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For Immediate Release
Contact: Julie Liew, jlliew@flaherty-hood.com
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ST. PAUL—It took years of advocacy by city leaders and a late-night special session to get there, but funding for the Local Government Aid (LGA) program is finally being restored to its 2002 high-water mark.

The tax bill passed by the Legislature in the wee hours of Saturday morning contains a $26 million increase in LGA for 2020, followed by an additional $4 million boost in 2021, bringing total funding for the program to $564 million. The bill is now headed to Gov. Walz’s desk. He is expected to sign it, along with other key budget bills, on Tuesday.

“Our No. 1 priority for this year was to get LGA funding back up to the 2002 level,” said Ron Johnson, who serves as president of the Coalition of Greater Minnesota Cities (CGMC) and is a member of the Bemidji City Council. “I’m ecstatic that the Legislature and Governor were able to work together to make that goal a reality. Cities all across the state, and especially in Greater Minnesota, are going to benefit from this important investment.”

This increase has been a long time coming for the nearly 90% of cities in Minnesota who rely on LGA to help pay for city services (such as public safety, street maintenance, parks and libraries) and restrain property taxes. While LGA has received occasional boosts in funding in recent years, cities have still been playing catch-up since drastic cuts to the program in the mid-2000s.

“As city officials, we work hard to keep our city budgets and property tax levies in check, but it is difficult when costs for everything from employee health insurance premiums to construction materials continue to rise,” Johnson said.

“A great thing about LGA is that it gives cities the flexibility to make investments wherever they are most needed,” he added. “With this bump in funding, some cities will be able to hire an additional firefighter or replace a beaten up old snowplow, while others might use the extra LGA to hold down their levies.”

Bradley Peterson, executive director of the CGMC, credited tenacious city leaders, Gov. Walz, House Tax Chair Rep. Paul Marquart (DFL-Dilworth) and other state lawmakers for their hard work in getting the LGA increase through the Legislature this year.

“Successes like this have many parents,” Peterson said, noting that LGA is a prime example of an issue where the divided state government was able to reach a compromise for the good of the state.

In addition to LGA, there were other bright spots for Greater Minnesota in the special session.

The Legislature approved funding to help address the child care shortage in Greater Minnesota, including $750,000 to be divided between the six Minnesota Initiative Foundations for child care provider training and business assistance and an additional $750,000 for child care grants, of which at least 60% must go to Greater Minnesota. It also passed $40 million for rural broadband, $18 million for clean water infrastructure grants, $3.5 million for the Greater Minnesota Business Development Public Infrastructure Grant Program and $1.35 million for the Greater Minnesota Job Training Incentive Program.

However, there were some major disappointments in the session as well.

After legislative leaders were unable to agree on adopting any new revenues for transportation, the Legislature passed a pared down transportation bill that included no funding for small-city streets and no additional funding for the Municipal Street Aid or Corridors of Commerce programs.

And perhaps the biggest disappointment of the session was the failure to pass a bonding bill. Johnson said city leaders were counting on a bonding bill to help pay for critical infrastructure needs such as repairs to wastewater treatment plants and other city facilities, road improvements and new or expanded child care facilities.

“In some ways this was a bittersweet legislative session for Greater Minnesota overall,” Johnson said. “We are pleased with the LGA increase, but the lack of a bonding bill or comprehensive transportation bill means many important projects will have to be pushed aside for at least another year.”

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The Coalition of Greater Minnesota Cities is a nonprofit, nonpartisan advocacy organization representing 97 cities outside of the Twin Cities metropolitan area. The Coalition educates legislators about issues important to Greater Minnesota. Visit the CGMC online at greatermncities.org and follow us on Twitter @greatermncities.

The Legislature is back in session! Governor Walz called a special session for 10 a.m. Friday with the goal of passing the state budget. While the Governor and legislative leaders have expressed preference for a one-day special session, it remains unclear whether it will stretch into the weekend. Throughout the week committee chairs, legislative leaders and nonpartisan legislative staff were hard at work hammering out the final details on the big-ticket budget bills. By Thursday evening most of the conference committees had completed negotiations and released proposed bills that will be voted on by the full House and Senate during the special session.
 
