Editorial: Plan passes off many costs to rural areas

Published 12:00 am Wednesday, February 19, 2003

Balancing the state’s budget without raising taxes is a noble idea, and one that is certainly welcome among many Minnesotans. But those of us in rural cities like Albert Lea would be fooling ourselves to believe that Gov. Tim Pawlenty’s proposal for erasing the $4.2 billion deficit won’t wind up raising our tax bills.

The key is the cut to local-government aid, a key method by which the state subsidizes the property taxes in cities judged to need it. That means older core cities and outstate regional centers rely on it most, while affluent suburbs don’t get it. The aid pays for more than half of the City of Albert Lea’s budget.

Pawlenty’s plan would cut the aid by an average of 22 percent. That means cities will have to cut a major portion of their budgets or raise local property taxes to maintain the service levels people expect.

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The governor did not release all the details of his proposals Tuesday, but said he would also propose levy limits for local governments to keep them from raising taxes too high. Depending on how low the limits may be, that could ensure service cuts, but it won’t completely stop taxes from rising; many governments will be likely to levy as high as they can under the law to avoid cutting funds for libraries, parks or even police and fire protection.

It would have been more fair for Pawlenty to forsake the no-taxes pledge he took during the campaign and instead propose small increases in statewide taxes like the income tax or sales tax, rather than passing off tax increases to the state’s cities while the rich suburbs get off easy.

The legislature should carefully look at those sorts of options before passing major LGA cuts. Reorganizing LGA to distribute it more fairly is appropriate, but the state shouldn’t make the neediest cities raise taxes to avoid cutting programs necessary for their communities’ safety or quality of life. That would only make things worse for rural and core cities and worsen their competitive disadvantage, as well as bring on the tax increases Pawlenty swore off.

Tribune editorials represent the opinion of the newspaper’s management and editorial staff.