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Town Balances Budget With Timber Profits

August 23, 1986

TOWER, Minn. (AP) _ When this town runs short of money, the ax falls - but not on the budget.

As the owner of 6,000 acres of wooded land scattered throughout St. Louis County in the Iron Range region of northern Minnesota, Tower is in the enviable position of padding its tax revenue with profits from timber cutting.

″Times are tough for little towns now, so they need that money,″ said Gilbert ″Gundy″ Gunderson, 75, of Escondido, Calif., whose father willed the land to Tower under strict orders that it be used only for logging.

″I think dad would be happy to know what his land has done for this city,″ Gunderson said.

City Clerk Tim Kotzian said Tower takes in an average of $10,000 a year from sales of the pine and aspen left behind 46 years ago by Martin Gunderson, an immigrant from Norway.

By his own account, Gunderson arrived in this country in 1908 at the age of 25 with less than $10 in his pocket. He worked his way from logger to lumber mill owner and served a term as mayor of Tower.

When Martin Gunderson died, he left his timber holdings to the town.

″Dad didn’t want any two-bit politicians to do anything with his land,″ said Gundy Gunderson, who spends summers in a campground in Tower on the shores of Lake Vermillion.

″He wanted the money from the timber to benefit Tower,″ and he stipulated that the land be used exclusively for timber production.

None of the land was left to family members because the three Gunderson children had moved to other states by the time the gift was given, the son said.

Funds from wood sales are regularly tapped by the city council to pay municipal expenses. Among other things, timber money covered the $74,000 remodeling of Tower’s city-run liquor store and tavern, Kotzian said.

The municipal forest fund now stands at about $30,000, he said.

″Let’s face it, that municipal forest helps keep taxes down in the city. It acts just like a municipal liquor store,″ Kotzian said.

Other cities in Minnesota have timberlands that they harvest for extra revenue, but none come close to Tower for volume and few, if any, own any land outside their own city limits, Kotzian said.

There are 16.7 million acres of commercial forest in Minnesota and Tower is in the heart of the timber country. Minnesota ranks 15th in the country as a producer of forest products and the industry provides about 40,000 jobs in the state, said Russ Allen, director of a statewide industry trade group based in Duluth.

Martin Gunderson originally left about 10,000 acres to the city of Tower. But the federal government has since forced Tower to sell 4,000 acres of the land to expand wilderness areas in the state, Kotzian said.

A part-time city employee oversees the sale of timber from the lands, Kotzian said. Tree stands are sold to loggers who cut the wood and sell it to nearby paper mills, waferboard plants and saw mills.

Kotzian said St. Louis County officials recently have raised questions about whether Tower’s land holdings outside the city limits should be taxed by the county. Even though the issue is not completely resolved, it looks as though the city will retain its tax-exempt status, Kotzian said.

″If the city is selling the timber and the money is coming to the city, then we shouldn’t pay any tax,″ Kotzian said. ″I think we’re a special case.″

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