A common refrain heard by testifiers at a House meeting was: “We want our LGA.”
Officials from cities, counties and organizations representing the entities said they could be in dire straits without the expected payment of Local Government Aid.
“It’s money we need. It’s money we counted on,” Julia Whalen, a councilmember from Champlin, told a joint meeting of the House Taxes Committee and the House Property Tax Relief and Local Sales Tax Division. “It’s hard to make a budget work that is already cut to the bone.”
Aid payments to counties and cities are expected to be sent later this month.
The additional concern comes one day after Gov. Tim Pawlenty and legislative leaders said city and county aid would likely be one of the first items the state looks to while trying to erase a short-term $426 million budget deficit for the current biennium. However, State Economist Tom Stinson told the Senate Taxes Committee earlier in the day that the current biennial deficit could increase by another $30 million to $70 million due to a higher-than-expected jobless rate.
According to nonpartisan House Fiscal Analysis, as of Dec. 4, there was a $499.8 million balance in property tax aids and credits that could to be released.
Without the expected funding, Wadena Mayor Wayne Wolden said local units of government may have no choice but to cut spending and hope they can refill budget reserves later.
He and others said that cities and counties would likely have to reduce services the public expects, capital improvement projects could be halted (including some that have federal dollars involved), badly needed water and sewer upgrades may not occur, positions would remain open and employees could have their wages frozen.
Rep. Ann Lenczewski (DFL-Bloomington) and Rep. Paul Marquart (DFL-Dilworth), the respective tax chairs, both expressed hope that the governor would unallot in a fair way, and not solely harm local government units.
“LGA has a target on its back right now,” Lenczewski said. “I don’t know how to make it easy.”