Moorhead EDA recommends raising enterprise‑zone workers’ compensation credit to up to 27% with $30,000 cap

The Moorhead Economic Development Authority on Thursday voted to recommend that the City Council approve a workers’ compensation enterprise‑zone tax credit of up to 27% of an employee’s workers’ compensation cost, with a $30,000 program cap for the 2025 program year. The EDA made the recommendation after staff presented participation data, program balances and policy considerations.

The recommendation matters because the enterprise‑zone credit is Moorhead’s most used business retention tool and can be applied to both existing employers and new arrivals. “Having fund balance provides us with the opportunity to give an income tax credit up to $3,000 per employee per year,” a staff presentation said, noting a large 2022 state allocation that increased the program’s balance.

EDA staff said the program saw 88 businesses file applications in the most recent cycle and that the program typically pays $10,000 or less to 50%–75% of participating firms; two or three businesses a year generally reach the current per‑business cap. Staff described an account balance produced by a past large state appropriation that leaves the program with a reserve; that reserve allows the EDA to both continue ongoing awards and hold funds for potential high‑value recruitment projects.

Commissioners discussed whether to tweak the program to help small businesses absorb new costs such as paid family and medical leave. Commissioner White moved the recommendation, saying, in the motion language recorded at the meeting, to “approve up to 27% credit of the actual workers’ compensation expense with a $30,000 program cap for the 2025 program year.” Commissioner Moore seconded. The board approved the motion by voice vote; the chair called for “Aye” and said the motion carries.

Staff and board members stressed caution about sustainability. “We don’t want to create something that becomes not sustainable for us,” a staff member said, urging moderation so the fund remains viable for future years. EDA members asked staff to model the fiscal impact if the percentage were increased further, and staff said modest increases could be analyzed before the City Council public hearing.

The EDA’s recommendation will go to the City Council for a public hearing at its first meeting in September; final approval of the program parameters would occur as part of the council’s subsequent action on the enterprise‑zone annual allocation.