Governor’s plan could mean deep cuts for Austin

Published 6:44 am Friday, May 7, 2010

Austin could be looking at nearly $1 million in new Local Government Aid cuts under a recently released budget proposal from the governor — prompting one city official to say enough is enough.

On Tuesday, Gov. Tim Pawlenty rolled out a plan that would cut $536 million from the state budget, including $176 million in aid to local governments. The proposal comes as the governor and the Legislature look to deal with the remaining two-thirds of a nearly $1 billion deficit after the first chunk was erased last month.

To Austin city administrator Jim Hurm, the tune has become all too familiar. Hurm said in the last 16 months, Austin has lost roughly $2.1 million through state cuts.

“I’m not surprised,” the city administrator said of the new budget proposal.

Hurm said the governor’s newest plan could equate to roughly $700,000 to $900,000 in lost funding locally, which could mean service reductions and, possibly, layoffs. Already, Hurm said the city has gone without filling many open positions and has reduced services when possible, like at the library, which has been open four hours less per week since last May.

As the trend of cutting from city aid continues, Hurm said more and more cost-saving options will have to be explored in Austin.

“We’ll have to take a look at anything, quite frankly,” he said.

And the slash-and-burn technique being applied to LGA is troubling to Hurm, who calls himself a proponent of what is dubbed the “Minnesota Miracle.” That name refers to the fact that LGA has leveled the playing field, Hurm said, giving outstate cities with lesser tax bases the chance to compete with wealthier cities in the Twin Cities area. Now, Hurm said the program is “dismantling,” and he said the governor is largely to blame.

However, some of Pawlenty’s cuts to cities were called into question on Wednesday when the Minnesota Supreme Court ruled that Pawlenty overstepped his authority by making spending reductions on his own after negotiations with the Legislature reached an impasse last summer. Though the ruling was specifically directed toward a small, $5 million nutrition program, it could open up the floodgates for legal challenges to all of the $2.7 billion the governor slashed via the power of unallotment, including cuts to LGA.

That doesn’t mean cities should expect money to come back to their pockets — the $2.7 billion would simply have to be addressed by the Legislature on top of the current deficit.

But to Hurm, the ruling proves something he’s thought all along — that the governor should not be able to slash unilaterally from cities.

“He is not the emperor. He has to work with the Legislature,” Hurm said. “At least the Supreme Court stood up and said, ‘Governor, you can’t do this.’”

Pawlenty has asked the Legislature to pass a bill ratifying the earlier cuts, with the governor’s spokesman saying the state doesn’t have the money on hand to cover $2.7 billion in challenges. The governor and legislators have met in recent days on what both sides are calling a “fiscal crisis.”

“When you take a look at what this means, it is very sobering,” Pawlenty spokesman Brian McClung said. “Everybody is in a mindset where we want to work together and find things we can agree on and then we’re going to move forward as quickly as possible.”

The state constitution requires the legislative session to end by May 17, but Pawlenty has the power to call lawmakers into a special session if no agreement is reached before the deadline.

-The Associated Press contributed to this report