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Increased local government aid vital to government partnerships

State Revenue Commissioner Myron Frans projects a 1.5 percent decrease in property taxes next year. Frans was in Willmar on Monday to meet with county, city and township officials. Tribune photo by Carolyn Lange

WILLMAR --EMDASH-- When a house or barn catches fire in a rural community, property owners expect fire trucks to come screaming down the road.

And they do.

But the cost to provide that service takes a big chunk of the budgets for small cities and the neighboring townships that collaborate to keep residents safe.

Providing quality fire protection is taking an "ever greater and inordinate part of our budget," said Dan Kleven, a supervisor for Kandiyohi Township. "Every year it takes a bigger bite out of our budget."

Kleven made the comments during a meeting Monday in Willmar with other local elected officials and state Revenue Commissioner Myron Frans.

Frans was in Willmar as part of a multi-city tour to tout the impacts of recent legislation that he said will help cities, counties and townships maintain services without having to raise property taxes.

After a decade of declining local government aid --EMDASH-- and the elimination of state aid to townships in 2002 --EMDASH-- Frans said an 18 percent increase in state aid that's included in the 2014 state budget will restore some of the lost financial ground for cities and counties and reinstate aid to townships.

That, combined with a sales tax exemption for local governments, could result in the first decrease in property taxes in Minnesota in a decade, Frans said.

He estimates an overall state decrease in property taxes of $121 million, which is a 1.5 percent decrease.

It's the first time in a decade that property taxes will decline, said Frans.

He did acknowledge, however, this was only a projection and that action by local governments will have the final say about property taxes going up, down or staying the same.

Kandiyohi County Commissioner Dean Shuck said the $400,000 in additional aid the county is expected to receive will help the county create a balanced budget next year without raising taxes.

But he didn't know if county taxes would actually decrease. The county board is just starting the budget process for 2014.

"The levy will go up, but the taxes shouldn't," said Shuck.

County Board Chairman Harlan Madsen told Frans that counties aren't "whining" or "begging" for program aid. It's money due counties as part of the legislative agreement from the 1970 that counties would take over some services the state had previously provided, in exchange for fair compensation.

"It's not like this is a gift," said Frans. "You have real demands."

Sen. Lyle Koenen, DFL-Clara City, who served on the Senate tax committee, said he's pleased the state is "reversing a trend" in property taxes and is "moving in a direction that I think is the right direction."

Rep. Mary Sawatzky, DFL-Willmar, said local government aid helps rural communities fund vital services without strangling local property taxpayers.

"We all want services, but it's hard to pay for them," Sawatzky said.

Of the $506 million in local government aid budgeted for 2014, about two-thirds goes to rural communities, said Frans.

Although the total revenue is an 18 percent increase, it followed a 24 percent decrease in 2013 and is still $60 million less than what the total local government aid was in 2002.

Frans said he recognizes the extra challenges rural communities have to provide necessary services, like fire protection, when there are fewer property taxpayers available to financially support that service compared to populated areas.

"This is a big issue. It's an important issue," said Frans.

Madsen agreed, adding that it's also important to have adequate transportation funds so the fire trucks can get to the fire.

Besides Willmar, Frans was also in Granite Falls, Elbow Lake and Moorhead on Monday to meet with local officials there.

Carolyn Lange

A reporter for more than 30 years, Carolyn Lange covers regional news with the West Central Tribune.

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