Third of three articles
The published policy outlines and public statements of the Mark Dayton, Tom Emmer and Tom Horner campaigns on the matters of Local Government Aid, county aid and “redesign of government” offer another glimpse of the major philosophical differences of the three gubernatorial candidates.
Mark Dayton’s views
Dayton says if he becomes governor, he will restore the LGA cuts made by Gov. Tim Pawlenty and the Legislature in the 2012-13 budget cycle; by raising taxes, Dayton says he would be able to do that.
Dayton recently told the League of Minnesota Cities in an interview: “It’s my commitment to protect local government aid and continue that funding and have it provided reliably.”
As recent trends have shown, LGA reduction bears a direct correlation to an increase in property taxes as local units of government seek ways to recoup their state-funding losses. Dayton calls those property tax hikes “the most unfair tax.”
Tom Horner’s views
Horner speaks of reworking the complex LGA formula and completely eliminating county aid; according to his campaign, he wants to “connect the unit of government taxing the service to the unit delivering it.” Counties would need to scramble for funding under a Gov. Horner.
Much of Horner’s local and county aid policies are driven by his running mate, Jim Mulder, the former executive director of the Association of Minnesota Counties.
To plug in for lost aid, Horner has proposed a few tax remedies for cities and counties.
Tom Emmer’s views
If Emmer is elected, his austere proposed budget would cut $1.1 billion from “aids and credits,” much of that to local units of government. He is emphatic that LGA go only for “core services,” such as police and fire services, and water and sewer infrastructure. His campaign has scoffed at the use of some LGA funds for non-essentials.
(Horner has also said LGA funding should be limited to those so-called core services.)
Emmer said of LGA at a Sept. 14 news conference: “It’s not working the way it was intended. Nor is it working in a fair and equitable way.”
In an email to MinnPost, Emmer’s communications director Carl Kuhl wrote: “A redesign of local government aid is necessary … Clearly, there is a disconnect between the cities that have wish lists they are funding with LGA, the cities who truly need and use LGA for core city services and the way the state funding formula works.”
Nothing simple about aid formulas
Nothing is simple when it comes to the LGA formula. Age of housing stock, decline in population, and commercial/industrial market values are factors for cities of fewer than 2,500 residents. The number of traffic accidents per capita are part of the equation for larger cities.
For a full explanation, go here (PDF).
But LGA experts say there have never been restrictions on how LGA money can be spent; LGA money is fungible and becomes part of a city’s budget. Similarly, county aids are used for a variety of services that aren’t restricted to only police, fire, water or sewer.
In Traverse County, the state’s smallest in population, cuts over the past five years have included the elimination or combination of several social service and administrative jobs, reductions in jail staffing, as well as cutting a highway maintenance worker and an on-call social worker, according to county Coordinator Janet Raguse,
And in Wheaton, Traverse County’s biggest city, because of the LGA shortfall, budget trims have include reductions in force, work furloughs and employee attrition and cuts in library hours. The city also has turned over parks maintenance to inmates in the county jail and has limited street repaving to a few blocks.
Horner has proposed allowing counties to impose a local 0.5 percent sales tax. But that’s of little help because there is virtually no retail in Traverse County to speak of. Currently, Traverse receives $123,000 annually from the state. Seven years ago, before Gov. Pawlenty and the Legislature began making cuts, Traverse County received $577,000.
Horner also has proposed allowing cities to not pay sales taxes on items they purchase.
In Wheaton, City Administrator Jamie Beyer projected that a city sales-tax waiver could save the city about $14,000 a year; however, the most recent LGA cuts to the city amounted to $82,500.
There’s one other major factor in any proposed recrafting of LGA and county aid rules or redesign plans when the next governor takes over.
That’s the Legislature. Its members represent the 87 counties and 854 cities in the state. They will have something to say about the new governor’s — and state’s — relationship to Greater Minnesota.