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Local leaders hope for best with LGA, CPA

WORTHINGTON — With less than a month to the deadline and a surplus of $1.65 billion, the Minnesota Legislature needs to come to an agreement soon on how to spend the state’s money.

Among the arguments between Gov. Mark Dayton and Republican leaders in the House and Senate is how to deal with funding for Minnesota counties and cities.

Local Government Aid (LGA)

For cities like Worthington, LGA is the primary funding source, making up over 40 percent of the city’s revenue.

From 2003 to 2013, LGA was cut significantly. In the first year of cuts after 2002, Worthington lost over $400,000 in state aid, which City Administrator Steve Robinson said had a large effect on the city’s budget.

“When the LGA cuts went into effect, the city made a number of cuts within our operation,” Robinson said. “Now we’re back at this level, which has allowed us to restore some of the cuts that were implemented. For instance, we had an open police patrol officer position that was never filled — in January of 2016, we filled that position.”

Since Dayton took office, the state has invested $94 million in LGA, restoring 68 percent of the cuts. Worthington received $3,177,946 in LGA funding this year, significantly less than the $3,406,166 it received in 2002.

Gov. Dayton’s budget proposal would add $20 million to LGA funding for 2018. That would add $117,474 to the Worthington’s 2018 budget.

The Senate’s proposal includes an overall cut of $17 million and cuts $28 million in LGA from the Twin Cities. However, Greater Minnesota cities would see an uptick. For Worthington, this means $67,928 more for the budget next year.

The current House proposal includes no extra money toward LGA. Some standalone bills, though, give city administrators across the state some hope.

Bills authored by District 22 Sen. Bill Weber, R-Luverne, and District 12b Rep. Paul Anderson, R-Starbuck, would add $45.5 million to the LGA program over the next two years, bringing funding for the LGA program back to 2002 levels, ignoring inflation. The increase would bring Worthington an additional $133,874 next year.

“Bill used to be the mayor of Luverne, so he knows the value of LGA and he knows how important it is for his district,” Robinson said.

The city of Worthington has been pushing for the $45.5 million increase as one of its top legislative priorities, but Robinson admitted he would be “ecstatic” if the $20 million increase was passed.

As for other standalone bills, a DFL-led bill (HF 1320) would increase the annual LGA allotment by $67.55 million. For Worthington, this would mean an additional $396,166 next year.

County Program Aid (CPA)

Dayton has proposed $10 million in additional CPA funding for next year, providing Nobles County with an extra $21,206.

The Senate is proposing an additional $6 million, while the House has no increases budgeted.

Nobles County Administrator Tom Johnson noted that counties don’t rely nearly as much on CPA as cities do with LGA. He credited CPA for lowering property taxes, the primary source of revenue for Minnesota counties.

“The intent of CPA is to cover a lot of the state mandated items, but it doesn’t nearly cover it,” he said. “Really, it keeps the levy down, plain and simple.”

During the housing crisis in 2008, CPA was cut by $40 million. Nobles County received $656,552 this year, down from over $1.1 million in 2007.

A bipartisan bill (HF 609) would increase CPA by $40 million and would change the formula. Nobles County would receive an estimated $772,832 in 2018 — a 44 percent increase over what it’s expected to get next year.

Johnson plans to send a letter to legislators next week asking for an increase. He said he would welcome any increase in CPA.

“It would be huge improvement, because every legislative session we get more mandates and very few come with funding any more,” he said.

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