Officials brace for LGA outcome

Published 10:11 am Monday, May 18, 2009

Austin city officials are expressing concern over Gov. Tim Pawlenty’s announcement he plans to use his line-item vetoes and unallottment authority to balance the state budget rather than call a special session.

The Legislature is scheduled to adjourn today.

City officials in Austin, which is highly-dependent on Local Government Aid, believe if the governor has the final word on the state budget, the impact could be worse than expected. Pawlenty has repeatedly said during the session he is not interested in raising taxes.

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In a letter to Speaker of the House Margaret Anderson Kelliher dated April 7, Pawlenty said he is “very disappointed that the Legislature ignored an understanding between my office and legislative leadership and my repeated warnings to abide by the state’s long-standing debt limit. It is irresponsible to exceed the ‘credit card limit’ that has been maintained by governors and legislators from both parties for the past 30 years.”

Austin Mayor Tom Stiehm stated in a news release Friday that Pawlenty’s plans put the city – where LGA accounts for 54 percent of its revenue – in a “bad situation.”

“Our city has lost nearly a half-million dollars by a governor’s unallotment in late 2008,” he said. “He further proposed state aid cuts of over a half-million dollars in 2009 and $1.2 million in 2010. Austin, like many rural communities, depends on this aid to reduce property taxes and keep city services at a level to be competitive with richer urban cities.”

Stiehm urges citizens to contact the governor and ask him “to work with the Legislature to find a state budget solution that does not fall on the backs of citizens of rural cities such as Austin by unallocating even more local government aid. Don’t take the easy way out of solving state budget problems on the backs of property taxpayers.

If it takes a special legislative session to come to a fair compromise with the Legislature, call one.”

Austin City Administrator Jim Hurm said he just wants a compromise.

“’Compromise’ is not a bad word,” Hurm said Friday.

“Both the Senate and the House had less effects on the aid than the governor’s proposal,” he said. “It’s likely we would get hit harder than if they would be willing to have a special session, if that is what it takes to come up with a reasonable compromise.”

Hurm said that Minnesota is a “special state” because of LGA, implemented in the early 1970s as part of the “Minnesota Miracle.” He believes cutting LGA will force cities to raise property taxes, which contradicts the governor’s “no new taxes” policy.

“I guess I expected perhaps a bill that would be vetoed and it would enter into a special session,” he said. “Instead, we’ll just dump it on the property tax-payer.”