Senator Dan Sparks: Partnerships between Local and State Government are a Win-Win
We are already entering the third month of the 2019 Legislative Session, and my colleagues and I at the legislature are getting into the nitty-gritty of building a budget for Minnesota. The first deadline for hearing bills in committee is quickly approaching, and the May 20 adjournment date will be here before we know it.
The state budget will broadly reflect the shared values and priorities we have as Minnesotans. The big-ticket items like education, health care, and infrastructure will be a major focus of discussion, and the final budget will support a wide variety of programs, services, and various state agencies. However, the budget is not the only way for major projects and communities to get assistance or state support.
One asset available for local towns and cities is the Minnesota Public Facilities Authority (PFA). The PFA provides financing and technical assistance to help communities build public infrastructure that protects public health and the environment and promotes economic growth. They administer and oversee the financial management of three revolving loan funds and other programs that help local units of government construct facilities for clean water, drinking water, and transportation infrastructure projects.
The PFA can play a major role in helping local governments finance vital water and transportation infrastructure projects. As these types of infrastructure age, improving or replacing them can be major costs that are difficult for local governments to pay without raising local property taxes or making cuts to essential city services. Instead of passing these costs on, the PFA can work with communities to provide financing for these projects.
An example of this cooperation happened very recently for Albert Lea. The city applied for a combination of grants and loans from the PFA to help finance the extension of municipal drinking water and sanitary sewer service to Stables. Together, the assistance from the PFA totaled approximately $3,449,717 in assistance, which will not only reduce the immediate cost burden for the city, but also cut down on the long-term costs. The terms of the PFA loans will save the city approximately $355,657 compared to market rate loans.
Every dollar saved by a local government can play major dividends in local budgets. Now, Albert Lea will have more flexibility in crafting a budget without relying on raising property taxes or cutting other services, opening new opportunities. This is a great deal for taxpayers and is an example of how state resources can be leveraged to support critical projects for our local communities. This is a win-win for everyone.
This column was first published in the Albert Lea Tribune.