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House LGA proposal disappoints Willmar, Minn., officials

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news Willmar, 56201

Willmar Minnesota 2208 Trott Ave. SW / P.O. Box 839 56201

WILLMAR — Willmar City Administrator Charlene Stevens says she is disappointed the Minnesota House wants to cut Gov. Mark Dayton’s proposed $80 million increase in state Local Government Aid for 2014.

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Dayton proposed the increase in a new LGA funding formula that would have boosted Willmar’s allocation by about 9.6 percent in 2014.

If Dayton’s proposal were to become law, Willmar’s share of the proposed $506 million appropriation would increase $387,303 from $4,052,790 where it’s been frozen since 2010 to $4,440,093 in 2014.

However, the House is proposing to cut $20 million from Dayton’s proposal. Under that proposal, Willmar would receive an increase of about 7 percent or about $289,000 for a total of about $4.3 million in 2014.

Stevens said Tuesday she supports Dayton’s proposal, but is disappointed the House wants to cut it.

Stevens said she still likes the new funding formula, which would provide inflation and population growth adjustments, but added she has concerns about the $20 million gap.

Stevens says the increase would not really return the city to the LGA funding level of 2002.

But she says the increase and new formula would provide some financial stability and allow the city to better plan for future needs.

“Our costs go up. We’ve certainly been hit as an organization. Fuel costs go up like everybody else, and we have some very fuel-intensive services in our police department and in our public works,’’ she said.

“That has been a dramatic increase in our budget and we’ve had to absorb that in our budget either by changing other services or shifting things around,’’ she said. The new formula, she said, “certainly gives us a better opportunity to plan for that in our budget process.’’

Stevens says she thinks citizens understand LGA’s importance and what the loss has meant to Willmar in terms of deferred maintenance and infrastructure projects, cuts in services, and the accompanying lack of stability.

“As the LGA budget has gone down, our property levy continues to go up to try to compensate for that,’’ she said.

Willmar is a charter member of the Coalition of Greater Minnesota Cities. The organization promotes LGA’s importance in general and the new formula in particular.

Coalition lobbyist Tim Flaherty, an attorney and shareholder with Flaherty and Hood of St. Paul, said the coalition is seeking the public’s support and that the legislation establishing the new formula has bipartisan authors.

“A big goal is sustainability of the program. There is nothing more important to the cities or the cities’ taxpayers than having that stability and not having their taxes or services swing wildly back and forth.’’

LGA assists cities with low property tax wealth and greater needs; ensures reasonable property tax rates; and provides city services necessary for economic growth. The Coalition says LGA is $139 million less than what it was in 2002 and they say LGA decreases have led to property tax increases.

Supporters say the additional funding will create more fairness and better chance of passage because the program adds 24 cities, including older metro-area suburbs that had been left out of the program.

Flaherty said Greater Minnesota cities gave up a share of the proposed increase to include the suburbs. But he said the Coalition felt that many of the older suburbs were unfairly treated by LGA cuts.

Flaherty said the nonpartisan staff at the House Research Department, which developed the formula, found that many suburbs (not the wealthy ones) are starting to look like Greater Minnesota cities with declining tax bases.

“We think it’s time to bring them on, both from a policy and fairness basis and political basis. That was part of our thinking,’’ Flaherty said.

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