Longer looks at state and national economic performance data is in contrast to indices and reports released every week. All reflect changes in the economy and are useful. However, many of the data sets are simply short-term, monthly figures; they don’t reveal sustainable trends more than the daily rise or fall of the Dow Jones Industrial Average index.

This article is the first in an occasional series. It will look at different data that explains the softness of the current economic recovery. Future articles will explore how the weakened middle class job markets are holding back recovery in the depressed housing market, why we have increased poverty amidst an economic recovery, and why the gap between the “haves” and the “have-nots” in Minnesota, will widen without course corrections to public policy.

“Part of the tragedy of this ‘race to the bottom’ is that as we (Minnesota) race towards the bottom, the bottom itself keeps dropping,” said Peter Rachleff, labor historian at Macalester College.

“If they (states), like Texas, are gaining jobs, those jobs do not pay family-sustaining wages and benefits,” he added.

That is observed nationally on comparative looks at the shrinking middle class and related problems for housing and healthcare markets. The same trends, however, become especially evident in Minnesota where the Minnesota Department of Employment and Economic Development (DEED) began a thorough Job Vacancy Survey in 2001 that provides more information than can be found for most states More recent JVS can be found here.

Archived results from DEED show Minnesota job openings, or job opportunities for people in need of employment and who are seeking better employment, recovered last year to levels around the time of the Wall Street banking fiasco in 2008 and the accompanying Great Recession.

Ristau, at Jobs Now Coalition,points out that this isn’t much of a recovery. The JVS data for the second quarter and fourth quarters of 2011 still show less than half of the Minnesota job openings available in the second quarter of 2001, before the start of the earlier recession. (See graphic.)

Source: Job Vacancy Survey archives. Minnesota Department of Employment and Economic Development.

The JVS report shows job opportunities in a number of healthcare fields, education and training and various skilled business positions that are likely to offer better pay and family-sustaining benefits. Other categories that offer job opportunities, however, are in food preparation and serving positions, and in categories that include Minnesota’s large retail sector that isn’t known for offering benefits.

Unless we’re entering an economic stage where Minnesotans can sell each other imported goods, or work in support of people engaged in such transactions, we need to strengthen our “production” sector.

This sector shows even more weakness in Minnesota’s economy, observed Ristau. Minnesota had only 3,048 such job openings in the fourth quarter last year, or only about half of the 6,002 openings found in the first JVS survey a decade ago.

Source: Job Vacancy Survey archives. Minnesota Department of Employment and Economic Development.

Other government studies, using different methodologies, support the DEED job vacancy survey trends.

For instance, the U.S. Department of Agriculture’s Economic Research Service, in its most recent State Fact Sheets, notes that the poverty rate in Minnesota was 9.5 percent in 1979, 10.2 percent in 1989, 7.9 percent in 1999, and its model-based estimate for 2010 was 11.5 percent.

Coming out of the past decade’s first recession in 2002-2004, the ERS determined that 7.2 percent of Minnesota households were considered “food insecure,” of which 2.5 percent of households were called “very low food security” and were most likely missing meals.

During what were statistically economic recovery years of 2005-2007, but not for the lower and middle classes, the food insecure rate in Minnesota rose to 9.5 percent of which the very low food security households accounted for 3.7 percent.

Then came the Great Recession and the percentages of Minnesota households in danger kept climbing. ERS pegged the 2008-2010 average number of households in the food insecure category at 10.3 percent, and the most food insecure households rose to 4.4 percent.

Future articles will explore how such data influences lives and opportunities in Minnesota. One obvious conclusion can be drawn from just the data above:

People uncertain where their next meal is coming from are not likely to make mortgage payments or secure health insurance coverage for their families, creating economic consequences for all Minnesotans.