St. Paul Mayor Chris Coleman lashes out at Governor Pawlenty’s refusal to consider any revenue increases to stave off fire and police cutbacks in Minnesota cities and counties.
Press release from the League Of Minnesota Cities:
From Jim Miller, Executive Director
City officials from across the State of Minnesota understand the severity of the state’s budget crisis. They also understand that the solution will affect all portions of the state budget including the aid and credit programs that help fund city services.
We are disappointed that Governor Pawlenty chooses to dismiss the concerns of city officials as nothing more than “whining.” Just five months ago, cities lost $66 million in state aids when the Governor used his unallotment authority to address the state’s deficit. Now we face the uncertainty of the timing and magnitude of additional cuts to balance the remaining $2.7 billion deficit. We don’t know if the cuts will be 5 percent or 75 percent of the local government aid (LGA) and market value homestead credit (MVHC) appropriations–or a cut of $30 million or $460 million.
Cities do not have the ability to shift fiscal difficulties to any other level of government. Since the 2003 budget crisis, city officials have been streamlining and identifying efficiencies in city operations. They will continue to seek further streamlining but the only other solutions are the difficult choices of raising taxpayer’s burdens or cutting important city services.
Even if cities choose the difficult option of raising taxes, the structure of the property tax system means that replacement revenues will not be available until after property taxpayers make payments a year from now, in May of 2010. Additionally, the Governor insisted last year that the state impose levy limits on cities and counties. These limits were imposed when the LGA appropriation was increased. Now, we expect the actual LGA and MVHC payments to cities will decline substantially-a circumstance not anticipated last year when the levy limits were imposed.
If cities choose to cut services and employees, they need to make those difficult decisions as soon as possible. But again, we do not yet know the magnitude or the structure of the unallotment reductions that we assume will be imposed.
To be clear, cities have already made many difficult choices. In the wake of very deep cuts in state aids imposed in 2003 and 2004, city employment dropped. From 2003 to 2005, city employment was reduced by 16 percent statewide. Even today, city employment remains nearly 6 percent lower that it was prior to the 2003/2004 budget crisis.
City reserves have also been depleted. The cuts imposed last December were administered after cities had set their 2009 budgets and property tax levies, and this timing forced many cities to immediately reduce their budget reserves and cash flow accounts.
We appreciate the Governor’s offer to consult with cities about the magnitude and structure of aid and credit cuts. But let’s not diminish the magnitude of the state’s budget problem or the implications for cities as LGA and MVHC are cut.