An Echo Press Editorial: Legislature shouldn't rob aid to small cities
By the Echo Press Editorial Board
Undeniably, the Minnesota Legislature has tough decisions to make about how it will get the state out of a $2.3 billion deficit that’s projected to grow to $4.7 billion. But the one thing that they should not do is leave small cities in the lurch by cutting local government aid.
Alexandria council member Roger Thalman shared some insights into how much local governments rely on the aid. He learned about it while attending the Coalition of Greater Minnesota Cities fall conference that took place via a Zoom video conference. Coalition leaders said that local government aid accounts for just 1% to 2% of the state’s budget but it’s a lifeline to keep cities financially strong, providing as much as 40% of their budgets. This money goes to parks, fire protection, law enforcement, streets and other essential services.
A lot is on the line for cities in Douglas County. Here’s how much LGA they are certified or “promised” to receive next year unless the Legislature decides to take it away: Alexandria – $1.58 million, Brandon – $115,585, Carlos – $99,172, Evansville – $179,638, Garfield – $58,395, Kensington – $68,972, Millerville – $11,480, Miltona – $74,359, Nelson – $31,693 and Osakis – $504,273. These were the certified amounts and the cities based their 2021 budget decisions on them. All that planning could be for naught if the Legislature robs local government aid.
When legislators start talking about the cuts they need to make and ask for feedback from their constituents, we urge residents to tell them to fight to keep local government aid intact. And if you start to hear legislators spinning tales about how local government aid isn’t all that important and doesn’t keep property taxes down, don’t fall for it. Press them on it.
Study this information provided by the coalition that separates fact from fiction:
MYTH: LGA doesn’t hold down property taxes.
FACT: Tax rates dramatically changed following the 2013 LGA reform and $80 million appropriation increase ‒ 65.38% of LGA-receiving cities increased tax rates from 2012-13; following the LGA increase (2013-14), 62.68% cities decreased tax rates. The partial restoration of LGA funding in 2014 led to the third-lowest levy increase of the last 25 years.
MYTH: LGA was originally only for small rural cities.
FACT: The first LGA formula distributed aid on a per person basis to counties, which then redistributed it to cities based on their levy size ‒ the larger the levy the more LGA a city received. Aid went to cities across the state regardless of their size or geographical position and clearly based on a formula that was not just for small rural cities.
MYTH: The original intent of LGA was to fund “essential services” that cities couldn’t otherwise pay for.
FACT: At no time since the inception of the program has there been a directive as to how LGA dollars are to be spent by cities. In fact, the first formula gave more aid to cities that levied more, which has no relation to just “essential services.”
MYTH: The LGA formula is “political.”
FACT: The 2013 LGA formula reform was developed by a working group that included legislators and all city advocacy groups. The bill that reformed the LGA formula had broad bipartisan support. The formula is based on objective statistical analysis and is blind to where a city is located or who its legislator is. What would be political – and unprecedented – would be changing the formula based on incorrect ideas about which cities have high property tax wealth, receive the most LGA, and deserve to be cut, without reference to objective formula factors.
It’s a shame that some legislators regard LGA as low-hanging fruit – one of the very first items they pluck to shore up their budget. Instead, they should show their commitment to keep small cities strong and leave LGA alone.