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LGA

For Immediate Release
Contact: Julie Liew, jlliew@flaherty-hood.com
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With first Greater Minnesota governor in decades, city leaders see major opportunity with Walz Administration

ALEXANDRIA, MINN.—For the first time in more than three decades, Minnesotans have elected a governor who resides in Greater Minnesota. With Governor-elect Tim Walz’s outstate roots and campaign-trail focus on uniting rural and urban interests into “One Minnesota,” rural city leaders are optimistic that the upcoming legislative session will see a renewed emphasis on advancing Greater Minnesota priorities.

“It’s no secret that a strong Greater Minnesota strengthens the entire state,” said Audrey Nelsen, a member of the Willmar City Council and vice president of the Coalition of Greater Minnesota Cities (CGMC). “Tim Walz didn’t shy away from that message on the campaign trail. As city leaders and residents of Greater Minnesota, it is our job to make sure he doesn’t lose that focus when he takes office.”

That message reverberated this week as more than 100 mayors, city councilors and city staffers from across Greater Minnesota convened in Alexandria for the CGMC’s annual two-day fall conference. At the event, CGMC members adopted the organization’s policy positions and discussed priorities for the 2019 legislative session, including securing an increase in Local Government Aid (LGA), funding for wastewater infrastructure and finding solutions to the state’s child care shortage. They also emphasized the need to work closely with Walz and the Legislature to ensure that Greater Minnesota has a seat at the table when it comes to crafting the state budget and other legislative priorities.

While the 2018 election appeared to highlight Minnesota’s so-called rural/urban divide—with rural areas continuing to lean heavily Republican and Democrats picking up 16 seats in the suburbs and strengthening their hold on the urban core—many city leaders say talk of the divide is overblown.

“Everyone is sick of the divisiveness,” Nelsen said. “There are so many issues that matter to all Minnesotans, not everything has to be red versus blue. We all need safe roads, clean water and good jobs. There is plenty of common ground to be found if our state lawmakers are willing to look for it.”

For CGMC members, the main issue in which they hope Walz, the GOP-led Senate and the DFL-led House can come to agreement is on a boost in Local Government Aid (LGA). With the tax bill slated to be one of the main items on the agenda when the Legislature convenes in January, the CGMC is seeking a $30.5 million LGA increase, the amount needed to bring the program back to its 2002 level. Because the costs for cities continue to rise each year, the organization is also seeking to add a permanent annual inflationary increase for LGA into law.

“There is probably no single issue that embodies the concept of ‘One Minnesota’ as clearly as Local Government Aid,” said Bradley Peterson, executive director of the CGMC. “The exact purpose of the program is to level the playing field to make sure that all communities can provide essential services and quality-of-life amenities regardless of their wealth.”

CGMC members have reason to be optimistic about the prospects of an LGA increase this year. Walz repeatedly affirmed his support for bolstering the program during the gubernatorial race, and there is strong bipartisan support for LGA among rural, urban and suburban legislators alike.

“LGA is a great example of a program that bridges the divide between large cities like St. Paul and small ones like St. Charles,” Nelsen said. “If the push for ‘One Minnesota’ is going to work, Governor Walz and the Legislature will have to look for issues like LGA where they can put politics aside and work together to improve our communities and state.”

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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 on Twitter @greatermncities.

Registration is now open for the CGMC Fall Conference! The conference will be held Nov.15-16, 2018 at Arrowwood Resort & Conference Center in Alexandria and will feature presentations, discussions and speakers on a number of important topics. The packed agenda includes:

  • Luncheon presentation by Myron Frans, commissioner of Minnesota Management and Budget
  • Keynote dinner featuring Tom Hauser, chief political reporter for ABC5 Eyewitness News
  • Legislative panel discussion on child care
  • 2018 election recap and analysis
  • A discussion featuring Greater MN and metro-area elected officials who are working to bridge the rural/urban divide
  • Presentation on annexation and why could be a significant issue in the next legislative session
  • Full membership meeting to discuss and adopt the CGMC’s policy positions and priorities for the upcoming legislative (it’s critical that your city lend its voice to this discussion!)
  • …and more!