Here is where things currently stand on the CGMC’s top issues:

  • Local Government Aid – The proposed tax bill includes a $26 million increase in LGA for 2020, and an additional $4 million increase the following year, restoring LGA to its 2002 level starting in 2021.This document from MN House Research shows how much LGA each city would receive in 2020 under the bill. In addition, the bill includes a provision that says that no city will receive less LGA in 2020 than they received in 2019.
  • Clean water infrastructure – We are waiting to see if our request for $67 million for clean water grant and loan programs will be included in the bonding bill. However, the proposed Legacy bill includes $18 million for the Point Source Implementation Grant Program, which helps cities pay for water infrastructure projects.
  • City streets – The proposed transportation bill includes no funding for small-city streets (cities under 5,000 in population) and no additional funding for the Municipal Street Aid program for cities over 5,000 in population.
  • Corridors of Commerce – The transportation bill does not include any additional funding for Corridors of Commerce, but it keeps the $25 million/year ongoing appropriation for the program which had been potentially on the chopping block.
  • Child care grants – The proposed omnibus jobs bill includes $750,000 to be distributed between the six Minnesota Initiative Foundations (MIFs) for child care provider training and business development assistance. The bill also includes $750,000 for the Department of Employment and Economic Development child care grant program, of which at least 60 percent must go to Greater Minnesota.
  • Child care facilities grants – This issue remains up in the air as the Legislature attempts to craft a bonding bill.
  • Greater Minnesota Business Development Infrastructure Grant Program (BDPI) – The BDPI program is typically funded mostly through the bonding bill, so we are still waiting to see if it will be included. However, the proposed jobs bill includes $3.574 million ($1.787 million per year for two years) for the program.
  • Job training – The jobs bill includes $1.35 million for the Greater Minnesota Job Training Incentive Program.
  • Broadband – The agriculture & housing finance bill includes $40 million for the Border-to-Border Broadband Development Grant Program.

Once the special session has concluded, we will provide more in-depth analysis on how Greater Minnesota priorities fared at the Legislature this year.

After blowing past their own self-imposed deadlines, Governor Walz and legislative leaders House Speaker Melissa Hortman and Senate Majority Leader Paul Gazelka finally reached an agreement on the state budget Sunday evening. See their signed agreement.

Although Monday was the final day of the regular session — per the State Constitution — a special session will be required for the Legislature to complete its work and pass bills. Governor Walz and legislative leaders have indicated preference for a one-day special session to be held this Thursday, but the exact timing and duration of the special session are still up in the air.

As all three stated during their joint press conference Sunday evening, the agreement reflects a compromise on all sides with no clear “winner.” The two major sticking points in negotiations were the gas tax (Governor and House wanted a 20 cent increase; Senate wanted no increase) and health care provider tax (Governor and House wanted to extend the 2% provider tax set to sunset this year; Senate wanted to eliminate it). Ultimately, the final agreement included no gas tax increase and a 1.8% provider tax with no sunset.

While there is an agreement on the broad budget numbers, the various conference committees were tasked with hammering out the details by 5 p.m. Monday. Reportedly most of them failed to meet that deadline. There is talk that now the bills will be pulled out of conference committee and the final details will be decided between Governor Walz, legislative leaders and the respective committee chairs.

What does it all mean for Local Government Aid (LGA)?

The prospects for an LGA increase — which, if there is one, will be included in the tax bill — are still up in the air.

The tax bill agreement includes only three specific items: a reduction in the second-tier individual income tax rate from 7.2 percent to 6.8 percent, $20 million for the Minneapolis Employees Retirement Fund and a $50 million reduction in the state general levy, which is a statewide property tax that primarily applies to commercial-industrial property. All other issues were left up the conference committee to decide.

The tax bill was given a $0 target, which means that any increase in tax revenues must be matched by an equivalent reduction in revenues or increase in tax aids and credits (e.g. LGA). Federal conformity, Minnesota’s response to the 2017 federal tax overhaul, will play a significant role in shaping what a final tax bill looks like as the plans put forth by Governor Walz, the House DFL and the Senate GOP all generate additional revenue that could be used to pay for other priorities within the tax bill, such as increases to LGA or an expansion of the Working Family Credit.

