From the Mayors Perspective:
The problem with the LGA formula has nothing to do with the actual dollars. The problem is no one has a realistic idea on how things are calculated. It means cities are unable to realistically plan for a year because there are major unknowns, and many of which are unexplained or out of your direct control.
I remember talking with the late Senator Dallas Sams a few years back when we were trying to figure out how much and how long the reductions were going to be here in Clarissa.
He told me: “Honestly Nate there are only a few guys in Minnesota who understand it because the calculations are so complicated and diversified.” He was right because it took years before we totally understood how long and how much the LGA reductions would be.
Once we knew the information we were able to balance and reprioritize the budget keeping property taxes at the rate of inflation. We were able, as a city, to consolidate departments and streamline areas of our operation. The overwhelming response from people in this area was the question of: “Can I and our council g
o down to the county government and tackle that budget next because they were witnessing near double digit property tax increases.”Restoring the 2003 LGA cuts is a mistake. I have always supported Governor Pawlenty on his LGA decision because he was correct.
Instead our legislators should be looking at reforming the system so that planning can be accomplished by a unit of government so we know what we have to work with in advance. I think part of the tax increase problem since 2003 related to the “unknown”. The other part was poor leadership and budget management by many locally elected officials.
The “reforming” is a code word in this article for getting the LGA funding restored. If the legislature was to do this it should be mandated it go back directly to the property taxpayer and not the local unit of government.
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LGA unity proposal introduced: (Edited portions)
Published: March 5, 2008
By Gary Carlson, Jennifer O’Rourke, and Rachel Walker
That group is made up of representatives of several city organizations, including LMC, the Coalition of Greater Minnesota Cities, Association of Metropolitan Municipalities, the Municipal Legislative Commission, the Minnesota Association of Small Cities, the North Metro Mayors Association, the Range Association of Municipalities and Schools, and the cities of Minneapolis and St. Paul.
The group developed this proposal as an interim step to begin to address problems with the current formula and to hopefully gain legislative support for restoring the remaining 2003 cuts in the LGA appropriation. The bill includes a legislative study and process to identify a longer-term solution to the LGA issue.
SF 3234 is consistent with the League’s policies (FF-3 and FF-4) and maintains the League’s goal of future, comprehensive LGA reform.
SF 3234 would add $90 million to the LGA program, restoring approximately 90 percent of the remaining 2003 LGA cut. It makes several adjustments to the formula as well.
- The main one is to replace the current law regional center aid base with one related to the number of jobs in a city.
- The number of jobs per capita would serve as a proxy for regional center overburden for cities with populations of more than 5,000.
- The current small city aid base would be increased from $6 per capita to $12 per capita. SF 3234 creates a local effort offset that reduces this aid base for cities with strong tax bases.
- For every city with a population of more than 2,500, SF 3234 sets a minimum per capita need of $290. In addition, it would reduce annually volatility for individual cities and eliminate the taconite aid offset.
Finally, SF 3234 also includes a legislative study of LGA with the goal of ultimately securing more comprehensive reform. (THIS SHOULD BE THE BILL AND SCRAP THE REST!)
