Local cities face cuts of $1.77 million

• LGA cuts

LGA cuts

Talk about it

With Minnesota facing a projected $4.8 billion deficit in the next two years, Governor Tim Pawlenty’s recent budget proposal has again put local government aid (LGA) on the chopping block.

Released Tuesday, the governor’s plan aims to cut LGA by 15 percent in 2009 and 31 percent in 2010.

Amongst cities in the Douglas County area, the measure would take away nearly $1.8 million in promised state aid.

Statewide, the League of Minnesota Cities has estimated the cuts at $77.7 million in 2009 and almost $168 million in 2010.

Last month, Pawlenty withheld $110 million in second-half 2008 LGA payments to solve a short-term budget gap, including $623,326 owed to Douglas County and local cities.

Alexandria Mayor Dan Ness said he couldn’t believe Pawlenty is again proposing to balance the state’s books on the backs of Minnesota’s rural cities.

“It is ridiculous to say, ‘no new taxes’ and then force this problem down to the cities and to a lesser extent the counties,” Ness said. “It appears the governor is using the same old, same old modus operandi.”

Ness said Pawlenty used the same tactics the last time the state was faced with a budget crisis back in 2003, cutting LGA and then promising to reinstate funding levels once the economy improved.

But the money never came back, he said.

Pawlenty’s current budget proposal would cut $315,125 out of an expected $1.7 million in LGA due to Alexandria this year, and more than twice that amount in 2010.

“It will have an impact, that’s for sure,” said Jim Taddei, city administrator.

And with the city’s 2009 budget and levy already set, officials have limited options in how to deal with the potential funding shortfall, Taddei said.

“We can’t raise enough money to make this up,” he said. “There’s not much we can do, except look on the expense side and try to reduce those costs.”

Taddei said the city would likely have to delay major equipment purchases, such as vehicles for its police and fire departments.

“The troubling thing about this is … eventually you’ve got to replace [old] equipment,” he said. “You can’t get around it.”

It’s possible other services could also be cut, Ness said.

The other option would be to raise property taxes.

“Which we are very hesitant to do,” Ness said.

The city of Osakis, which stands to lose $46,198 in 2009 LGA under the governor’s proposal, would also likely have to find ways to cut spending, said Angela Jacobson, city clerk.

The city does have some savings, she said, built up from its liquor store’s sales that it could tap if it really needed to.

“If we keep robbing that,” she said, “we’re not going to have anything left when we do need something.”

Osakis has reduced its budget every year since 2003, Jacobson said.

“We, as cities, have done our fair share in trying to cut budgets and cut our expenditures,” she said. “I think the state maybe needs to be the one to look at their budget if they’re the ones in deficit.”

Tags: local, government, aid, budget, cuts