ST. PAUL, Minn. -- A month after state lawmakers passed a budget, the Governor's Revenue Commissioner gathered with city mayors from across the state to celebrate an increase in aid to local governments. The budget increases Local Government Aid (LGA) by $130 million; cities will get $80 million more and counties will get a $40 million bump.
Revenue Commissioner Myron Frans says it was a high priority for Governor Dayton. "He believed that over the last 10 years that we've really been balancing the state budget on the backs of cities and counties," Frans remarked.
"It's the first piece of good news in my time in office," Minneapolis Mayor RT Rybak said, grinning from ear to ear following the press conference at the State Revenue Building.
"We waited year to year to see where the dollars would come out, not knowing where they would go," Richfield Mayor Debbie Goettel explained.
The City of Richfield, like every other municipality, has been hit hard by the cut in LGA over the past decade. They've had to eliminate three dozen full time positions and put off some maintenance and road projects based on the funding shortfall.
"We've tried to keep those kinds of services that people look for most, like police and fire," City Manager Steve Devich said.
A look at the city's books show what kind of an overall effect the LGA cuts have had. In 2001, Richfield received more than $3.7 million in LGA money from the state. 39 percent of the city's revenue came from LGA while 38 percent of it was derived from taxes. In 2013, LGA money supplied 7 percent of the city's revenue, while taxes contributed 70 percent of Richfield's revenue. The tax levy went up around 6.5 percent annually over that period.
Mayor Goettel says that based on the increase in aid, the city may be able to hold the line by keeping the tax levy flat. "It's a very big deal," Devich concluded.
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