CONFERENCE DETAILS
See this CONFERENCE AGENDA & VENUE INFORMATION for full details.

REGISTER TODAY!
Please register online at greatermncities.org/FallConf18. The deadline to register is Nov. 7. 

HOTEL INFORMATION
* Please note that attendees are responsible for their own hotel reservations.*

Arrowwood has a block of rooms reserved for CGMC Fall Conference attendees at a discounted rate of $94 (plus tax). Call Arrowwood at 320-762-1124 by Nov. 1 to book a room under the CGMC’s block.

Note: There are plenty of rooms available at Arrowwood on the night of Nov. 15, but only a limited number of rooms are available on Nov. 14 (the night before the conference). In order to accommodate those who wish to come to Alexandria on Nov. 14 (and may be unable to stay at Arrowwood), we have reserved a small block of rooms for the CGMC at Hampton Inn & Suites in Alexandria. The cost is also $94. Call Hampton Inn at 320-763-3360 by Oct. 29 to make a reservation (rooms are available both Nov. 14 and Nov. 15).

QUESTIONS?
If you have any questions about the conference, please contact Julie Liew at jlliew@flaherty-hood.com or (651) 259-1917.

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.

A proposal to add a new amendment to the Minnesota Constitution that would re-direct approximately $300 million a year from the state’s general fund to transportation is still alive at the Legislature. A bill that would put the amendment on the ballot this November is being voted on in the House today, where is it expected to pass. That means our best hope of defeating this harmful amendment now lies in the Senate.

Take action now!
Contact your senator, Senate Majority Leader Paul Gazelka and Senate Minority Leader Tom Bakk as soon as possible and urge them to oppose the proposed constitutional amendment.

Tell them that:

  • By re-directing and dedicating general fund dollars, this amendment poses a serious threat to other important priorities such as Local Government Aid, education and elder care.
  • This amendment would jeopardize the stability of the state budget.
  • Measures that pit schools and public safety against roads and bridges should not be put up for a vote, especially when there are other viable options to increase funding for transportation, such as raising the gas tax or license tab fees.

Contact info

Questions? If you have any questions about the proposed constitutional amendment, please contact Bradley Peterson at bmpeterson@flaherty-hood.com or (651) 259-1911.

Below is a guest column written by Dave Smiglewski, president of the CGMC and mayor of Granite Falls, and Todd Holthaus, president of the Board of Directors of the Minnesota Rural Education Association and superintendent of Hills-Beaver Creek Schools.

Do Minnesotans value roads and bridges more than schools and public safety?

While that exact question won’t be on the ballot, there is a very real possibility that Minnesotans will have to ponder that query when they head into voting booth in November.

A proposal making its way through the Minnesota House and Senate would ask voters to change the State Constitution to permanently dedicate the revenue attributable to the sales tax on auto parts to roads and bridges.

These funds, almost $300 million per year, currently go to the state’s general fund — the same pool of money that supports things like schools and Local Government Aid (LGA).

Make no mistake about it, Minnesota’s roads and bridges need help. However, diverting money away from the general fund will either cause pain to other important state programs or require the state to raise taxes to make up the shortfall. That is why we urge legislators and the public to reject this proposed constitutional amendment.

As rural leaders, we are especially concerned about the potential impact this diversion of funds would have on Greater Minnesota.

Rural schools are particularly reliant on the state’s per-pupil formula. With significantly less in household income and property tax base than the metro area, it is much harder for rural schools to fill the gap if state funding fails to keep up. When times are good, education tends to see inflationary increases. When the general fund is in trouble, education funding is often held flat, causing our schools fall behind.

