Every day, some 35,000 commuters pour into Duluth, joining the nearly 7 million tourists who visit here annually. And not a single one of them pays a penny in property taxes for the upkeep of streets and infrastructure or for the libraries, parks, clean water, and more they enjoy while here.
So that the entire burden doesn’t have to be shouldered by local Duluth property taxpayers — and so Minnesotans can enjoy the same high quality of life no matter where in the state they live — programs are in place to return tax dollars from St. Paul to those local communities that need them, to offset their expenses, and so all Minnesotans can expect and enjoy similar public services.
The problem is that the state funding for these programs can be altered year to year, often and shamelessly for political reasons. How much cities and counties receive isn’t tied to inflation or a similar metric, either, which would help to ensure that the dollars continue to match the needs.
So cities like Duluth are made to return to the Legislature, again after again — “hat in hand,” as Coalition of Greater Minnesota Cities Executive Director Bradley Peterson told the Duluth News Tribune Opinion page last week — to beg, er, lobby, for their fair share of Local Government Aid (LGA) or County Program Aid (CPA).
“Just as inflation has made the lives of regular Minnesotans more expensive, it is also making everything a city does more expensive. Salaries, benefits, gas for the squad car or parks vehicle, (and) materials for fixing our streets or upgrading our parks are all more expensive,” Peterson said in an interview conducted via email. “Without a sizable LGA increase that will all fall on property taxpayers who are already feeling the squeeze in so many other parts of their lives. Inflation from 2008-2022 has risen 55%. In the same time, LGA has only gone up 17%.”
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To help ensure that funding is distributed fairly and predictably from now on, Rep. Dave Lislegard, DFL-Aurora, has introduced legislation in St. Paul this session to increase both LGA and CPA by $150 million. His bill also would return inflation as a factor in determining annual appropriations. Inflation had been removed from the formula in the late 1990s under Gov. Tim Pawlenty.
Lislegard’s bill had a hearing last week in the House Property Tax Division. In this free-spending session, boosting the bottom lines of cities and counties, while making their state funding more reliable, demands to win approval from all lawmakers and to be signed into law by Gov. Tim Walz.
“As a former mayor (of Aurora), I know the significance of adequate funding for local communities, and the simple reality is Local Government Aid and County Program Aid — which represent a critical state and local partnership — haven’t kept up with inflation or the needs of local residents,” Lislegard said, also in a statement to the Opinion page. “In 2002, LGA represented 4.1% of the state budget, and now it’s just 2.1%. CPA has similarly fallen behind, at 2% in 2002 and is 1% now. Also, with commercial property valuations remaining stagnant, there’s been a massive shift onto residential property taxpayers, which has left families in a bind.”
If approved, Lislegard’s bill would increase Duluth’s LGA from $30.8 million per year to $38.9 million, Virginia’s from $6.2 million to $7.7 million, and Hibbing’s from $8.3 million to $10.1 million. St. Louis County would see its CPA increase from $13.4 million to $21.1 million.
But approval is far from guaranteed, in spite of the clear need. In late January, the governor’s budget proposal included an inadequate only $30 million increase for LGA and CPA — “a disappointing number in light of the current surplus,” Peterson said.
“We have to take advantage of this historic surplus to deliver these key investments,” said Lislegard. “If unaddressed, the trends will only get worse, and families will be the ones feeling the impact.”
For over half a century, Local Government Aid has been a godsend to regional hubs like Duluth , (Willmar) and to poorer, often rural, areas. County Program Aid was created in 2004 when a number of property tax aid programs were consolidated.
The Legislature this year has the chance to boost both programs for cities and counties still recovering fiscally from COVID-19 and its shutdowns, as well as from inflation and the rising costs of seemingly everything. Lawmakers also have the chance to end the every-year battles, political and otherwise, that cities like Duluth are forced to engage in just to get their fair shares.
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“Local Government Aid helps our cities to provide necessary services without raising taxes on our citizens,” Virginia Mayor Larry Cuffe testified last week in St. Paul. “We want to run our cities efficiently with the highest quality services we can provide. To do that, we need support from our state.”
That support can come this session.
This Minnesota Opinion editorial is the viewpoint of the Duluth News Tribune. Send feedback to: opinion@wctrib.com.
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