After the budget agreement was announced Sunday night, we quickly sent out a news release from CGMC President Ron Johnson reiterating that Greater Minnesota communities are counting on the Legislature to pass a $30.5 million LGA increase this year. The CGMC also sent a letter from Ron to all Greater Minnesota legislators arguing that an LGA increase is necessary to provide balance to the tax bill, because 73 percent of the property tax relief provided by cutting the state general levy will go to property located in the metro.

What about a bonding bill?

Governor Walz and the legislative leaders have agreed to a $500 million bonding bill, which includes $440 million in general obligation bonds and $60 million in housing infrastructure bonds. However, the details of what will actually be included in said bonding bill have yet to be determined. From the CGMC perspective, we are hopeful for dollars for clean water infrastructure (PFA $$$), the Greater Minnesota Business Development Infrastructure grant program and child care facilities grants. Several of our member cities also have important projects vying for funding.

It is important to note that unlike other bills, the bonding bill requires a supermajority to pass. That means that it will not pass in either the House or Senate unless some legislators in both chambers vote across party lines. In comments made to reporters following announcement of the budget deal, House Minority Leader Kurt Daudt threw some cold water on the idea of any House Republicans voting for a bonding bill. However, it is quite possible that some House Republicans may choose to break from their party in order to get funding for important projects in their districts.

And CGMC’s child care proposals?

At this point there is no news to report on our two child care priorities: funding for the Minnesota Initiative Foundations (MIFs) for provider training & business assistance and bonding money to build or expand child care facilities. The MIFs proposal is still being considered as part of the omnibus jobs bill, and child care facilities grants are part of the ongoing bonding bill discussions.

Any hope for transportation?

The gas tax was one of Governor Walz’s highest profile proposals this session. He talked about the need for new transportation revenues on the campaign trail and reiterated that commitment the day after his election as governor. This session’s House transportation bill was particularly promising for CGMC priorities. It included new funding for Corridors of Commerce, significant new funding for MSA cities, and a permanent, dedicated funding stream for small cities. When the final budget deal was reached, however, all of those priorities ended up on the cutting room floor.

For cities with populations greater than 5,000, the status quo will hold. With no additional funding coming into the transportation formula, larger cities will not see increases through the municipal state aid formula.

For small cities, the jury is still out, but the path forward is difficult. Without significant new funding for transportation and a relatively small general fund target for transportation, it is difficult to see how the House and Senate come up with a compromise plan that isn’t an abject failure for small-city street funding.

Further, without new funding in the transportation system, significant investments in Corridors of Commerce may not be possible this session. Since it appears that a comprehensive transportation package is now off the table for this year, the CGMC will shift in its focus in the upcoming special session to maintaining the $25 million/year base appropriation for Corridors of Commerce, which the Senate has proposed eliminating. While the Corridors of Commerce program is not perfect and could use some tweaks in the way it scores projects for funding consideration, it remains one of the few mechanisms for funding critical highway projects in Greater Minnesota.

How will the special session play out?

The legislative leaders have hinted at holding a one-day special session on Thursday. Accomplishing that in one day would require suspending the normal procedural rules in each chamber which require action on a bill take place over multiple days. A vote to suspend the rules requires a three-fifths majority, which would require six GOP votes in the House. The House GOP caucus has threatened to vote against such a motion. Failure to suspend the rules means a special session could take several days to finish.

It’s important to note that while there is a global agreement between the Governor, Speaker Hortman and Sen. Gazelka, there are still 199 other legislators to consider — some of whom may not be happy with the terms that were agreed upon or the “cone of silence” that surrounded the negotiations. So while there are just hours until today’s midnight deadline for the regular legislative session, the Legislature’s work remains far from over.

As the special session plays out, CGMC staff will be busy following all the action at the Capitol and continuing to advocate for Greater Minnesota priorities.

Questions?

If you have any questions, please contact CGMC Executive Director Bradley Peterson at bmpeterson@flaherty-hood.com or 651-225-8840.

