Cities Want That Free Money!

May 5, 2013 at 2:08 pm 2 comments

By Andrew Richter

Show me the money is what local governments want! Here is just an absurd article on Local Government Aid;

Brooklyn Park Mayor Jeffrey Lunde has joined Minneapolis Mayor R.T. Rybak and other Minnesota mayors in supporting legislation to make local government aid (LGA) from the state simpler and more reliable.

Both Brooklyn Park and Minneapolis are huge cities that have large tax bases so why should they get a dime?

Brooklyn Park, which has not received LGA for a decade, could get more than $1 million a year if similar proposals in the House and Senate are approved. Under both plans, the state would annually invest an additional $80 million in LGA, bringing the total aid intended for distribution each year from $426 million to $506 million, plus inflation. Of that, Brooklyn Park would get a little more than $1 million in aid this year and about $1.2 million next year.

Since 1972 the state has provided cities with local government aid to supplement property taxes they collect. The money is supposed to be determined by the amount of “unmet need” in a city based on its property tax base.

According to the House Research Department, Brooklyn Park hasn’t received LGA payments since 2003, when it got about $660,000. The city had expected nearly $2.8 million that year, but the Legislature slashed the amount during its 2003 session.

A new formula for calculating aid took effect in 2004, and the city hasn’t received LGA since. “It was at that time the city was forced to make changes,” Lunde said. In some years, Brooklyn Park was slated to receive LGA, but the Legislature cut those funds before they were paid. The city was supposed to get $1.3 million last year – but it didn’t see a dollar. Fortunately for Brooklyn Park’s budget, the city stopped counting on the aid years ago.

Yes they’ve jacked up property taxes! Of course they didn’t cut spending.

“We have told the state we need a reliable partner,” Lunde said at the April 23 press conference. “That partnership has been broken,” Rybak said. The press conference was held at the Zanewood Recreation Center at 7100 Zane Ave. N., where the city has made significant investments in youth programing since 2009, when the building became a full-time recreation center.

Is that an essential government function?

At the press conference, Lunde emphasized the importance of investing in programs for youth. He said not only will such investments help the youth but they will also save the city money in the long run because crime will go down. He said the city measures and tracks progress and can show a link between quality youth programming and reduced crime.

Yeah right, government says that about every program they have; spend now save in the future…..where are the savings????

Lunde said having the state as a reliable partner, would make it easier for the city to invest in important programs for youth without raising property taxes. Local legislators are also on board with LGA changes.

“LGA is basically property tax relief,” said Rep. Michael Nelson, DFL-Brooklyn Park.

No it just transfers the cost of local government on someone else.

Nelson sits on the House property and local tax division that considered the proposal. He said the plan serves cities across Minnesota well.

“It’s predictable,” he said. “Cities can count on it.” Sen. John Hoffman, DFL-Champlin, who represents Brooklyn Park north of 85th Avenue, also supports the plan.

What DFLer doesn’t support more spending?

“(The) current formula is complicated, unpredictable and not an accurate measure of need,” he said in a written statement. “The new approach is need-driven – those cities with the biggest unmet needs compared to current aid receive precedence.”

He noted the formula would redirect aid to 41 cities, including Brooklyn Park, that currently receive no aid. He also added that the proposed formula would respond “more accurately to the needs of suburban communities.”

Lunde said predictability is what the city needs most. He expects Brooklyn Park would be a bit “gun shy” at first and would likely treat any LGA received as a windfall and use it for one-time investments instead of counting on it in the budget process. But he hopes that in time, the program will be reliable enough to bank on.

What? A windfall profit? LGA is supposed to be for NEEDS that local government can’t meet? A windfall? One time investment???? This is just absurd!



Entry filed under: Agenda 21, Brooklyn Park, City Government, Met Council.

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2 Comments Add your own

  • 1. Michael C. Libby  |  May 6, 2013 at 11:42 am

    Please support a statement like “[LGA] just transfers the cost of local government on someone else” with some sort of documentation. Because as I see it, I am less able to pay property taxes in my city because of all the state taxes I pay. And I’m sure the same applies to many in my city. All of us who leave town to work are very likely paying taxes to buy lunch or gas or when stopping at a store on the way home (especially those stores with no presence in our home city). LGA recognizes that the health of Minnesota’s cities isn’t a one-by-one affair, but that all the cities are connected. BP is currently getting no LGA at all. If they get anything it will be a small amount in the overal LGA picture.

    Also, given that one of the biggest ticket budget items in a city like Crystal is the police department, and that most of the laws those police must enforce are state laws… then it makes sense for the state government to provide funding to help offset the cost of enforcing those laws.

    That’s the same reason a city like Minneapolis should get some LGA. Much of Minneapolis is very modest tax-base-wise and yet the city serves as a major engine of regional financial well-being. A lot of people who live WAY outside of Minneapolis go there every day to do business and for entertainment. Those people bring with them extra expenses related to city infrastructure.

    Furthermore, MN state law prevents cities from simply setting their own sales and income taxes, so the state has a taxing power that the cities do not.

  • 2. communitysolutionsmn  |  May 15, 2013 at 11:54 am

    OK I’ll try to take that one by one;

    I don’t think it’s efficient to send money to the state and have them redistribute it. Money is always lost in that process. It also removes local accountability since local officials always have the state to blame if they don’t get all the free money they think they are entitled to. A better system is to send the money directly to your local government and hold them accountable, and get rid of the Met Council while they are at it.

    The local police department actually doesn’t have to enforce state law…..that’s why we need a constitutional sheriff.

    Minneapolis should NOT get LGA and it is false to say they don’t have more taxing authority. In fact they have a .5% higher sales tax within the city (a tax hike on the poorer people). State law actually lets Minneapolis, St. Paul, Rochester, and Duluth apply an extra sales tax if they want. I’m not sure about income tax but keep in mind they they have revenue from the convention center, sports stadiums etc.. that few other cities have. And if they are short of money then quit building bike paths, sidewalks, don’t put up stupid solar panels, and stop subsidizing land around light rail. And does every employee need top make six figures??? Yes cut spending….which with the people they have there right now is a pipe dream.

    If you want to build bike paths everywhere and install solar panels don’t run to the state saying you don’t have money for police!


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