Local Government Aid (LGA) was the focus of a hearing in the House Local and Property Tax Division on Monday. The CGMC’s two LGA bills, HF 1101 and HF 1102 were on the agenda. Both bills increase the LGA appropriation by $30.5 million and make updates to the formula multipliers. HF 1101 would also peg the LGA appropriation to inflation and population growth so that the appropriation continues to grow over time.
Rep. Dave Lislegard (DFL-Aurora) is the chief author of HF 1102 and spoke to the important role LGA plays in addressing inequities in property tax wealth across Minnesota and how the CGMC’s proposal would improve the long-term stability of the program. He drew on his experience as the former mayor of Aurora and a long-time city councilor. Rep. Lislegard was joined by Eveleth City Councilor Brad Hadrava who told legislators about the rising constructions costs the city faces and how increased LGA will help the city continue its efforts to preserve aging public buildings and address the need for capital improvements.
HF 1101 is sponsored by Rep. Jeff Brand (DFL-St. Peter). At the hearing, he discussed his experience as a city councilor in St. Peter, telling his colleagues that St. Peter used a small increase in LGA to purchase a new tire balancer for the public works department, but that in order for the city to address critical needs funding for LGA must be restored. CGMC Executive Director Bradley Peterson testified on the annual inflation and population adjustment contained in HF 1101, citing increases in health insurance costs, population growth and an overall steady rise in city costs to underscore the need for LGA to keep pace with inflation.
The division approved both CGMC bills for consideration in a later division report that will be included in the House’s final omnibus tax bill. The two bills were among five before the division that would increase the LGA appropriation by $30.5 million. The division also heard from the Department of Revenue about the restoration of LGA funding in Gov. Walz’s proposed budget. You can listen to the full Division hearing by clicking this link.