With just less than three weeks left in the legislative session, it is vital that we work together to keep legislators focused on Greater Minnesota priorities such as Local Government Aid (LGA), child care, clean water infrastructure and transportation. To help advocate for these and other issues, we encourage all Greater Minnesota city leaders to join us for an End-of-Session Lobby Day & Ice Cream Social on Wednesday, May 8. 

The event is FREE to attend, but please RSVP by sending an email to Meghan at RSVP@flaherty-hood.com (include your name, city and position/title).

We hope to get as many city officials to attend as possible! Share this Lobby Day Flyer and encourage other city officials and staff to join us.

Parking Info – Attendees may park for free in the lot located at 525 Park Street in St. Paul, just a block from the Capitol. However, a parking permit is required. Please print this parking permit in color, write in the event date (May 8) and place it on your dashboard.

If you have any questions, please contact Julie Liew at jlliew@flaherty-hood.com.

Thank you to everyone who attended the CGMC Fall Conference last week at Arrowwood Resort & Conference Center. More than 100 city leaders representing 50 cities attended the conference — setting an attendance record for the second straight year!

The conference kicked off Thursday afternoon with a presentation by Minnesota Management and Budget Commissioner Myron Frans, who shared insights into his past eight years as a member of Gov. Dayton’s administration and the ups and downs our state budget faced during that time. He also provided information on the state’s current economic outlook and what could be in store for the budget in the near future. You can read Frans’ presentation here.
 
Following Frans’ presentation, we delved into a panel discussion on the rural/urban divide and the role city leaders can play in helping to bridge the gaps between the various and diverse communities in Minnesota. Panelists included Ben Schierer, mayor of Fergus Falls; Suzanne Hilgert, mayor of Olivia; Peter Lindstrom, mayor of Falcon Heights, and Brad Tabke, former mayor of Shakopee and a newly elected state representative. The panelists shared examples of ways they have learned from leaders in other parts of the state and discussed the issues in which they wish there was better understanding between rural and urban communities. Conference attendees also participated in small group discussions where they brainstormed ideas on steps they can take within their cities to help bridge the rural/urban divide.
 
With the conference being held just a little over a week after the midterm elections, it would not have been complete with a good ‘ole CGMC election recap. CGMC Executive Director Bradley Peterson provided in-depth analysis of the 2018 election results — particularly the race for governor and the Minnesota House — and what they could mean for CGMC priorities and other issues in the upcoming legislative session. You can read Bradley’s presentation here.  
 
After the election analysis, we welcomed several legislators for a panel discussion on one of the most critical issues currently impacting Greater Minnesota: the child care shortage. Nicole Griensewic Mickelson, executive director of Region Nine Development Commission and president of the Greater Minnesota Partnership, moderated the discussion featuring Sen. Kent Eken (DFL-Twin Valley), Sen. Mark Johnson (R-East Grand Forks), Sen. Erik Simonson (DFL-Duluth) and Rep. Joe Schomacker (R-Luverne). You can watch video of the discussion here.
 
Annexation is another important topic explored at the conference. CGMC lobbyist Elizabeth Wefel informed attendees about some looming concerns, particularly the possibility that the CGMC and cities may need to play defense on legislation being proposed by township groups that could thwart cities’ ability to pursue annexations. You can read Elizabeth’s Power Point presentation here.
 
In the evening, attendees enjoyed a cocktail reception and dinner followed by an excellent presentation by Emmy-award winning reporter Tom Hauser of ABC 5 Eyewitness News. A veteran political reporter, Hauser shared his take on the national and state election results and some of the issues that could be on the horizon in the future.
 
Friday morning kicked off with a presentation/discussion led by Brandon Fitzsimmons, a labor and employment attorney with Flaherty & Hood, on how to effectively evaluate the performance of city administrators and managers. Waite Park City Administrator Shaunna Johnson and Mayor Rick Miller shared their stories on this issue and provided advice on how to help performance evaluations run smoothly. You can read Brandon’s Power Point presentation here.

