Category archives
State budget

For Immediate Release
Contact: Julie Liew, jlliew@flaherty-hood.com

Below is statement from CGMC President and Bemidji City Council Member Ron Johnson regarding today’s announcement that Minnesota’s budget surplus has increased to $1.5 billion:

“With the state clearly on solid financial footing, I’m hopeful that Governor-elect Walz and the new Legislature will seize this opportunity to strengthen communities across the state by increasing Local Government Aid. City leaders in Greater Minnesota were encouraged that Walz frequently campaigned on the idea of boosting LGA, and this new budget forecast will allow him to make good on that promise.

“The CGMC’s top priority for the upcoming legislative session is a $30.5 million LGA increase, which is the amount needed to bring the program back up to its 2002 high-water mark. LGA is the most important state program to help cities restrain property taxes and afford essential services like public safety, libraries and snow removal. As city officials, we try our best to craft responsible budgets, but it has been a struggle in recent years as LGA funding has failed to keep pace with rising costs. We are eager to work with Walz and the new Legislature to make an LGA increase a reality this session.”

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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.

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!

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.

The November budget forecast released this week by Minnesota Management and Budget (MMB) shows a small deficit in the current biennium ($188 million for FY 2018-19) and a larger deficit for the following biennium ($586 million for FY 2020-21). In addition, MMB does not include the cost of inflation in its long-term forecasts; it estimates the cost of inflation for FY 2020-21 to be approximately $1.3 billion.

There are significant unknowns at the federal level, including whether tax reform or funding for the Children’s Health Insurance Program (CHIP) will pass, and whether the economy continues its historic expansion. The state’s previous February forecast included assumptions regarding federal legislation that were overly positive ‒ and was higher than the average of 50 other forecasts. This newest November forecast changed those assumptions.

House Speaker Kurt Daudt (R-Crown) indicated that changes in this November forecast were made for political purposes. Senate Majority Leader Paul Gazelka (R-Nisswa) called the report “obsolete on arrival” due to the pending actions at the federal level. Gov. Dayton urged caution and noted that he would not use any budget reserves for what, in his opinion, could be solved with sound budgeting this session.

On Tuesday, Gov. Dayton announced he would sign all of the budget bills passed by the Legislature, as well as the bonding and tax bills. Nonetheless, significant controversy continues. Here’s a play-by-play of the final days of the special session, including the CGMC perspective on what may come:

Special session marked by frustration
Before the Legislature had even sent Gov. Dayton all of its budget bills, loud protests rang through the Capitol urging the Governor to “veto everything.” Activists were angered by the perception that Republican leadership in the Legislature had sneaked controversial provisions into a number of bills after reaching an agreement with Gov. Dayton.

Late in the week, it seemed that the tax bill (which includes a $15 million LGA increase) was a possible veto target. Gov. Dayton and other Democrats, including Senate Minority Leader Tom Bakk, expressed concern over the high cost of the GOP’s tax bill, which comes in at $650 million in the first biennium and grows substantially thereafter. Sen. Bakk urged Gov. Dayton to veto the bill to avoid future deficits.

Legislature tries to tie Dayton’s hands
To pressure Gov. Dayton into signing the tax bill, legislators inserted a provision into a state government funding bill without the Governor’s knowledge. The provision would have withheld all funding for the operation of the Department of Revenue unless Gov. Dayton signed the tax bill. On Tuesday, House Speaker Kurt Daudt acknowledged to reporters the provision was placed in the bill behind Gov. Dayton’s back. When asked if the Governor knew about the provision in advance, Speaker Daudt replied, “He found it eventually.”

