Local Government Aid cuts and rural Minnesota

Thank LGA and Minnesota 2020's Hindsight Blog both pick up on a recent Mankato Free Press editorial, The end of small-town Minnesota?:

State aid has been cut significantly. Mankato stands to lose $3 million over the next two years as the result of Gov. Tim Pawlenty’s unallotment decision. North Mankato, St. Peter, Wells, and other small towns will also be hurt. They’ll lose significant state funding. Counties won’t be in any better shape.

And while those kind of reductions in state aid have been experienced before over the last several years, a growing local economy always provided a growing base of property value from which to increase local property tax collections without increasing the rate.

That era appears to be ending. Proposals for double digit tax increases may be the norm.

The City of Hutchinson, where I live, anticipates a $628,000 cut in its 2010 budget from what it was originally due, according to Budget hearing lacks public comment in the Hutchinson Leader. However, the town's coming tax increase is said to be small, after several years of larger increases and cuts to city services. The cut is somewhat smaller than what Thank LGA lists in this response sheet from Hutchinson on how the city planned to cope with the cuts.

One of the things the city had talked about eliminating was the community garden, since a position in the parks department wasn't filled following a retirement. However, the decision was made to hike season plot rental from $20 to $35 for us gardeners.

The League of Cities has more on LGA cuts here.

Update: The Alliance for a Better Minnesota has posted about the MFP editorial, with suggestions for action.

Photo: Hutchinson, Minnesota in 1901.

Comments

[Govtmule]

While I agree abritrary cutting of LGA is not optimal, the LGA system is flawed to begin with.

How much does a community benefit from LGA? Assuming most of the dollars provided by LGA come from income tax receipts a portion of the income is paid by citizens. So how much of the Hutchinson LGA allotment was paid by Hutchinson citizens? For the most part it is safe to assume that the towns receiving LGA are getting a benefit but the lack of the transperancy in the system makes voting correctly impossible. Both at the state and local level the dollar shift obscures the impacts of decisions made by politicians.

I say remove LGA all together and base local government on property taxes/ local option sales tax. Divert the LGA money to expanding State aid for roads which is truly a more effective use of funds and achieves statewide goals.