Yesterday, the Senate Taxes Committee passed their version of the Tax Omnibus Bill out of committee. The bill (S.F. 2374), authored by Senate Tax Chair Ann Rest (DFL-New Hope) makes a permanent cut of $20 million a year to the local government aid program (LGA). To see the impact on your city, click here.

The CGMC testified in strong opposition against the proposal.

BACKGROUND

The Senate Tax Omnibus Bill raises $316 million in new taxes for the next biennium. The bill also spends money and makes investments in several areas while creating a handful of new programs. Other than a reduction to the state’s film production credit and some other small items, cities and counties take the brunt of the cuts in this bill. The bill cuts both LGA and County Program Aid (CPA) by $20 million a year. The bill also eliminates the local cannabis aid and transfers those dollars to the state’s general fund.

We expect the tax bill to be taken up on the Senate Floor sometime next week. The one point of good news is that the House tax bill does not cut LGA. Once both bills pass their respective chambers, the differences will be negotiated between the Senate, House, and Governor.

We need your help to stop this proposal!

ACT NOW:

Contact your senator as soon as possible and tell them to oppose any LGA cuts.

Tell them:

  • At a time of financial stress, the state should focus on the fundamentals of government. LGA helps cities provide those fundamental services such as police, fire, infrastructure, etc.
  • An LGA cut—coupled with other challenges such as inflation, uncertainties unfolding at the federal level, and the implementation of Paid Family Medical Leave (an unfunded state mandate)—will result in higher property taxes and less in local government services.
  • The LGA cuts are disproportionately weighted towards Greater Minnesota cities. On a per capita basis, the cut is about $2 per capita in the Metro whereas in Greater Minnesota it is $5 per capita.
  • While LGA is being cut, the Homestead Credit Refund Program (HCR)—which primarily benefits metro homeowners—is being held harmless. Unlike LGA, the HCR is indexed to inflation and has grown (and will continue) at an unsustainable rate. THIS IS UNFAIR. 

Contact info:

  • Click here to email legislative leaders. If the link does not work in your email, you can find contact info for Senate leadership here.
  • Find your senator’s contact information here. 
  • Contact Governor Walz using the contact form here.

Questions?
If you have any questions about tax legislation or this Action Alert, please contact CGMC Executive Director Bradley Peterson at bmpeterson@flaherty-hood.com or 651-357-7369.