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LGA cuts hit tight budgets
Budgets are already tight in local governments throughout the state, and cities again face potential cuts to Local Government Aid.
by Danielle Nordine | Mar 17, 2011
Budgets are already tight in local governments throughout the state, and cities again face potential cuts to Local Government Aid.
In an effort to educate local residents about the topic and spur discussion, State Auditor Rebecca Otto, along with Red Wing officials, spoke about LGA and the fiscal state of cities across Minnesota at a panel Tuesday.
The city of Red Wing is fiscally sound, Council Administrator Kay Kuhlmann assured the audience at the event, which Red Wing Rotary, Red Wing Area Chamber of Commerce and the League of Women Voters sponsored.
"A lot of what we're dealing with is due to state cuts," Kuhlmann said of budget concerns.
Proposed cuts to LGA would leave Red Wing out 65 percent of what its was slated to receive, dropping aid funds from $1,746,701 to $924,202.
State aid has fluctuated dramatically, especially in recent years, which is hard for local governments, said city Finance Director Marshall Hallock.
"(Volatility) makes it difficult to plan, and difficult to stick to the plan," he said.
However, local governments have been adjusting their budgets to account for the seemingly inevitable cuts.
The city budgets less for state aid each year. Goodhue County, which could see more than half its aid disappear if proposed cuts go through, is hoping to completely eliminate aid funds from its budget in the near future, officials have said.
"We've learned over time that's what's on the line when it comes to cuts at the state," Hallock said.
Still, LGA cuts have a disproportionately negative effect on greater Minnesota communities, Kuhlmann said.
The city already has been doing what it can to make up for tight budgets, Kuhlmann said. More than 21 positions have been cut, ranging across the board from public safety to parks staff.
The budget difficulties also have meant cutbacks in maintenance projects, which could have a long-term effect on the quality of the city's infrastructure such as roads and bridges, Kuhlmann said.
"I know you won't see it in a day or even a year, but eventually you will see it," she said.
Red Wing was generally on par with what Otto described as the financial situation for other cities across the state.
City revenues declined slightly from 2008 to 2009, she said, and expenditures also declined about 3 percent. When adjusting for inflation, cities are spending less now than they did in 2000.
Cities are also seeing funding come from different places - property tax revenue is generally up while aid and other revenue is down, Otto said.
"There has been a shift in the type of revenues (cities) are relying on," Otto said.
As cities and counties make tough budget decisions in the future, Otto urged citizens to voice their opinions to their local government officials.
She emphasized her part in Tuesday's conversation as educational and non-partisan, and she encouraged audience members to use the information to determine what services they want from their city.
"I'm not saying what should happen - that's not my job," she said. "I hope you use this as the beginning of a conversation with your local government leaders about what you think should be happening."