Some small communities 'thunderstruck' about possible LGA reductions
NEW LONDON -- The New London City Council has already reduced its police coverage to help make up for the $51,241 in local government aid Gov. Tim Pawlenty cut from the city's 2010 budget.
If the governor's proposal to take another $57,539 away from the city this year is approved, the council may have to eliminate funding for the program altogether.
"We understand (the governor's budget) is just proposed at this time, but we're taking it very seriously," said City Administrator Trudie Guptill.
"The line items are about as lean as they can be without eliminating the services," said Guptill. "I don't know how we're to do it."
The governor has cut local government aid through unallotment, which is the executive branch power to reduce expenditures to prevent an anticipated budget deficit.
"I'm thunderstruck," said Atwater City Clerk Goldie Smith, when asked about the additional $51,526 the governor's proposal would take from their LGA allocation this year, on top of the $46,420 that has already been eliminated.
"I'm stunned," added Smith, who expects cities from around the state will be "voicing their opinions quite loudly this time" about the reductions.
Having a total of $97,000 cut from Atwater's expected LGA revenue in one year would be tough on the town of barely 1,000 residents. "It's forcing our hand to raise taxes, but we don't want to," said Smith.
Increasing the levy is exactly what the city of Benson did to make up for the $155,160 that was cut from their 2010 state aid through unallotment.
Pawlenty's proposal to cut another $183,810 would be "one step forward and two steps back," for the town of 3,000, said City Administrator Rob Wolfington.
If the city of Benson had not increased the levy to make up for the unallotment, the town would now be "four steps back," he said.
The city was planning to use $200,000 in general fund capital to pay for street work this year. Now that money may be used instead to fill gaps for the next reduction in aid.
Given the size of the state deficit, Guptill said, she has no doubt state aid to cities will be cut to some degree and city councils will be faced with making even deeper cuts that could eliminate some programs.
"We have no choice," she said.
Atwater, New London and Benson will still receive some state aid (Atwater - $180,000; New London - $217,000; Benson - $592,000), but under Pawlenty's proposal, all of Spicer's state aid would be taken away.
Unallotment took away $63,580 and Pawlenty is proposing that Spicer's remaining $47,554 be cut this year.
Willmar's local government aid would be reduced $680,593, which is in addition to the governor's current unallotment of $620,785. The cuts will reduce Willmar's aid from a certified amount of $4,673,575 to $3,372,197.
"Clearly, if the governor's proposed cuts prevail, then we're going to have to go back and revisit our 2010 budget and try to figure out a way to deal with the loss of $680,000 in LGA revenues,'' said Willmar City Administrator Michael Schmit.
However, he is suggesting the city wait to see how the legislative session plays out before making any decisions.
"I suspect that there may be some room for discussion,'' he said. "There may or may not be some compromise. But clearly I think cities through the League of Minnesota Cities and the Coalition of Greater Minnesota Cities are all imploring the Democratically-controlled Legislature to soften the blow a bit.''
He said there's no way of knowing what's going to happen. Nevertheless, the city is preparing for an outcome that will see significant LGA reductions and is planning accordingly.
"We're going to hold off on some major capital equipment purchases. We're going to hold off essentially on all major expenditures that don't have some dedicated source of revenue and see what the Legislature does at the end of the session,'' he said.
"I've taken the position that like in previous years there is no immediate need to panic and we just need to see how this all plays out and we'll deal with it. I think it's a foregone conclusion that we're going to be facing some more cuts, but to what extent it's too early to tell.''