Likewise, rural Minnesota cities are especially dependent on LGA, which helps cities with less property tax base provide services such as police and fire protection, infrastructure, parks and libraries — all critical to having a safe and thriving community.

When the general fund suffers, LGA is among the first items on the chopping block. As we have seen in the recent past, property taxes go up, service levels go down and rural communities suffer when LGA is sacrificed due to state budget cuts.

The threat to our rural schools and cities is more than theoretical. During a hearing in the Senate Transportation Committee, Sen. Scott Newman, one of the chief authors of the amendment, acknowledged that LGA and education are typically the first budget items cut by the Legislature when there is an economic downtown.

Going to voters for a constitutional amendment may seem like an attractive way to get dedicated funding for transportation, but amendment proponents need to be honest about its real cost. The $300 million this amendment would divert from the general fund is not free money; it is coming from other places in state government.

Measures that pit schools and public safety against roads and bridges should not be put up for a vote, especially when there are other viable options to increase funding for transportation, such as raising the gas tax or license tab fees.

This amendment would put many important priorities at risk. Ask your legislators to vote “no” on the proposed constitutional amendment.

A proposal to have Minnesotans vote on a constitutional amendment to dedicate the portion of the sales tax attributable to revenue on auto parts continues to march along, especially in the House. The proposed amendment had hearings in the House Tax Committee and Ways and Means Committee this week and is poised for action on the floor whenever House leadership decides the time is right.

The progress on the Senate side is more complicated, with Senate Majority Leader Paul Gazelka (R-Nisswa) acknowledging in an MPR story that they may not have the votes, especially if no Democrats are willing to vote for the bill. The measure is currently awaiting action in the Senate Tax Committee, where it has been languishing for weeks. Sen. Roger Chamberlain (R-Lino Lakes), chair of the committee, is rumored to be opposed to the amendment.

During a meeting on Tuesday, the CGMC Board of Directors affirmed its opposition to the amendment because of the negative impact it would have on the state’s general fund and the threat that poses to the LGA program. When fully phased in, it is estimated that the amendment could sequester up to $300 million a year for roads and bridges that currently goes into the general fund. For context, that is more than half of the entire yearly appropriation to LGA.

The CGMC continues to oppose the amendment despite the inclusion of dedicated money for the small-city streets program (approximately $12.5 million a year once fully phased in) because the risk to the general fund is greater than the benefits that the amendment may bring.

Even before Minnesotans get a chance to vote on the amendment (should it pass the Legislature), the state’s surplus will likely be completely spent by this Legislature when you factor in the costs of this year’s efforts on tax conformity, the supplemental budget bill, the pension bill and tax cuts from last year’s tax bill.

Stay tuned for more developments and potential action alerts on this issue as the session comes to a close.

There are only five weeks left in the 2018 legislative session and the Minnesota Senate has yet to hold a hearing on SF 3082, the CGMC-supported bill to increase LGA funding by $30.5 million to help cities keep up with rising costs and hold down property taxes. The House companion bill, HF 3493, received a committee hearing last week, but so far the Senate has ignored LGA by not hearing any bills that would increase it. It’s time to tell the Senate to step up!

Take action now!

Contact your senator, Senate Tax Committee Chair Roger Chamberlain and Senate Majority Leader Paul Gazelka as soon as possible and urge them to hold a hearing on SF 3082 and increase LGA funding this session.

Tell them that:

  • Any meaningful tax bill must include an increase in LGA—the most effective tool the state has for building strong communities in Greater Minnesota.
  • You and your community are counting on the Legislature to pass a $30.5 million LGA increase this session to finally restore the program to its 2002 level.
  • Last year’s $15 million LGA increase was helpful in allowing many cities to hold down property tax levies and address long-delayed investments. However, the cost to cities to provide services continues to rise due to inflation and other factors.
  • Tell your story of the impact LGA has on your community! Share examples of how your city uses its LGA and how your city might utilize an increase.

Contact info

Questions?

