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Council hears from legislators, CGMC rep

Tim Flaherty of the Coalition of Greater Minnesota Cities and legislators Sen. Rod Skoe, DFL-Clearbrook, and Rep. David Hancock, GOP-Bemidji, arrived at this week's Park Rapids Council meeting to share insights on the "new majorities' and governor's quarrel."

"The governor supports Local Government Aid," Flaherty told the council, but at this point, "LGA is in limbo," he said.

Flaherty said the CGMC was "strongly opposed" to the GOP majorities passing an early cuts bill before Gov. Mark Dayton offered his recommended budget.

The bill reduced the projected deficit by $1 billion and cut LGA funding to $426 million, the same funding level as 2010. The governor subsequently vetoed the bill.

"There are suburban legislators who want to eliminate LGA," Flaherty cautioned the council.

Borrowing from school districts may continue, he said.

Flaherty indicated support for Dayton's position that includes full funding of LGA coupled with no reductions to any property tax relief program and no increase in property taxes. Dayton's budget relies on new revenue, including an increase of income taxes to high income earners and reductions in business tax expenditure.

"We're stuck right now," Skoe said of the seemingly impenetrable impasse. He indicated concern with Dayton's willingness to shave spending. "But it's important the shutdown come to an end."

Minnesota businesses are being negatively impacted, Skoe said. City revenue is being lost. The state's bond rating has been downgraded, which will affect cities' borrowing. Cuts, he said, will impact rural hospitals and higher education.

"We need to look at raising taxes on the higher income," Skoe said. "Income tax is based on the ability to pay.

"I hope my colleagues are willing to work it out," Skoe said.

Hancock, who's in his first term in the Legislature, good naturedly admitted to lacking Skoe's "know how."

He reflected on the difference between federal stimulus dollars entering state coffers and the $5 billion deficit the state now faces.

"We'll be kicking the can farther down the line," he said of Dayton's budget. Hancock indicated he favors a tighter budget, than the GOP majority's $34 billion proposal.

"We have to learn within our means. Tax increases do not always result in revenues," Hancock said. "We don't need tax increases. We need more taxpayers - businesses.

"The taxes being proposed are taking money from the people who could increase jobs," Hancock said. "We need to solve the spending problem as opposed to funding unsustainable growth."

He suggested the governor acquiesce to convening a special session of the Legislature to pass a "lights on bill," or, he predicts, "the shutdown will continue. "The governor is making this as painful as possible. We cannot continue to fund unsustainable government spending."

"It's our responsibility as a legislature to produce bills the governor will sign," Skoe said. "Historically, we have been a high service, high tax state. Now we're a lower tax state. It's a misperception that the proposed spending is at unsustainable levels. That is not accurate. Government costs are going down.

"It's time to move on. Get this done," he said. "We are doing long-term damage to the state. The last time we lost our credit rating, it took 15 years to get it back," Skoe reminded his constituents.

"What's happening in Minnesota is a precursor to what's happening in the nation's capital," Flaherty said. "We need to get financial houses in order."

Mayor Nancy Carroll issued a plea for expediency. "We can't handle a shutdown anymore. This directly impacts this area," she said of tourism and state services affecting the local economy. "We need this to come to an end. Please work this out. I'm asking for a compromise. Please."

In other action, the council:

n Agreed to draft a joint resolution postponing the annexation of Henrietta Township property east of CSAH 4 that was scheduled for 2012.

"Given the economic slowdown and its resulting impact on development, the town (township) believes extending the eligibility date for this particular area to after Jan. 1, 2017 is appropriate," attorney Troy Gilchrist wrote on behalf of the township.

City departments concurred, "in the spirit of cooperation," with the understanding the township bears all costs.

n Approved a conditional use permit allowing a single-family residence at 708 Bridge Street, a zoned business district.

Applicant Tracy Smart is constructing an addition onto the west side of an existing business for living quarters. The business and home will have separate entrances. The addition will be constructed with similar materials with a privacy fence erected.

The applicant will be required to plant two boulevard trees, as required for new residential dwellings.

n Approved a conditional use permit to allow a motorcycle service and repair shop, Rob's Hog Shop, at 1012 Birch Avenue.