Clock ticks down at Legislature: Key issues for rural cities at stake, says coalition
It's crunch time at the state Legislature.
After returning from Easter break Tuesday, legislators have less than a month to finish their work before the session ends May 20.
According to the Coalition of Greater Minnesota Cities — which has 97 city members, including Alexandria and Osakis — if new Gov. Tim Walz and lawmakers are unable to reach agreements on key bills, residents and businesses in Greater Minnesota will pay the price.
The coalition wants to see action taken on three bills — taxes, bonding and transportation.
Bradley Peterson, the coalition's director, and Dan Dorman, director of the Greater Minnesota Partnership, which works with the coalition on economic development issues, stopped in Alexandria recently to outline what's at stake.
Peterson and Dorman agreed that transportation may be the stickiest issue of the session, with sharp disagreement over a gas tax, which would fund road and bridge projects.
Walz's plan calls to increase transportation funding by $18 billion over 20 years by increasing the gas tax by 20 cents — 10 cents a year for two years — and increasing tab fees and transportation-related sales taxes.
The House plan would raise $1.1 billion a year and calls for a 20-cent increase in the gas tax — 5 cents per year over four years — along with tab and transportation-related sales tax increases.
The governor and the House also support transportation increases of more than $60 million annually for cities with more than 5,000 populations.
Under the governor's proposal, when new revenues would be fully phased-in by 2023, Alexandria would receive about $445,000 more in city street aid from the state than it gets under current law.
The Senate hasn't proposed any significant new investments, said Peterson, but it has called for increases in electric vehicle registration fees and a fee on plug-in hybrids that would raise $300,000 a year.
The coalition supports increased funding for transportation infrastructure through existing dedicated sources, such as the gas tax, sales tax on vehicles and an electric vehicle tax.
Plans differ over transportation funding for small cities with populations under 5,000, which receive no dedicated funding from the state. Walz is proposing no dollars; the House is calling for $10 million a year through a motor vehicle lease sales tax; and the Senate is proposing $250,000 in 2020 and $500,000 in 2021 by tapping into the general fund.
Here's how much money small cities in Douglas County would get in 2020 under the House (listed first) and Senate bills:
• Brandon — $9,364 or $228
• Carlos — $9,381 or $229
• Evansville — $10,434 or $254
• Forada — $8,038 or $197
• Garfield — $8,484 or $208
• Kensington — $7,810 or $191
• Millerville — $5,908 or $144
• Miltona — $9,775 or $238
• Nelson — $7,334 or $180
• Osakis — $18,640 or $454
If a tax bill is not approved, it will result in no increase in Local Government Aid, a program that helps cities pay for essential services, such as police and fire protection, while restraining property taxes.
The city of Alexandria is certified to receive $1.52 million in 2019 and under current law would receive a slight increase of $2,309 in 2020.
Under a proposal in the House and by Walz and supported by the coalition, the base funding for LGA would increase by $30.5 million, the amount needed to restore the funding back to its high-water mark in 2002.
For Alexandria, this would result in $1.56 million in LGA next year, an increase of $42,425. Here's how much LGA would increase in 2020 under the House plan in other cities in the county: Brandon — $6,948; Carlos — $12,948; Evansville — $14,677; Forada — no change; Garfield — $5,866; Kensington — $3,917; Millerville — $888; Miltona — $10,128; Nelson — $1,928; and Osakis — $34,324.
At the time of the coalition's stop in Alexandria, the Republican-controlled Senate had not yet proposed a tax bill. It has since came out with a bill that proposes no additional LGA funding.
Although bonding bills are typically enacted in even-numbered years, smaller bonding bills have been passed in odd-numbered years.
The coalition supports a bonding bill that would include $67 million for Public Facilities Authority clean water grant and loan programs, as well as funding for child care facilities, the Greater Minnesota Business Development Infrastructure Grant Program and other infrastructure investments.
Walz has presented a $1.27 billion bonding proposal, which includes $350 million for transportation, $300 million for projects at the University of Minnesota and Minnesota State, and $150 million for housing.
While some of the coalition's priorities receive funding in the proposal, Peterson said many measures fall short of what is needed to address the infrastructure challenges in Greater Minnesota. The Minnesota Pollution Control Agency, he said, estimates that cities throughout the state need more than $5 billion over the next 20 years to keep up with sewer and water projects.
According to the coalition, more than 300 Minnesota cities have critical water infrastructure projects in the works.
After Walz released his bonding proposal, Senate Capital Investment Committee Chairman Dave Senjem, R-Rochester, said if the Senate were to pursue a bonding bill at all, it would be closer to the $265 million amount included in the state's November budget forecast.
In the House, Speaker Melissa Hortman, DFL-Brooklyn Park, said she would prefer a $3 billion bonding bill, but will put a proposal together closer to half that.