One of the top issues for rural Minnesota in the 2016 Legislature will be the issue of Local Government Aid. There likely will be a showdown on the LGA issue between Gov. Mark Dayton and the DFL-controlled Senate versus the Republican-controlled House.
With a projected $1.2 billion surplus expected in 2016 and an even higher surplus forecast possible in early March, it does not appear logical to argue for additional cuts in the LGA program.
In fact, we believe it imperative that all rural legislators - Democrat and Republican - stand strong in support of the LGA program.
The LGA program is funding dispersed by the state based upon need and can be used to fund any lawful expenditure by a city. The LGA program’s purpose is to equalize communities, regional centers and cities that do not have a strong tax base with those that do.
The LGA program is a critical factor in helping Minnesota cities maintain critical services and infrastructures.
The 2015 Legislature adjourned with no tax bill being passed. The Senate approved a $45.5 million increase in LGA, while the House passed an $85 million cut, which froze all LGA levels and cut $85 million from Minneapolis, St. Paul and Duluth.
The Coalition of Greater Minnesota Cities has called for an increase of $45.5 to the LGA program in 2017. A primary reason for such an increase is that all current LGA levels remain below 2002 levels, when LGA was reduced as a budget-balancing move by Gov. Tim Pawlenty.
Such an increase would bring LGA funding to about $565 million annually, a similar level to 15 years ago.
For the past decade and a half, many Minnesota cities were forced to cut staff, delay infrastructure repairs or reduce services. This has required cities to play catch up at the same time that the related costs increased significantly.
For example, the cost of a new fire tanker truck increased $150,000 during the period that Granite Falls postponed a purchase, Mayor Dave Smiglewski told the Star Tribune recently. Thus, the delay cost Granite Falls taxpayers an additional $150,000 to obtain the same truck.
LGA was created in 1971 as a tool to address municipal budget crunches when local municipal costs overwhelmed the amounts local property owners could reasonably expect to bear.
If legislators in either party want to walk the talk of being “for Greater Minnesota,” then they must support the stabilization of the LGA program and fund an increase in 2017.
We believe it is critical that the Legislature pass an LGA increase during the 2016 legislative session - similar to the Senate’s 2015 proposal of an $45.5 million LGA increase - in a tax bill and Gov. Dayton sign it.
If ever there was a time that Minnesota can invest in its core and Greater Minnesota cities, the year of the 2016 surplus is it.