City: LGA cuts fall on local taxpayers

Published 5:00 pm Saturday, February 5, 2011

Leave no stone unturned.

That’s the angle local democratic legislators are taking when it comes to mending Minnesota’s budget problems.

Rep. Jeanne Poppe, DFL-Austin

Rep. Jeanne Poppe, DFL-Austin, and Sen. Dan Sparks, DFL-Austin, met with the mayor and City Council members Friday to talk about state budget cuts, and the message was clear that no area of the budget is safe.

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“Any and all areas of the budget will be looked at and possibly take a hit,” Poppe said at the meeting.

Both Poppe and Sparks expressed hope, however, that the Legislature and governor will devise creative ways of increasing revenue while also cutting spending. They reiterated the importance of Local Government Aid for the city of Austin and noted cuts to LGA will directly affect property taxes unless other cuts to the local budget are made to compensate for the blow.

Sparks said, according to the Dept. of Revenue, that property taxes will increase 67 cents for every dollar of LGA that is cut.

With the most recent Senate budget bill slashing around $600 million from the program, property taxes would increase by more than $300 million across the state.

Sen. Dan Sparks, DFL-Austin

“We’re not going to balance the budget on the elderly and middle class through property taxes,” Sparks said.

Although it seems obvious that LGA will be cut in some manner, Poppe said rushing to make cuts is not necessarily wise, especially when the governor hasn’t come out with his full balanced budget proposal yet.

“I hope there isn’t just a slash and burn reduction,” Poppe said. “We need to add stability to the system.”

“I’m certainly hopeful that we can keep (LGA) in the budget,” Sparks added.

Mayor Tom Stiehm asked if the Legislature is making plans to reconstruct or replace LGA with another similar program, but Poppe said it seems the program will stay as is — plus cuts — for now.

Council Member-at-Large Janet Anderson broached the topic of taxing services like tattooing, piercing and some hair or nail services.

That idea has been discussed in the Legislature in the past, and Poppe said it could come up again if lawmakers start getting creative.

“Anything is possible. Anything could come back up,” she said. “It will be interesting to see what the majority party will be willing to swallow.”

The legislators also said its unlikely the Republican majority will look at sales tax proposals as a potential source of revenue.

Cuts to higher education, increases in tuition costs, local option sales tax availability and cuts to health and human services could soak up some of the blow to LGA by the end of the legislative session, however. Gov. Mark Dayton does not unveil his budget proposal until Feb. 15, at which point the path of the budget deficit will become more clear.

“This is only the first bite of the apple,” Sparks said.

He and Poppe meet with the mayor and council members every year so they can take the city officials’ concerns to St. Paul. They both said these annual meetings are a good chance to strengthen communication between lawmaker and constituent and to learn of any new issues that may be of concern.

“It’s about the relationship we have with local officials, because that’s very important,” Poppe said. “It helps us to have more effective dialogue with each other.”

“Every year it’s important to sit down and listen to the issues and concerns,” Sparks added.