Column: LGA cuts hurt economic development
Published 12:00 am Friday, September 24, 2004
By John Ellenbecker, St. Cloud mayor
Given the pitched national debate about terrorism and Iraq, it is easy to forget that the fall elections are also about important issues close to home.
But to ignore those local issues is to discount our own well-being.
Rural Minnesota will not thrive through political neglect. Our economy will continue to struggle, and we will continue hemorrhaging population if we continue to ignore the needs of greater Minnesota.
Young people will not stay in our rural communities if we are unable to provide them with good paying jobs and career opportunities.
Clearly, our challenges are so great that we can no longer afford to send politicians to St. Paul who &uot;go along to get along.&uot;
Greater Minnesota’s legislators must understand that their first responsibility is to advocate for their constituents, not the taxpayers in the rich Twin Cities suburbs.
They must understand that the Local Government Aid program is vitally important to taxpayers and cities throughout rural Minnesota.
Local Government Aid is property tax relief and economic development aid rolled into one neat package.
When the state sends LGA to cities with either high needs or low property wealth &045; cities throughout greater Minnesota as well as Minneapolis and St. Paul &045; the aid is actually serving a dual purpose. It helps cities provide a basic level of government services &045; police and fire protection, street maintenance, and library services &045; at more affordable tax rates.
Without the state aid, cities would be forced to either eliminate many of those services or sharply increase property taxes to pay for them.
By providing a full menu of government services, cities also are able to provide the amenities that businesses demand.
Ask your mayor or any member of your city council, and most of them will tell you that LGA is their most effective economic development tool.
In 2001, with help from many rural lawmakers, the Legislature spent almost $1 billion reducing property taxes. Property taxpayers in the affluent suburbs received the bulk of that tax relief. Greater Minnesota’s property tax relief came mainly through increased funding for Local Government Aid.
Two years later, the Legislature &045; aided once again by rural lawmakers &045; cut $150 million in property tax relief funding from LGA to help solve a $4.5 billion budget deficit. By cutting aid to low-wealth communities, the Legislature pushed a property tax increase onto many rural taxpayers and sheltered taxpayers in the property-rich suburbs around the Twin Cities from a similar sacrifice.
Some legislators will justify their vote by claiming that the affluent suburbs could not make a meaningful contribution to the budget crisis because they receive little state aid. Their argument ignores the fact that taxpayers in those suburbs receive considerable property tax relief as a result of the state takeover of local mass transit funding.
Since the last election, the Legislature has been preoccupied with helping those areas of Minnesota that least need a helping hand. It is an approach that works against the economic interests of greater Minnesota. Many rural cities have been forced to raise property taxes and reduce the government services that they need to attract economic development.
The uneven public policy that is being pursued at the State Capitol must be addressed in this campaign. We must ask our candidates if our votes will buy their loyalty, or will they once more work against us in the pursuit of political harmony.
(St. Cloud Mayor John Ellenbecker is the president of the Coalition of Greater Minnesota Cities.)