For Immediate Release                                                                                    
Contact: Julie Liew

Local Government Aid, child care, housing and water infrastructure among coalition’s top legislative priorities for 2021

 ST. PAUL—As the state continues to grapple with the COVID-19 pandemic and lawmakers begin to craft the next two-year state budget, Greater Minnesota city leaders are calling Governor Walz and the Legislature to focus on key priorities that will help set the stage for economic recovery.

“The pandemic has taken a toll on our community,” said Greg Zylka, mayor of Little Falls and president of the Coalition of Greater Minnesota Cities (CGMC), during a Zoom meeting with statewide media this morning. “Some segments are still really struggling, and that pain has ripple effects across the city. As mayor, it’s heartbreaking because you want to be there for everyone.”

Local governments are feeling the impacts, too. Since the start of the pandemic, many cities have undertaken efforts to assist residents and businesses by waiving fees, deferring property tax collections, altering land use restrictions to enable businesses to adhere to social distancing rules, and distributing federal coronavirus relief funds to businesses and families in need. On top of these extra measures, cities still need to provide essential services like public safety, street maintenance, drinking water and wastewater facilities, and parks and trails.

As cities continue to deal with the uncertainty of the pandemic, the CGMC is emphasizing that reliable Local Government Aid (LGA) funding from the state is more important than ever.

“The single most important thing the Legislature and Governor can do this year to help Greater Minnesota communities is ensure that LGA is paid on time and in full,” said CGMC Executive Director Bradley Peterson.

Peterson said city leaders were pleased to see that Governor Walz did not include any cuts to LGA in his budget recommendations unveiled earlier this week. However, with Minnesota facing a potential $1.3 billion deficit in the next biennium, Peterson said CGMC must continue to defend the LGA program and reiterate to legislators why any reductions in LGA would have an adverse effect on economic recovery.

For Zylka, whose city of Little Falls relies on LGA to make up about 40% of its general fund, any cut to the LGA program would be “devastating.”

“What would you do? What do you cut?” Zylka asked. “If the state were to cut LGA, the only way to remedy that without cutting services like police and fire is to tax the heck out of our communities. Our residents and businesses are hurting enough right now. Cutting LGA would be a huge setback in an already difficult time.”

Investments in child care, housing vital to economic recovery

In addition to continuing to defend LGA, the CGMC is urging the Legislature to invest in programs that will bolster economic recovery and allow more Minnesotans to get back to work. For Greater Minnesota cities, two of the biggest barriers to economic development are child care and housing.

“Even before COVID, the child care shortage was a significant impediment to economic growth in our city,” said Austin City Administrator Craig Clark. “The pandemic has made it even harder for child care providers to stay in business. In order for the economy to pick back up and our businesses to thrive, parents need to have reliable child care.”   

According to First Children’s Finance, Greater Minnesota was short 39,000 child care spots as of summer 2020. While more recent numbers are not yet available, the need is expected to grow even more as more parents return to the workforce.

The CGMC is advocating for several legislative proposals this session that aim to stabilize the child care industry through support services for providers and expand access by creating new child care businesses. It is seeking $20 million for grants to construct new or expand existing child care facilities in Greater Minnesota, as well as additional funding for Department of Employment and Economic Development child care grants and the Minnesota Initiative Foundations’ (MIF) child care initiatives.

Like child care, the housing shortage is a concern across Greater Minnesota, where the realities of the market make it difficult for developers to get the same profits that they can achieve by building in the metro area.

“As we try build back our economy and recruit new employers to our city, they want to be sure there is someplace for their workers to live,” Zylka said. “We are experiencing quite a housing shortage in our community.”

Despite a special tax abatement program and other local efforts, Clark said the city of Austin has long struggled to entice developers to build more housing for middle-income workers.

“In 2020, seven new single-family homes were built in Austin. We need at least 90 to replace our aging housing stock,” Clark said.

The CGMC is pursuing legislation to encourage construction and increase availability of housing across Greater Minnesota. Proposals include the creation a new grant program to help cities rehabilitate dilapidated homes, state funding for critical public infrastructure such as sewer lines and streets that are needed to build new housing developments, and additional funding for the existing Workforce Development Grant Program and policy changes to make the program work better for Greater Minnesota communities.

Despite historic investment in 2020, water infrastructure needs persist

The bonding bill passed by the Legislature last fall included a record $269 million for clean water infrastructure. However, state agencies have determined that more than $11 billion is needed over the next 20 years to fund drinking water and wastewater infrastructure projects statewide.

With interests rates still hovering near all-time lows, the CGMC is urging the Legislature to pass a bonding bill with at least $100 million for clean water infrastructure grant and loan programs administered by the Public Facilities Authority.

“Some legislators have balked at the idea of passing another bonding bill, but the truth is the need is so great that the state can’t afford not to fund more projects this year,” Peterson said. “If the Legislature fails to pass a bonding bill this year, it will only delay projects and drive up costs.”

Austin is among the cities who received funding in the 2020 bonding bill for engineering and design costs related to construction of a new wastewater treatment facility that is needed to replace aging infrastructure and comply with state water-quality regulations. This year, the city is seeking an additional $13 million to proceed with project, which is estimated to cost a total of $78 million.

“We are not shying away from our local costs, but our residents and businesses can only take on so much, especially as they deal with the fallout from COVID,” Clark said, noting that his city raised water rates 25% in 2018 and plan to raise them an additional 7% per year through 2023, for an eventual and total increase of 75%.

Little Falls is also in the midst of a $25 million project to build a new wastewater treatment facility, which is funded in part through $8 million in state grants that were included in the 2018 bonding bill. Zylka said that had the city not received state funding, it would have had to raise rates nearly 250% to pay for the project.

“Small cities simply can’t afford to do these projects without help from the state,” Zylka said. “We have fewer residents, and we don’t have the ability to pool resources with other communities like they can in the metro. Clean water is a necessity, and it benefits the entire state, so it is imperative that the state help cover some of the costs.”

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The Coalition of Greater Minnesota Cities is a nonprofit, nonpartisan advocacy organization representing cities outside of the Twin Cities metropolitan area. The Coalition educates legislators about issues important to Greater Minnesota. Visit the CGMC at greatermncities.org and follow us on Twitter @greatermncities.