In addition to speakers and presentations, the conference also included a membership meeting Friday morning during which members discussed and adopted the CGMC’s 2019 legislative policy positions. To review the adopted positions, click on the following subject areas:

Members also discussed the CGMC’s legislative priorities for 2019 and learned about our initial messaging and strategy plans for the upcoming legislative session.

Thanks again to everyone who attended our 2018 Fall Conference. We look forward to seeing you again at our next CGMC event – Legislative Action Day on Jan. 30 in St. Paul. We will send out registration information for Legislative Action Day soon!

Newly elected CGMC President Ron Johnson was recently featured in an article in Prairie Business, a monthly magazine that focuses on business and economic development issues pertaining to Minnesota, North Dakota and South Dakota.

In an interview with editor/reporter Tom Dennis, Johnson discussed his nearly two decades of service on the Bemidji City Council, his long-time involvement with the CGMC (including the fact that he has only missed one CGMC conference in 18 years!) and the important role the CGMC plays in keeping Greater Minnesota strong. Johnson also spoke at length about how many of the issues that the CGMC works on – such as LGA, child care and transportation – have a major impact on economic development and business growth in Greater Minnesota.

For Immediate Release
May 30, 2018
Contact: Julie Liew, jlliew@flaherty-hood.com
PDF version

Below is statement from CGMC President and Granite Falls Mayor Dave Smiglewski regarding the passage of the 2018 bonding bill.

“We are excited that Gov. Dayton has announced that he will sign the 2018 bonding bill into law. This bill includes critical funding for clean water infrastructure grant and loan programs, transportation projects, economic development initiatives, colleges and universities and other numerous projects that are important to Greater Minnesota cities.

“We would like to thank Sen. Senjem and Rep. Urdahl for crafting a balanced bonding bill that recognizes infrastructure needs across the state. We are grateful that our legislators and Gov. Dayton were able to put their differences aside and pass a bonding bill that funds vital projects, creates jobs and invests in a better future for our communities.

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The Coalition of Greater Minnesota Cities is a nonprofit, nonpartisan advocacy organization representing 97 cities outside of the Twin Cities metropolitan area. The Coalition educates legislators about issues important to Greater Minnesota. Visit the CGMC online at greatermncities.org and follow us on Twitter @greatermncities.

With mere hours to go until tonight’s midnight deadline, the Minnesota Legislature is hard at work trying to negotiate and pass a state budget and other key pieces of legislation. At this point it appears we are likely headed for a short special session to complete the state budget.

Legislators were holed up in St. Paul over the weekend and managed to pass a few budget bills out of the House and Senate, including the environment and jobs bills. A number of bills are still on the agenda for today including taxes, transportation and bonding.

Since most of the negotiations have been going on behind closed doors – leaving the public, the media and lobbyists out of the legislative process — we have little indication of what will be included in the final bills.

If you have not done so already, now would be an excellent time to respond to this CGMC Action Alert by contacting your legislators and Gov. Dayton to urge them to include a significant increase in Local Government Aid in the final tax bill.

The environmental bill is one of the few bills that passed on Sunday and is now expected to be signed into law by the Governor. Unfortunately, due to continuing opposition from the Governor and the Minnesota Pollution Control Agency, many of the significant environmental reforms sought by the CGMC were stripped from the final bill, including our call for independent peer review of proposed rules and a prohibition against the enforcement of unadopted rules. On the plus side, the bill includes our request to extend the public comment period for new city permits to 60 days (up from 30 days) and also includes some policy changes regarding the Impaired Waters List.

As for the jobs bills, which passed early this morning and is also expected to be signed by the Governor, it contains several priorities that are important to rural communities:

  • The Job Training Incentive Program is funded at $2.7 million per biennium for 218-19 and 2020-21
  • The Border-to-Border Broadband Broadband Development Grant Program is funded at $20 million
  • A workforce housing grant program within the Minnesota Housing Finance Authority will receive $4 million per biennium for 2018-19 and 2020-21
  • The Greater Minnesota Business Development Public Infrastructure program (BDPI) gets $1 million for the 2018-19 biennium (excluding a $1.6 million earmark in FY 18) and approximately $3.6 million for the 2020-21 biennium. The BDPI program is funded in the proposed bonding bill as well.
  • The Minnesota Investment Fund is funded at $25 million per biennium for 2018-19 and 2020-21
  • The Job Creation Fund receives $17 million for the 2018-19 biennium and $16 million for the 2020-21 biennium

For updates as this final day of session proceeds, please follow us on Twitter (@greatermncities), Facebook and our website (greatermncities.org.)

