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LGA targeted for budget cuts

ST. PAUL -- Local governments will be called upon to help balance the state budget.

Minnesota policymakers on Tuesday made it clear that programs such as Local Government Aid paid to cities will be included in a $426 million budget balancing act.

Gov. Tim Pawlenty also announced he plans to implement a state worker pay freeze and urged local governments to follow suit as they are finishing next year's budgets.

"We want to make sure we are leading by example," Pawlenty told reporters during an Associated Press legislative preview meeting.

Pawlenty did not say how much would be saved by hiring restrictions and the salary freeze and he did not know how much local payment money would be cut.

"We have not identified anybody yet," he said.

The actions are part of an effort to balance the state budget, which faces a nearly $5.3 billion deficit over the next two-and-a-half years.

Local aid cuts are specifically to plug a hole in the budget that ends June 30. Even after budget reserves are spent, Pawlenty said that he must find $271 million to cut.

That is the first part of the budget problem. In January, Pawlenty delivers his proposal for a two-year budget that must be balanced despite a revenue shortfall of more than $4.8 billion.

Pawlenty said he could delay sending Local Government Aid payments to cities later this month -- one of two payments they receive a year -- if he and legislative leaders still are working on a short-term budget solution.

However, Senate Majority Leader Larry Pogemiller, DFL-Minneapolis, said he expects Pawlenty to make a final decision by Christmas, about the time LGA checks are sent. LGA is the largest local aid the state sends out.

Like Pawlenty, legislative leaders did not want to commit to specific cuts, but Pogemiller and House Speaker Margaret Anderson Kelliher, DFL-Minneapolis, said local aids are likely targets.

"We need to think in terms of us being in this together," said Senate Minority Leader Dave Senjem, R-Rochester.

Legislative leaders and Pawlenty say they hope to agree on a short-term budget fix soon, but Pawlenty can go ahead and make cuts on his own if lawmakers don't agree.

House Minority Leader Marty Seifert, R-Marshall, said he thought leaders and Pawlenty earlier this year agreed there would be no local aid cuts. However, if there are, he added, he thinks state-imposed levy limits should be lifted.

City leaders are scheduled to testify today at House and Senate committee hearings. Led by mayors Wayne Wolden of Wadena and Mayor Chris Coleman of St. Paul, they are expected to complain about the proposed state aid cuts.

Pogemiller said he had not heard about Pawlenty's salary freeze plan, but said it would come too late to help the current budget. He said the "pronouncement" sounds good politically, but would help little.

Pawlenty spokesman Brian McClung said that for state union employees, the administration will try to negotiate a wage freeze. For management workers not in unions, employees already received cost-of-living raises, but raises planned for 2009 will not materialize.

The governor said he hoped that cities, townships and counties will follow his salary freeze lead. Schools are not negotiating with workers now, he said, so they are not included in his request.

The Republican governor said he wants government salaries frozen for at least two years.

He earlier ordered restrictions on hiring new state workers in an effort to save money.

Davis works for Forum Communications Co., which owns the Daily Globe.

Don Davis
Don Davis has been the Forum Communications Minnesota Capitol Bureau chief since 2001, covering state government and politics for two dozen newspapers in the state. Don also blogs at Capital Chatter on Areavoices.