Levy limits imposed by the state in the closing deals of the 2008 legislative session may promise savings to homeowners and problems for local governments, though, for the most part lawmakers and administrators agree that the area fared fairly well considering the $935 million deficit balanced this year.

“I would say overall it was a tough negotiation, but I think we walked away with a lot of things to be proud of,” state Sen. Dan Sparks, DFL-Austin, said.

Policymakers sealed all aspects of the session late Sunday night, narrowly missing the Monday deadline imposed by the state constitution.

The sticking point, according to local legislators, was levy limits, which Republican Gov. Tim Pawlenty insisted be included.

“And he made it very clear if he didn’t have that, it would blow the deal apart,” Sparks said.

The tax package limits local and county increases to 3.9 percent annually for three years, though includes nearly two dozen exemptions for essential services such as police and fire departments.

“I think we can live with this,” city administrator Jim Hurm said, adding that this year 4 percent of the city’s 7 percent levy increase was covered by local growth.

“It wasn’t as bad as we thought it was going to be,” he said. “I think generally we have a philosophical problem with one person…the local level officials think we should be able to make that decision.”

County coordinator Craig Oscarson agreed. “We elect county commissioners and city council members to make these decisions for us,” he said.

According to Ward Eilness, the state’s revenue commissioner, the cap, nonetheless, will reduce property tax growth by about 30 percent next year, or $75.8 million, with a total savings of $460.5 million over three years. Changes to homeowner assistance will also result in higher refunds, ranging from $460 to $2,300, for some 63,000 homeowners, with 10,000 more people eligible for homeowner assistance.

“They say the devil’s in the details,” Oscarson said, adding that the board will go through a prioritization program likely targeting non-mandated programs such as the Historical Society, library funding, snow plowing and others for potential cuts.

“And I just think it’s pure politics…it’s not really solving the property tax crisis,” he said.

Local Government Aid, another controversial issue in years past, survived cuts this session, bringing Austin back to levels before significant 2003 budget cuts.

“We basically got back what we lost, it just took six years to do it,” Hurm said. The city and Cedar River Watershed will also receive fund mitigation funds, though Hurm said the city doesn’t know exactly what it will get yet.

About 20 cities will compete for $30 million in flood hazard mitigation grants through the Minnesota Department of Natural Resources. In 2006, Austin received a little more than $3 million.

Total capital improvement and other bonding projects were allocated $716 million statewide.

According to state Rep. Jeanne Poppe, education and health care also gained this session, with the latter undergoing reform that focuses on preventative care, chronic condition management and public health. Hospitals, she said, lost; they can expect to see decreases in state reimbursement payments.

Court administration services also took a cut.

Poppe said though she expects a tough session to follow next year, with a $2 billion budget shortfall projected, she believes property taxes and health care will remain key issues.

“I think that the priorities are going to be much as they were last session,” she said.

The Associated Press contributed to this report.