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Aiding local communities

Published (3/28/2008)
By Courtney Blanchard
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A group of Minnesota mayors packed the House Property Tax Relief and Local Sales Tax Division meeting March 26 for “Local Government Aid Day.”

Six bills were presented, with testifiers questioning the fairness of how LGA is distributed. Many suggested rerouting aid to certain cities, and a few proposed to overhaul the entire LGA system.

HF3756, sponsored by Division Chairman Rep. Paul Marquart (DFL-Dilworth), would inject $90 million more into the system and change how the money is divvied out to communities.

Dubbed the “unity bill,” because it was negotiated by mayors, city officials and Minnesota city coalitions from across the state, Marquart compared their mission to that of Dorothy in “The Wizard of Oz.”

“Wasn’t it the wizard who told Dorothy to go out and find the ruby red slipper and then come back and he would send her home?” Marquart said. “He didn’t expect she would get that ruby red slipper.”

The bill, laid over for possible inclusion in the division’s omnibus bill, would:

• replace current “regional center aid” with a “jobs-based aid” and double city aid for communities with less than 5,000 people;

• freeze the aid received in 2009 for subsequent years, with inflation factored into the mix;

• create one formula to calculate LGA that applies to every community in the program; and

• require a study group comprised of legislators and city officials to analyze the program and recommend changes.

Marquart insisted that increasing LGA would provide property tax relief to homeowners, because cities can pay for services with LGA instead of property taxes.

Not everybody seemed pleased by the proposal. Rep. Sarah Anderson (R-Plymouth) said her city doesn’t receive LGA in the first place, so they would reap no benefits from the bill, and Rep. Ron Erhardt (R-Edina) asked where the Legislature could find $90 million in the midst of a deficit year.

Testifiers from one city in particular objected to the bill. Elk River would lose most of its LGA, or nearly $600,000.

Sen. Rod Skoe (DFL-Clearbrook), who chairs the Senate Property Taxes Division, sponsors the companion bill, SF3234, which has been laid over for possible omnibus bill inclusion by his division.

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