Area governments will feel pinch

For Crow Wing County, Administrator Tim Houle said the state's projected budget deficit is like having a parent with a financial problem.

"We will be involved in the solution," Houle said.

Houle said there is no doubt the county will be affected, The only question is how much. Houle expects there may be unallotments yet this month, which means the state will be taking money from the county's savings account as there is no time left to make it up from budget cuts.

For 2010, Houle said the county will have time to reduce expenses.

"You live with the resources you've got," he said, adding residents and businesses are all facing the same financial issues and the county shouldn't be exempt. "We're not the only ones making difficult choices."

For the county, the budget constraints come at an economic time when there is greater demand for human services. But with difficult economic decisions widespread, Houle said it's not the right time to whine about cuts from the state when the Legislature has a tough set of problems to deal with.

The last state budget deficit meant a $1.2 million unallotment for the county based on a $4.5 billion state shortfall. Looking at those numbers, Houle speculates the county could lose an additional $300,000 to $500,000.

Earlier this year, Gov. Tim Pawlenty cut $269,942 in local government aid for 2009 and $622,858 in 2010 for Brainerd. The news of a $1.2 billion state deficit through mid-2011 has City Administrator Dan Vogt worried about further cuts to the city's local government aid, which used to cover about half the city's budget.

"That was part of the solution to take care of the budget deficit last time and I am concerned that it will be part of the solution that the governor and the Legislature will look at again," Vogt said.

However, the announcement of the $1.2 billion deficit did not identify where cuts might be made by the Legislature or Pawlenty and Vogt said he hasn't heard anything from associations to which the city is a member

"I'm hopeful they will leave us alone this time," Vogt said. "We're hurting bad enough with our budget cuts and I certainly don't know where the funds would come from for more. We shall see."

School districts might not feel the impact of the $1.2 billion deficit - yet - because of the boost of federal stimulus dollars districts' received for the next two years. But Steve Lund, director of business services for the Brainerd School District, said the greatest worry he has is with the projected $5.4 billion deficit by 2013 after those federal stimulus funds run out. The state already had instituted accounting shifts for school districts, which can't be done again, said Lund.

"It's the cliff, the cliff is what we have to be scared of," Lund said of the projected $5.4 billion state shortfall. "It's not that the $1.2 billion doesn't concern me, it certainly does concern me, but boy, that $5.4 billion in my mind that's real and that's going to sneak up on us and really hit us."