City not surprised by GOP cuts

Published 9:49 am Thursday, January 20, 2011

Albert Lea city leaders said Wednesday they are disappointed but not surprised at the state budget proposal submitted Tuesday by new Republican majorities.

The proposal asks local governments, colleges and recipients of social services grants to bear the brunt of the first installment of proposed cuts. It copies some temporary cuts made under former GOP Gov. Tim Pawlenty and makes them permanent.

Specifically, it asks for $460 million in cuts to city and county governments.

For Albert Lea this would reduce local government aid from the certified amount of about $5.3 million in 2011, to $4.61 million, according to Interim City Manager Pat McGarvey.

The other part of a reduction that would affect the city is a change to the market value tax credit that the state pays to the city for a portion of its property tax bill.

This would decrease from about $480,000 to about $124,000 under the proposal, McGarvey said.

Added up, this means reductions of about $1.1 million to the city of Albert Lea. This is about 20 percent of the money the city receives from the state.

The city’s general fund is about $14 million.

Albert Lea Mayor Vern Rasmussen said he has large concern about the proposal, noting that the council needs to start thinking where those reductions are going to come from, even if they do not come to pass.

“We have to look at that and start evaluating right away,” Rasmussen said, adding that he planned to bring up the issue during the council’s workshop tonight.

He said he was aware reductions were a possibility, given the history of the state in recent years.

“We’re not against taking cuts,” he said. “We understand the severity the state is in, but we hope they look at fair cuts between all areas in the state. In the last several years it’s been disproportionately spread out.”

Rasmussen said while he recognizes that this budget proposal is just coming from one sector, Democratic Gov. Mark Dayton still needs to present his proposal as well, which will probably fare better for local government aid.

“Things don’t always end up at the worst case,” he said.

Dayton has stated he objected to the Republican proposal, saying he won’t agree to “piecemeal cuts and partial solutions.” He is expected to issue his own recommendations on Feb. 15.

Rasmussen said the local legislators that represent Albert Lea are supportive of local government aid and are aware how reductions to it will directly affect either the city’s services or its taxes.

He said he’s concerned about where the city is at with taxes right now and noted that he’s not sure he’s willing to put more of a burden onto residents.

“This proposal could not have come at a worse time as cities have already cut services to the bone, and many have been forced to raise property taxes as well in the wake of previous aid cuts over the past two years,” said League of Minnesota Cities Executive Director Jim Miller.

State revenue officials estimate that every dollar cut from local aid programs results in a 67 cent increase in property taxes.

— The Associated Press contributed to this report.