The difficult economy and shaky budget situation have left city sales-tax proponents uncertain about how to carry out their plan this legislative season.

&uot;I don’t know what to do at this moment,&uot; Destination: Albert Lea President Tony Trow said, though he said the group has not given up the one-half percent tax. &uot;Everything is up in the air right now.&uot;

Trow thinks the extra tax will be less popular after a huge leap in local property taxes because of the Albert Lea school referendum and county’s courthouse project. Combined with an unstable economy in general, it is likely that the proposal would be killed in a required referendum in November even if it does pass the state legislature, which it failed to do last year.

Another concern is that the state may cut local government aid (LGA) in exchange for granting the local sales tax.

&uot;There is a strong possibility that happens,&uot; City Manager Paul Sparks said. &uot;I would hate to jeopardize the LGA by giving the legislature an opportunity to revise the amount.&uot;

The city received $6,383,540 in LGA last year, amounting to 54 percent of the budget. Albert Lea is one of the cities most reliant on LGA among cities with 15,000 or more people in the state.

The half-percent sales tax would generate about $1 million per year. But, unlike LGA, which is basically put into the general fund, the sales tax revenue would be designated for particular spending purposes &045; like the lake improvement projects pushed by DAL.

Any specific sanction on the LGA for rewarding a sales tax has not been mentioned either by the legislature or administration, but Gov. Tim Pawlenty has referring to a drastic reformation of local governments’ revenue structure.

Local legislators are trying to figure out what exactly is going to happen to LGA, and how the sales tax can fit in without affecting the LGA amount.

&uot;The local-option sales tax should probably be in the LGA calculation,&uot; Rep. Dan Dorman, R-Albert Lea, said. &uot;Because if you have a two comparable cities where everything else is the same, except for one has a revenue stream from a local-option sales tax and they are doing their projects with that, it doesn’t make sense that they still receive the same amount of money from the state as the other community that has much less revenue.&uot;

Dorman said that it will take some time to figure out what exactly is going to happen to LGA before Pawlenty reveals his plan. &uot;I’m going to take my cue on that from the city,&uot; he said. &uot;The message I seem to be getting from the city is that the first priority is the preservation of LGA.&uot;

Sen. Dan Sparks, DFL-Austin, also said that he would wait to find out what Pawlenty says.

&uot;Certainly, the cities like Albert Lea and Austin rely heavily on the LGA. So, the best thing to do is to wait to get a feel how those numbers will play out, and we can revisit the issue at that time.&uot;

Trow believes the community still needs the sales tax revenue. The revenue from the 10-year tax would give the city the capacity to issue over $10 million bonds.

&uot;We see the sales tax as a way to finance projects we cannot otherwise finance,&uot; Trow said.

He mentioned that if DAL would amend the tax proposal by designating more money on the lake projects instead of downtown redevelopment to win more community support.

&uot;We may have a dam on Albert Lea Lake without the sales tax. But, we’ll never get comprehensive projects done without it,&uot; he said.