If you have any questions about LGA or the legislative session, please contact Bradley Peterson at bmpeterson@flaherty-hood.com or 651-259-1911.

As has become recent tradition for the CGMC, we will be holding an end-of-session lobby day and ice cream social to make a final push for our top priorities in the waning days of the legislative session. The event, which will be held in St. Paul on Wednesday, May 9, will give Greater Minnesota city officials and other community leaders a chance to meet with legislators and demand that they pass bills that address CGMC priorities such as LGA, wastewater infrastructure and child care.

The tentative schedule for the day is as follows:

  • 10:30 a.m. – Legislative update and messaging (Room 500 North in the State Office Building, located across the street from the State Capitol)
  • 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 (L’etoile du Nord Vault Room in the Basement of the State Capitol)

Lobby Day is FREE to attend, but we ask that you register at greatermncities.org/IceCream2018 by Monday, May 7 so that we can coordinate meetings. Free parking is available at the Flaherty & Hood office located at 525 Park St. in St. Paul, just one block from the State Capitol, as long as you print off this parking pass (which is good only for May 9) and put it on your dashboard.

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.

Members of the House of Representatives are advancing a bill that would penalize cities that receive LGA and also collect a Local Option Sales Tax. HF 3830, chief authored by Rep. Cal Bahr (R-East Bethel), would reduce a city’s LGA by the amount of funds that it collects under a Local Option Sales Tax approved by the city’s voters and authorized by the Legislature.

This bill will be heard on Wednesday, April 11 by the House Property Tax and Local Government Finance Division, chaired by Rep. Steve Drazkowski. We need your voice to push back against this dangerous bill!

Take action today!

It is critical that CGMC city leaders call or e-mail bill author Rep. Cal Bahr and Committee Chair Rep. Steve Drazkowski, as well as Speaker of the House Kurt Daudt and your own House member. Tell them to oppose HF 3830.

Let them know that:

  • This bill harms rural Minnesota, where the majority of cities that collect local sales taxes are located.
  • Local Option Sales Taxes are approved by voters and can only be spent on specific purposes that are authorized by the Legislature. They do not go to fund a city’s general operations or to provide services like fire, police or parks like LGA does.
  • This bill’s LGA cuts would directly result in property tax increases or cuts to city services.
  • The bill disproportionately punishes cities that need LGA the most. Wealthy cities that receive little or no LGA could continue to collect a Local Option Sales Tax without the same consequences.

Contact Information

For more legislators’ contact information, visit:


Need more information?

For more information, please contact CGMC Executive Director Bradley Peterson atBMPeterson@flaherty-hood.com or CGMC lobbyist Shane Zahrt at SAZahrt@flaherty-hood.com.

Two recently introduced bills seek to reduce – or eliminate – Local Government Aid (LGA) based on sales tax revenue. The first, HF 3830 (authored by Rep. Cal Bahr, R-East Bethel) reduces a city’s LGA over time based on their local sales tax. As cities know, local option sales taxes are not a substitute for LGA since they are dedicated to specific capital projects, while LGA is used for general operations, investments and restraining property taxes.

The second LGA bill, HF3892/SF 3518 (authored by Rep. Jerry Hertaus, R-Greenfield and Sen. Mark Koran, R-North Branch), would eliminate the LGA and fiscal disparity program and re-direct sales taxes to cities and school districts. Specifically, the revenue raised by a sales tax of 1 percent on all sales goes to a new school/municipal trust account. Every city qualifies for aid, but a city’s aid would be determined by a county’s share (the amount needed to make payments multiplied by how much sales tax revenue the county contributes) multiplied by the city’s population. The higher the population and sales tax revenue, the more aid a city would receive – more than likely benefiting populous metro cities.

The CGMC will continue to monitor these bills and others to ensure that Greater Minnesota cities can rely upon a strong LGA program into the future. If you have any questions about LGA issues, please contact Bradley Peterson at bmpeterson@flaherty-hood.com.