Cuts could hit rural cities hard

Published 10:44 am Monday, May 18, 2009

Time’s almost up. After months of speculation on which areas of the state general fund will get slashed and by how much, the answers could come as early as today.

The Minnesota State Legislature must adjourn by midnight tonight as required by the Constitution.

And one thing’s for certain, there’s been no quick fix to the estimated $4.6 billion shortfall that’s plagued our legislators.

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According to Associated Press reports, Gov. Tim Pawlenty has said he would use executive authority to fix the budget unilaterally if the deadline passes without a deal, heading off a special session.

If that happens, Local Government Aid may be in trouble.

As part of his proposed cuts the governor announced months ago, LGA would take a hit in communities across the state, including Austin.

Under the proposal, Austin would lose $579,374 in LGA for 2009 and $1,209,834 in 2010.

The city was originally set to get $7,766,163 of LGA in 2009.

Known as part of the Minnesota Miracle established in the 1970s, LGA helps balance the economic disparities across the state.

Places like Austin depend on these funds (it’s 54 percent of the city’s operating budget) and when LGA gets cut at the state level, the effects trickle down locally.

The governor met with the Herald’s editorial board earlier this month, and LGA was on our list of questions.

Gov. Pawlenty said his cuts are a “worst case scenario,” but also added that we are in the worst economic conditions since World War II.

He said, in light of the economic conditions, that he is encouraging cities, counties and schools to freeze public employee wages, and added that city governments should tap into its reserves to help offset the upcoming cuts. He also added that cuts at a local level shouldn’t automatically mean a rise in property taxes.

“The question isn’t if there will be cuts, it’s what’s going to be real and fair under these circumstances,” he said.

The real and fair part is where it gets tricky. Both our local officials and State Rep. Jeanne Poppe (DFL-District 27B) have said the governor’s LGA cuts proposal is too steep.

“I think it’s definitely too severe,” Poppe said. “…That then of course puts the pressure on local cities, schools and counties.”

That it does.

In April, the Austin City Council approved dozens of budget reduction recommendations for 2009 and 2010 in preparation for the possible cuts.

For 2009, recommendations included $66,000 in reductions from the library budget; $22,000 from administration; $172,093 from Public Works; $173,042 from Parks and Rec; and $77,413 from public safety.

Austin officials so far have been proactive in preparing for what could be, in 2010, their lowest LGA allotment since they lost more than $1.3 million in LGA from 2003 to 2004.

The bottom line is that if the governor’s “worst case scenario” goes through, Austin will be hit hard, but will come out of it, just like it did five years ago.

With that being said, LGA is important to rural communities like Austin, and state officials should make it a priority to protect it whenever possible, because for every dollar LGA is cut year after year, the closer our communities get to sacrificing major public safety services such as fire and police protection.