LGA Phase-Out Unwarranted and Unfair
Senator Roger Reinert voiced strong opposition to action taken in Tax Conference Committee last night that would eliminate Local Government Aid for Duluth, Minneapolis, and St. Paul.
One of the last motions, in a committee meeting that lasted until midnight on Thursday, was to accept the House provision to phase out LGA payments to cities of the first class as of 2008. Rochester, which is represented by Republicans in the Senate and currently classified as a city of the first class, was excluded from this aid reduction.
“I am disappointed that the conference committee moved to the House position versus the Senate,” said Senator Reinert. “Although the Senate bill included reductions to LGA, it was still a better – and more reasonable – bill.”
The House provision would allocate 75% of the base aid to Duluth, Minneapolis, and St. Paul in 2011; remaining cities would receive their LGA payments amount at the same level as in 2010. Then in 2012, Duluth, Minneapolis and St. Paul would only get 50% of their base aid, while the remaining cities would receive 100% of the base aid. The reductions would continue in 2013, and in 2014 Duluth, Minneapolis and St. Paul would get no LGA at all.
Currently, Duluth receives $26,200,000 in LGA from the State of Minnesota. This is a reduction of nearly $4.0M from a highpoint in 2002. LGA currently comprises just over 1/3 of the City of Duluth’s General Fund. Local government aid is intended for older cities in the state with aging infrastructure, cities that have had a decline in property tax base, and regional centers. Duluth falls into all three categories.
“This is a purely partisan attack. The only reason these three cities are being targeted, and Rochester exempted, is party politics” said Senator Reinert. “Like Duluth, Minneapolis and St. Paul provide a variety of services to neighboring communities and residents. Local government aid is the primary way the state recognizes, and reimburses this extra burden.”