The Coalition of Greater Minnesota Cities (CGMC) is a nonpartisan advocacy organization representing 90 cities in Greater Minnesota. The coalition works to educate legislators about issues that most affect small cities like Park Rapids.
On Tuesday, Elizabeth Wefel of the CGMC presented the coalition's annual legislative session report and consistent to recent past sessions property tax and Local Government Aid (LGA) remain main concerns.
One of the CGMC's top priorities is to convince the legislature to restore LGA back to the 2002 level, before this critical funding was reduced in 2003. In 2002, Park Rapids received $688,836 in LGA and the amount declined to under $400,000 from 2010 to 2013 before inching back up to about $480,000 in 2017-18. LGA is essential to the operating budgets for communities like Park Rapids.
The CGMC stated in this year's session report, "frustrating legislative session yields modest results." The session started with a budget surplus of $1.65 billion. The governor favored using surplus for tax cuts and transportation funding, and less for state government agencies. The governor also favored additional education spending and finding new dollars for transportation.
According to information presented to the council on Tuesday, after the legislature failed to pass a tax bill in 2015 and 2016, LGA funding was left stagnant. As the 2017 session kicked off, the CGMC once again made passing a tax bill with an LGA increase its number one priority. A bill was introduced that would have increased LGA funding by $45.5 million, the amount needed to bring it back to the 2002 level. At the end of the special session, the governor and legislature agreed to a $15 million permanent increase in LGA. Something, but not everything.
"While the increase is certainly better than another year of frozen funding, it is disappointing that the Legislature could not find the will to fully restore LGA to its 2002 level despite the significant budget surplus," the CGMC report states.
The report goes on to say, the bright spot in this year's "tumultuous" session was the passage of a $987 million bonding bill. After a failure to pass a capital investment bill in 2016, a serious state investment in infrastructure project was greatly needed.
The CGMC pushed for two main bonding priorities: clean water infrastructure and Greater Minnesota Business Development Public Infrastructure (BDPI) Grant Program funding. The final bonding bill included nearly $117 million for water infrastructure programs and $12 million for BDPI.
Other legislative outcomes highlighted in the CGMC report include $300 million in bonding, plus $25 million per year for Corridors of Commerce, $16 million for small-city streets and $8 million for workforce housing grants.
Included in the 2017 Tax Bill is a new exemption from state commercial/industrial property tax on value up to $100,000. With this exemption businesses will see reductions in their state business property taxes. In Park Rapids, based on the average value of commercial/industrial of $318,300 in the city, under the new law the property tax will be reduced from $2,572 to $1,885. Low value property at $159,200 in the city on average will see a decrease in property tax from $1,115 to $428.
Some good things came out of the session while, as is often the case, some things left undone. The CGMC lists possible "choppy waters" ahead based on the following: High cost of tax and transportation bills could create deficits in the future; state budget leaves little room for error in case of downturn; current tax collections are trending below forecast.
CGMC cities are dedicated to a strong Greater Minnesota. The coalition's mission: "To develop viable, progressive communities for businesses and families through strong economic growth and good local government. We support fair property taxes, good land use planning, sensible environmental regulation, a balanced transportation system, and effective economic development tools to meet that goal."
For more than 30 years, the CGMC has united Greater Minnesota cities with similar concerns. It brings city officials and legislators together to discuss the issues confronting greater Minnesota. Through effective lobbying, thorough research, timely communications, and active involvement in the legislative process, the CGMC gives cities an effective voice at the Capitol.