Commentary - Cuts to cities go too far
By Dan Ness,
mayor of Alexandria
As a Republican mayor, I share Governor Pawlenty's conservative viewpoint that, at its best, government balances the public's desire for services with fiscal prudence. Ironically, it is because we share this belief in protecting taxpayers that I am disappointed in the governor's proposed cuts to the local government aid (LGA) program.
To me and to the other Republican, Democratic, and Independent mayors who share my support of LGA, being a taxpayer watchdog means protecting our residents from paying exorbitant property taxes for the services all Minnesotans are entitled to, such as public safety, access to a regional airport, libraries, and parks. The LGA program helps cities provide these services at an affordable price. Faced with deep cuts to the program, city officials across the state will be forced to significantly reduce services or increase property taxes.
There really is no third option. While the governor has suggested cities dry up their "rainy day funds," this quick fix is fiscally irresponsible. Because cities only receive revenues twice a year, we rely on cash-flow accounts between paychecks to keep streetlights on at night and our police officers ready at a moment's notice. Depleting these funds would require cities to short-term borrow in order to pay the bills, which we can all agree is not a wise way to manage any budget, neither a family's nor a city's.
A better way to manage a budget during a crisis is to acknowledge the harsh realities of the times and act responsibly. For city leaders, this means making what are always difficult and frequently unpopular decisions. In inflation-adjusted dollars, the LGA program received $247 million less in 2008 than it did in 2002. As a result, cities have shrunk their workforce by 6 percent between 2003 and 2008, while the state's workforce has ballooned by 10 percent in the same period. The loss of these jobs at the local level translates into lost services - fewer police on the street, less frequently plowed roads, and delays in park maintenance.
Similarly, funding for state programs has actually increased 3.2 percent since 2002, while the revenues available for local spending have decreased 13.7 percent. In a city's daily operations, this drop in dollars has meant leaving police and fire positions vacant, reducing library hours, and closing city parks, in addition to other cost saving measures. All of these efforts demonstrate that cities are willing and able to make the hard choices to control spending.
Yet despite our best efforts to account for LGA cuts through spending reductions alone, property taxes have increased drastically since 2002. Some folks, including the governor, have asked where this increased revenue is going if cities also need state aid to pay for services. It's really quite simple: property taxes have increased because residents still require a basic level of services that lower property taxes and a stripped-down LGA program are failing to support. In both greater Minnesota and the Twin Cities, property tax rates need more stability and fairness, and this is what an adequately funded LGA program ensures.
Contrary to what the governor has stated publicly, cities have never suggested that they should be immune from any cuts whatsoever this session. The state's budget deficit is deep, and everyone needs to share in the sacrifice. We simply feel that the governor's proposed cuts to LGA - which amount to $246 million over the 2009-2010 biennium, or a 23 percent cut to the program - will further damage the LGA program's ability to keep property taxes and service levels fair statewide. That's why we have advocated for cuts similar to the House's proposal, which entail an $85 million cut in the 2009-2010 biennium. This figure is on top of the governor's $54 million year-end cut to LGA in 2008 that many cities are accounting for in 2009.
In the end, protecting LGA from steep cuts is about keeping Minnesota communities safe, affordable, and viable. With the stakes high, property taxpayers need the governor on their side when it comes to LGA.