After years of virtually frozen Local Government Aid (LGA) Brainerd Mayor James Wallin and Brainerd City Council President Bonnie Cumberland are hoping a bill they support in the Legislature will reform and beef up the revenue going to cities with low tax bases and high needs.
Wallin, Cumberland and attorney Bradley Peterson, whose law firm acts as a contract lobbyist for the Coalition of Greater Minnesota Cities, were scheduled to meet Monday afternoon with area legislators. The Brainerd officials were also scheduled to consider a resolution supporting the proposed LGA reform, which includes appropriation of an additional $80 million statewide at Monday’s council meeting.
The resolution passed by a 7-1 vote, with council member Mary Koep opposed.
Unless the LGA reform passes, Cumberland said Brainerd would likely have to cut staff and services.
“You’re just peddling backwards,” she said of the current situation.
Wallin estimated that without the bill’s passage Brainerd would be faced with cutting the equivalent of most of its law enforcement and fire protection budget or increasing property taxes by about $900 per household.
The mayor said Brainerd is particularly dependent on LGA since it has many nonprofit buildings within city limits such as a college, a hospital, schools and churches. In addition much of the housing stock are affordable rental properties. To lose LGA, Wallin said, would be devastating.
“We don’t have a lot of expensive houses in town,” he said.
Cumberland and Wallin estimated that LGA makes up between 40 and 50 percent of the city’s budget.
To illustrate the condition of Brainerd’s economy, Cumberland noted that an entry maintenance position in the city’s street and sewer department (paying about $20 an hour) garnered about 130 applications.
“I think we’re on the short end of the stick as far as the economy,” Wallin said.
Peterson said that statewide LGA contributions are significantly below the 2002 peak of $565 million. The most recent LGA contributions, statewide, was $426 million. The LGA reform and appropriation legislation he’s advocating would raise that to $506 million. Under the current law outstate cities such receive close to 70 percent of LGA. Those cities, he said, have about 25 percent of the state’s tax base. LGA payments, Peterson said, are designed to equalize communities’ resources.
The reform package, Peterson said, calls for a simpler, fairer formula; an additional $80 million; and inflation and population growth adjustment. He said the legislation has support among metro and outstate cities.
“It’s crucial that this passes,” Wallin said.