Taxes may rise if state aid falls

Published 12:00 am Tuesday, August 27, 2002

With the possibility of state budget cuts looming, the city of Albert Lea has been forced to compensate with their proposed budget for 2003.

City Manager Paul Sparks said that he anticipates the state, in making cuts for their own budget, will cut back on local government aid, or LGA.

&uot;The state has had a very tough time in the last two years,&uot; said Mayor Bob Haukoos, who used to serve as a state representative. &uot;Their deficit could be as high as $2.7 billion.&uot;

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Last year the city was given a $7,131,764 from the state in local aid. Sparks anticipates this year’s figure could be far less once the legislature is done making cuts next year.

With the high level of LGA given to Albert Lea in the past, the city was able to lower the property tax levy for this year. But with possible cuts at the Capitol, Albert Lea must now look to a maximum levy to help ease the burden, Sparks said. The maximum levy for the 2003 budget &045; a limit set by the state &045; is $1,455,683. The 2003 level will most likely, at the urging of Sparks, be set at that number.

In a letter to the council included with the budget, Sparks wrote, &uot;I believe that we hold sufficient funds to manage a cut from the state.&uot;

The city has to set this levy prior to the state’s budget decisions because cities must set levies by October, and the state legislature doesn’t convene until January. Haukoos said the state’s overall LGA funds could be cut up to 10 percent, according to reports he has heard.

If the levy is made and the state does not cut back on LGA funding, Haukoos said the city will then have a budget surplus. &uot;We will take any surplus that may be into consideration when we get to next year’s levy,&uot; said Haukoos.

The city will have a public hearing on the proposed 2003 budget on Sept. 9 at 7 p.m.