Commentary: Outstate cities are harmed by LGA?cuts
There is an interesting divide emerging between the Minnesota Chamber of Commerce and some local chambers. Last week, the state chamber publicly took local chambers in greater Minnesota to task for signing, or even considering signing, a resolution supporting the Local Government Aid program.
That was a hard blow to businesses and chambers whose economies are on the line. They understand that the LGA program is critical not only to their businesses and to the economy of greater Minnesota, but to the economic health of the state as a whole. They disagree with David Olson, president of the state chamber, who said local chambers that support LGA are simply protecting the status quo.
Unfortunately, the status quo over the past few years has been a history of LGA cuts leading to higher property taxes and reduced services for businesses and homeowners in greater Minnesota and the inner city, while those located in high property wealth cities, particularly in the suburbs, have remained unscathed. If LGA is cut, these inequalities would accelerate, making businesses in greater Minnesota even less competitive with those in property rich cities or in other states and that is not acceptable.
The state chamber says that when it comes to weathering the current economic storm, everything should be on the table. However, as the mayors of cities that have had to struggle with balancing the level of property taxes with the service needs of our businesses and community, we see nothing but the status quo in what they are asking. When it comes to raising revenue, property taxes are always on the table while other revenue sources appear to be untouchable, and when it comes to cuts, some aid programs, like LGA, are front and foremost while others are ignored.
The Coalition of Greater Minnesota Cities, of which our cities are members, has also been chastised by the state chamber. They say that we oppose change, but what we really oppose is their targeting of the businesses and communities with the fewest resources and highest needs. It is time for them to take their own advice by actually putting everything on the table instead of serving us more of the same old LGA cold cuts as though it is something for which we should be thankful.
Truth be told, the LGA program has served the state well, keeping all areas of the state prosperous. That being said, we do not oppose changes in the program, but any reform proposal should be evaluated by two standards:
- Does the reformed program continue to address the original goals of the LGA program, which is to even out property taxes across the state?
- Do changes in the LGA and other property tax relief programs distribute property tax increases and service delivery reductions fairly across the state without expecting greater Minnesota to carry more than their share of the burden?
So far, we have not seen any proposals, including the state chamber's vague "reform" policies that meet these criteria. What we have seen is that, in taking local chambers to task for their support of the LGA program, the Minnesota Chamber of Commerce discounts the fact that what helps large corporate headquarters does not necessarily benefit Main Street businesses or industries located in greater Minnesota. It is time the chamber takes all businesses in the state, not just big business, into account when setting its policies.
Vern Rasmussen is mayor of Albert Lea and Dave Larson is mayor of Bemidji.