Big Glitch in DMC State Funding Formula
A Twin Cities business publication is reporting the State Attorney General has issued an opinion that undermines the financing plan for the Mayo Clinic’s Destination Medical Center project.
According to Finance and Commerce, the AG opinion published Tuesday uncovered an error in the DMC funding formula that requires $12-billion dollars in private investment to qualify for the full state match of $327-million dollars in funding over the next 20-years. When the DMC plan was rolled out last year, it was understood that the Mayo Clinic and other parties would need to make about $6-billion dollars in private investments to leverage the full state match.
The Finance and Commerce report says the funding formula included in the DMC legislation sets the level of state funding at 2.75-percent of the qualified private investments. DMC officials and the Mayo Clinic contend that percentage should be applied cumulatively, which means the state funding would be based on the total amount of private investment in DMC, not just the amount of private investment made in the previous year.
The publication is reporting the AG opinion agrees with the Department of Employment and Economic Development interpretation of the law, which applies the 2.75 percentage to only the prior year investment.
The State Legislature is expected to be asked to address the issue next year.
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