A $1 million pickle: Cities in area stand to lose $1 million in state cuts
Alexandria stands to lose $661,124 - 6.5 percent of its total budget - if the latest budget proposal from the Minnesota Legislature is enacted.
House Republican leaders announced the plan Tuesday as part of an effort to plug the state's $6.2 billion budget deficit.
The plan leans heavily on reducing the amount of Local Government Aid (LGA) and Market Value Homestead Credit (MVHC) that cities expect to receive from the state this July.
When contacted by the newspaper and told what the proposal's impact would be on Alexandria dollar-wise, Mayor Dan Ness had a three-word response: "That's pretty ugly."
The $661,124 Alexandria could lose amounts to about 13 percent of the revenue it expects to take in this year.
Other cities throughout the state would be in a similar pickle. Combined, 14 cities in the Douglas County area would be confronting more than $1 million in cuts (see chart).
Ness said the city will soon begin working on a "Plan B" in the event the proposal is approved. He added that the plan will be subject to intense lobbying pressure over the "unfairness" it presents to cities already reeling from budget cuts.
"That money was certified to us," the mayor said. "We should receive it. We took their [the Legislature's] word at face value and budgeted for it."
What could the cuts mean for Alexandria residents?
Ness said the city wouldn't lay off police officers or take other drastic measures.
It may, however, reduce the hours the warming house at the city skating rink is open, let the grass grow a little longer at city parks or ask residents to "adopt a park" to cut down on maintenance expenses.
Another likely victim to the budget axe will be the capital improvement fund - money the city sets aside every year for equipment upgrades, special street work and other projects.
The city increased it capital improvement funds from $38,844 in 2010 to $250,000 in 2011. The projects, which also hinge on state and federal funds, include a new plow at the airport ($150,000); a new firetruck ($450,000); resurfacing Rosewood Lane ($350,000); replacing restrooms at Dean Melton/Fillmore Park ($85,000); a new state-required digital radio communication system (ARMER) at the police station ($75,000); and a phase three water extension project in a newly annexed area ($2.56 million). The dollar amounts listed include state and federal contributions.
Ness said that reducing capital expenditures is one of the "less painful" options the city will consider.
One possibility that could save some cities from making deep cuts is the Legislature may change the LGA formula, basing it more on need.
Smaller, rural cities like Alexandria have more leverage at the Legislature this year, Ness noted. For the first time in many years, a majority of the legislators are from rural areas, not the metro.
Ness said this rural coalition should wield enough power to force property-rich metro area cities like Edina and Minnetonka to shoulder more of the state's budget burdens.
But it won't come without a fight, the mayor predicted. "We could be looking at a range war between rural and metro," he said.
Small, rural cities have repeatedly taken the brunt of the state budget cuts for too long, Ness said.
"We're getting tired of getting stuck for the drinks," Ness said.