Dayton signs budget bills, but responds with his own maneuvers
In response to the Legislature’s maneuver, Gov. Dayton wrote to leaders, “I consider this provision … to be a reprehensible sneak attack, which shatters whatever trust we achieved.” Angered by the perceived slight, Gov. Dayton signed all of the budget bills, but used his line-item veto power to strike any new funding for the operation of the Legislature itself. Gov. Dayton indicated that vetoing the Legislature’s funding was a move to bring legislators back to the negotiating table. Arguing they had not negotiated in good faith, the Governor wants to re-open negotiations on items in the tax bill including tax freezes on cigarettes and the state commercial/industrial property tax.

Rather than return to the negotiating table, the Legislature is likely to sue the Governor on constitutional grounds. The courts will be asked to determine whether the Governor in fact has the authority to use his veto pen to eliminate funding for another, co-equal branch of government.
 
The CGMC perspective
Regardless of how the controversy plays out, provisions in the tax bill that benefit CGMC members cities, such as the $15 million LGA increase and LGA formula fixes, are not likely to be impacted. A lawsuit between branches of government would be on the narrow issue of the Legislature’s funding. In the unlikely scenario that negotiations do restart, they will likely be limited to just a few controversial items. The CGMC will continue to monitor developments.

Final outcome of CGMC priorities
For a brief overview of how the CGMC’s top legislative priorities fared this session, please see this 2017 Outcomes Chart.

The House and Senate, purportedly in agreement with Gov. Dayton, passed a tax bill today that comes in around $648 million for the 2018-19 biennium. The bill includes a permanent $15 million increase in Local Government Aid. To see a preliminary estimate of how your city will do with this increase, click HERE for the CGMC’s updated LGA run.

We want to extend a sincere THANK YOU to everyone who responded to our numerous Action Alerts by contacting your legislators and the Governor about the need for an increase in LGA funding. We were hoping for a larger increase, and we will continue the fight, but it was thanks to your help that this final number is higher than previous proposals from both the House and Senate.
 
Here are links to the SPREADSHEET and BILL LANGUAGE for the tax bill.

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.)

For Immediate Release: Feb. 28, 2017
Contact: Julie Liew, jlliew@flaherty-hood.com

Below is statement from CGMC President and Alexandria Mayor Sara Carlson regarding this morning’s announcement that the state’s budget surplus has increased to $1.65 billion.

“With this new budget forecast, the Legislature and Governor have no excuses for not passing a $45.5 million increase in Local Government Aid this year. The state’s economy is clearly flourishing and there is strong bipartisan support for an LGA increase, so it’s a no-brainer that this is the year to make it happen.

“LGA is the single most important state program to help communities hold down property taxes and pay for key city services that affect all of our residents and businesses. The CGMC’s top priority this legislative session is bringing LGA funding back up to its 2002 benchmark. A modest increase of $45.5 million will get us there. With today’s budget announcement there is no reason why our rural legislators can’t use their influence to make this LGA increase happen this session.”

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On Wednesday, the Senate Taxes Committee heard testimony on the $300 million tax plan Governor Dayton proposed last month. The broad-ranging proposal includes a $20 million increase in LGA.  While a $20 million increase would be a step in the right direction, the CGMC’s top priority continues to be restoring LGA to its 2002 funding level, which would require an increase of $45.5 million.

CGMC lobbyist Bradley Peterson testified in front of the committee. Peterson thanked the Governor and legislators for recognizing the vital role LGA plays in allowing cities to provide essential services like fire and police, and helping to hold down local property taxes. However, he made clear to the committee that the conversation on LGA increases should begin at $45.5 million, not at $20 million. He urged the senators to support legislation proposed by Sen. Bill Weber (R-Luverne) that would fully restore LGA to its 2002 level over the course of two years. Weber’s bill, SF 476, has been referred to the Senate Taxes Committee. The House version of the legislation, HF 672, was introduced by Rep. Paul Anderson (R-Starbuck), with broad, bi-partisan support.
 
The CGMC will continue to advocate for a substantial increase in LGA funding, and will make clear to the Legislature that the 2017 session cannot be considered a success unless they pass a comprehensive tax bill that includes additional LGA funds.