Archived Story

City officials want changes to LGA proposal

Published 9:38am Monday, February 25, 2013

Local government officials are relieved the state Legislature will leave Local Government Aid largely untouched, but a proposed new LGA formula have many municipal officials lobbying for a change.

Calling the new formula unfavorable to small cities, city officials across the state recently called on Gov. Mark Dayton to retool his proposal. Dayton proposed an $80 million LGA increase next year, followed by what’s called a pure formula that many city officials say would reduce aid payments in the future.

“The formula limits the loss to $250,000 to $300,000 a year, but in essence each year we would lose that, starting in [2015],” said Finance Director Tom Dankert. “It looks good initially the first year, but … based on projections, it looks like long-term we’d lose under this proposal.”

Austin officials recently joined other city officials across the state to plead their case to the governor, who appeared to welcome their proposals.

“I thought the governor was very engaging,” said Mayor Tom Stiehm. Stiehm joined City Administrator Jim Hurm and Austin City Council Member Roger Boughton at a meeting between the governor and representatives from lobbying group Coalition of Greater Minnesota Cities. Coalition members were initially concerned Dayton would resist changes to the LGA pure formula, but Stiehm said the governor was open to discussion.

“He wasn’t digging a hole or drawing a line,” Stiehm said. “I thought he was very receptive.”

The coalition will likely give a counterproposal to the governor’s plan in the next few weeks.

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