There are only a few weeks left in the legislative session, but lawmakers are still far from reaching agreements on top issues like LGA, bonding, transportation, workforce housing and environmental regulatory reform. It’s apparent that we need to make an extra push in these remaining days of session to demand that legislators take action to address the needs and concerns of Greater Minnesota communities. To relay this message, we are asking all Greater Minnesota city officials and community leaders to join us for a special CGMC Lobby Day and Ice cream on Thursday, May 11.

The tentative schedule for the day is as follows:

  • 10 a.m. – Legislative status update and messaging (Room 500 South in the State Office Building, located across the street from the State Capitol)
  • 11 a.m. – Press Conference on Greater Minnesota issues (State Capitol Press Conference Room B971)
  • Afternoon – Meetings with legislators (attendees should make appointments with their own legislators; we may also ask some attendees to participate in additional meetings with key legislators)
  • 2-3 p.m. – Ice cream social with legislators and legislative staff (tentatively scheduled to be held in the basement of the State Capitol)

Lobby Day is FREE to attend, but we ask that you RSVP to RSVP@flaherty-hood.com by Tuesday, May 9. Free parking is available at the Flaherty & Hood office located at 525 Park St. in St. Paul, just one block from the State Capitol.

We hope to get as many city officials to attend as possible! Please share this Lobby Day Flyer and encourage other city officials and staff to join us.

If you have any questions, please contact Julie Liew at jlliew@flaherty-hood.com or 651-259-1917.

The Legislature’s Easter/Passover break begins this weekend and lasts until April 18. Since many legislators head back to their home districts during the break, it is an ideal time to touch in with them and make your voices heard!

As the House and Senate prepare for conference committees and negotiations during the final seven weeks of the legislative session, it is critical that Greater Minnesota city leaders continue to speak up. Let your legislators know that CGMC priorities are important to your community and that you expect them to fight for these priorities to be included in the final deals.

Please take the following actions as soon as you can:

1. Pass a resolution urging the Legislature and Governor to return LGA to its 2002 level. See this sample resolution that you can customize to your own city’s circumstances. In addition to the decision-makers named at the bottom of the resolution, also send a copy to CGMC staff member Shane Zahrt at sazahrt@flaherty-hood.com. We will keep a running list of cities that pass a resolution.

2. Meet with your legislators. Call your senator’s and representative’s office this week to set up a meeting with them during the legislative break. If you are unable to meet in person, schedule a phone meeting instead. You can find contact info for your legislators here.  Please address the following topics during the meeting:

  • The Legislature and Governor must pass a tax bill this year that includes an LGA increase of $45.5 million. Despite significant growth in the state’s budget since 2002, LGA still lags behind. LGA plays an important role in restraining property taxes and helping cities provide important services to residents and businesses.
  • The Legislature and Governor must agree on a bonding bill that funds critical infrastructure across the state. With the failure to agree on a bonding bill last year, work on critical infrastructure has been stalled. The CGMC strongly supports $167 million for clean water infrastructure grant and loan programs, as well as $15 million for the Greater Minnesota Business Development Public Infrastructure (BDPI) Grant Program that helps pay for the public infrastructure needed for private business growth.
  • Fund city streets. The CGMC strongly supports $50 million in funding for city streets, with $25 million for cities with populations under 5,000 and $25 million for cities with populations over 5,000.
  • Pass at least $200 million a year in funding for the Corridors of Commerce program with cash as well as bond proceeds. Corridors of Commerce helps fund expansion of critical interregional corridors whose bottlenecks inhibit the flow of goods and services important to the economy of the whole state.

If you have any questions about these action items, CGMC priorities or the legislative session, please contact CGMC Executive Director Bradley Peterson at bmpeterson@flaherty-hood.com or 651-259-1911.