Greater Minnesota mayors make a point: LGA cuts driving service cuts and property tax increases
Last week, a group of Minnesota mayors traveled the state to call attention to the impact of state cuts to local government aid. The mayors, from all parts of greater Minnesota, focused on how state aid cuts force them to choose between reducing or eliminating city services and raising property taxes on residents.
They make a strong point. While some in St. Paul have tried to paint local government aid as some kind of big-government program, the reality is something else. What LGA really represents is a return of a portion of our state tax dollars we send to St. Paul to do the things we need to do locally.
With the LGA cut, it means that even more of our money is staying in St. Paul. When we get a lower return on our investment in state government, it has an impact on the services that cities and counties can provide. Something has to give, and the upshot for counties and local communities is higher property taxes and cuts in services.
Funding for LGA since 2002 has fallen by about 44 percent. The Legislature has been able to mitigate some of the governor's proposed cuts to LGA, and even passed a property tax relief bill in 2008. However, those modest gains were all but erased by the governor's recent unallotments, which have cut $211 million from the LGA program and more than $100 million from county program aid.
The Legislature has formed an LGA Study Group, comprised of representatives, senators, and city officials, to begin working on a long-term solution to the property tax problem. The study group's first meeting is at 1 p.m. on Oct. 15 in Room 10 of the State Office Building in St. Paul.
According to Minnesota's Commissioner of Revenue, the LGA cut will result in at least $238 million in property tax increases statewide. In a real sense, this isn't a cut in spending; it's a shift of the tax burden to property owners.
Property taxes in Minnesota cities have gone up nearly two thirds since 2002. Clearly, a new approach must be taken to help counties and cities maintain vital services, while reining in the growth of state spending.
The new working group will provide a forum for citizens, local elected officials, and legislators to analyze these issues and arrive at a nonpartisan, long-term, and more acceptable solution to rising property taxes in the state of Minnesota.