The House omnibus tax bill (HF 848 – Davids) has passed out of the House Tax Committee and is awaiting action by the Ways and Means Committee before heading to the floor for final passage by the full House of Representatives, likely early next week.
The bill still includes the arbitrary and unjustified reduction in LGA for Minneapolis, St. Paul and Duluth (a CGMC member). As noted in last week’s CGMC in Brief, the CGMC has always opposed these types of arbitrary cuts as they weaken confidence in the analytical underpinnings of the LGA program. Moreover, with a $2 billion surplus, the House tax bill should be increasing LGA, not cutting it for any city or undermining the program. As CGMC President Heidi Omerza’s letter to all House members indicates, the House GOP’s insistence on this course of action is very distressing for the long term viability of the program.
Attached to Council Member Omerza’s letter was this write-up dispelling some of the top LGA “myths.” Sadly, this discussion at the legislature has been dominated by a fair amount of misinformation about the “original intent” of LGA.
Despite efforts made by CGMC lobbyists and members, rural Republican House members seem content that either they are doing the right thing or that there is nothing that they can do convince their caucus to change direction. Many seem to be placing their faith in the idea that LGA will turn out alright in the end after conference committee negotiations with the Senate. Unfortunately, our belief is that the House position (in addition to being bad policy) undercuts the likelihood that conference committee negotiations will result in any increase in LGA. Since the House plan to reduce LGA for Minneapolis, St. Paul and Duluth takes $85 million out of the program, it would cost a significant amount of money just to restore funding to the three impacted cities, let alone to then provide an increase.
The CGMC Board of Directors met via conference call this afternoon and discussed supporting a floor amendment in the House to restore the LGA program cuts to the three first class cities and to implement the bi-partisan LGA increase bill that was carried by Rep. Paul Anderson (R-Starbuck).
For a complete comparison of LGA for your city under current law, the House omnibus tax Bill (HF 848), and the Anderson LGA increase bill (HF 685), please consult this run generated by the House Research Department.