The Coalition of Greater Minnesota Cities released the following statement to the press this morning: 

St. Paul, Minn.—Having endured repeated cuts in state aids to local governments, mayors released a proposal today that would reduce funding cuts for the Local Government Aid (LGA) and Market Value Credit (MVC) programs to their 2009 levels. Cities emphasized that this approach will inject much needed stability into their budgets and help them better maintain essential services—such as police, safe roads, libraries, and parks—without resorting to deep service cuts or unsustainable property tax increases in 2010.

“Because of the continued cuts to cities, police forces are reducing their ranks, streets are crumbling, and libraries are open fewer days of the week. At the same time, property tax increases are over-burdening families and businesses. It’s time to put all budget-balancing tools—including revenue—on the table so that we can find a long-term solution to this problem,” Cloquet Mayor Bruce Ahlgren said.

Ahlgren cited statistics that show LGA is 2.9 percent of the state’s budget, yet are charged with shouldering up 16 percent of the governor’s unallotment solutions in 2010, excluding the school funding delay.

“Targeting cities again and again for deep cuts may help balance the state’s books at the end of the day, but at what price? If cities can’t provide the services and property tax affordability that attract young families and new businesses, then these cuts will only worsen the economic outlook for the state. Something needs to be done now to make sure our communities stay strong,” Ahlgren added.

The Coalition of Greater Minnesota Cities (CGMC) prepared the Minnesota Community Stabilization Act in order to alleviate the disproportionate cuts handed down to cities. The bill freezes the 2010 LGA/MVC unallotment to the 2009 level through the following provisions:

  • The bill creates an additional $60 million in revenue generated by expanding the state sales tax to non-essential personal care services—such as facials, manicures, tattoos, and body piercings—and to digital downloads
  • The bill will not tax haircuts
  • The bill will not add to the state’s current deficit
  • The bill prevents any further unallotment of 2010 (FY 2011) LGA/MVC payments

 “This is a moderate approach that should receive bipartisan support across the state,” said Sen Rod Skoe (DFL-Clearbrook), author of the Senate bill. “Partisan gridlock is crippling the state and its time for a new approach to save the programs we care about in our local communities.”

 Rep. Dave Olin (DFL-Thief River Falls), author of the bill in the House, echoed Sen. Skoe’s sentiments. “Cuts in LGA have left cities struggling to provide essential services,” Rep. Olin said. “This bill will provide much needed stability for cities and their taxpayers.”

 CGMC plans to gather bipartisan support for the bill prior to its introduction.