City looks at ways to operate without Local Government Aid
The Park Rapids City Council has decided to work on ways to run the city without relying on Local Government Aid.
Gov. Tim Pawlenty made cuts to LGA payments for cities and counties in 2008 and 2009. Park Rapids lost $86,085 in 2008, $74,778 in 2009 and in the governor's latest budget proposal, Park Rapids would lose $201,459 in the next year.
The Coalition of Greater Minnesota Cities recently urged cities to adopt a resolution regarding the LGA cuts. The proposed resolution for Park Rapids stated, "The City Council and City of Park Rapids urge the legislature to reject the governor's supplemental budget LGA cuts for 2010."
The resolution didn't pass at Tuesday's council meeting.
The origin of the resolution came from the Coalition of Greater Minnesota Cities legislative action day last week in St. Paul, which mayor Nancy Carroll and city administrator Bill Smith attended.
"The governor's supplemental budget had just come out so there was quite a bit of discussion at our meetings," Carroll said.
"In fact, it dominated our agenda," Smith added. "The Coalition is being very proactive in trying to minimize the impact of LGA cuts."
After the cuts to LGA, Park Rapids would only be receiving $112,000 in government aid.
Councilman David W. Konshok said he had an issue with the resolution.
"I was not thrilled, no one is going to be happy with a $200,000 cut," Konshok said, referring to the 2010 estimated cuts. "However, I think we have to face the reality too that there's a big, gaping hole in the state budget that the governor and the legislature are going to have to figure out.
"I'm not convinced that he's not correct in this situation. They're either going to have to look at cuts or they're going to have to look at increases."
Councilman Paul Utke agreed.
"I would like to be encouraging the legislature to cut spending so that this doesn't have to take place," Utke said. "Rather than just rejecting the cuts."
Konshok added that it's clear there will be a political battle this spring and he's not comfortable with the city stepping in to that role and taking sides.
"I tend to agree with David," said councilwoman Sue Tomte. "... If we're taking a proactive approach and looking at how we can manage our budgets without depending on additional government money and every time something goes wrong say, 'We need more government spending to make it work,' we need to look at doing things very proactively and making changes in what we do."
Mayor Carroll said the resolution would give the Coalition of Greater Minnesota Cities representatives more strength at the capitol.
"The governor's current recommendation exempts some of the governmental departments and puts LGA right in the middle of the biggest cuts again," she said. "I think it demonstrates, yes we are willing to do our part, but how do we make up $200,000 in a budget that's already been approved and there's nothing we can do at this point in the year to recover that. Nothing. We are just out that money."
Utke was uncomfortable with the way the resolution was worded.
"The way it's worded, it's just rejecting the governor's cuts but not coming up with any solutions," he said.
Carroll suggested that at the meeting last week a solution was presented that would be based on extending sales tax to some services that are currently not taxed such as pedicures, manicures or tattoos.
"But once again they never talk about cuts like we have and that's what frustrates me," Utke said. "I'd rather they cut other spending to pay for this."
Carroll said there is a divide between the metro area and rural Minnesota.
"The point of LGA to begin with is if you live in a city with a lot of property wealth, you can adequately pay for services out of your own property taxes and it's fair and it's fairly low," Carroll said. "If you're in a city like Park Rapids and most other out state cities, we do not have the property wealth, and we could very easily be paying two or three times more for basic core services."
Konshok said there are other areas that will be hurting with the state cuts, too.
"It's high profile but I mean it's important to note too, the governor's budget had fairly good across the board cuts in a number of areas," Konshok said. "I think there's some areas that will hurt and be more controversial than LGA like the cuts to Minnesota Care ... that will indirectly affect us as well."
A motion was made to deny the resolution by a vote of 3-1, with Carroll opposed. Councilman Pat Mikesh was not present at the meeting.