In the Spotlight

News & Features
Go to Session 2003
DocumentSession 2003
DocumentBudget and Taxes
DocumentHigher Education
DocumentK-12 Education
DocumentHealth and Welfare
DocumentPublic Safety
More from MPR
Your Voice
DocumentJoin the conversation with other MPR listeners in the News Forum.

DocumentE-mail this pageDocumentPrint this page
Greater Minnesota cities bracing for state aid cuts
Larger view
Bemidji city officials will deal with state aid cuts by putting off equipment purchases for the fire and police departments. (MPR file photo)
City leaders across Minnesota are preparing to tighten their fiscal belts. DFL lawmakers say the newly passed state budget means cities, mostly in greater Minnesota, will see a 25 percent average cut in state aid payments. Some say the cuts will result in fewer services and higher property taxes. Officials in Bemidji are hoping to avoid cuts to essential services like police and fire protection.

Bemidji, Minn. — Bemidji Mayor Richard Lehmann is disappointed in the state Legislature, because his city is going to see 17 percent less money from the state.

"They turned their back on greater Minnesota, as far as I'm concerned," said Lehmann. "What was the 'Minnesota Miracle' now has turned into the 'Minnesota Nightmare' for communities like us."

Local government aid, the so-called Minnesota Miracle, was created in the 1970s to help cities with low tax bases. In Bemidji, for example, half of the property is not taxable because it is owned by Bemidji State University and other governmental bodies.

Larger view
Image David Minke

Aid from the state makes up more than 60 percent of the city's general fund. But state cuts will slice $1.2 million from Bemidji's budget over the next two years. Republican lawmakers said some cities were receiving help they didn't really need. Lehmann says Bemidji's budget is already lean.

"Look at our books, if they're so inclined, and tell us where the fluff is," he said. "If there's fluff in there, the council is having a heck of a hard time finding it, because we're going to have to make some cuts. And they're not going to be easy cuts to make. Because there is no fluff."

Bemidji city officials knew the cuts were coming. They've already eliminated a youth recreation program and cut staff. They're raising permit fees and parking violation fines. They plan to cut back window service at City Hall. That means longer lines.

Bemidji City Manager David Minke says that's just the tip of the iceberg. Minke says future cuts could affect public safety. Some new equipment purchases for the fire and police departments will be put on hold.

It may also affect city employees. They're not talking layoffs yet, but two open positions haven't been filled. Minke says the city will continue to protect its citizens, but it might not be at the same level as past years.

They turned their back on greater Minnesota, as far as I'm concerned. What was the 'Minnesota Miracle' now has turned into the 'Minnesota Nightmare' for communities like us.
- Bemidji Mayor Richard Lehmann

"If it's your house on fire and it takes an extra two minutes for the response because we have fewer staff people, well, you know, how essential is that two minutes?" said Minke. "I'm not trying to sound alarmist, but it means that we're going to have to evaluate and maybe change the way we think about services."

The new tax bill allows cities to levy back up to 60 percent of lost aid. That means Bemidji would have to raise property taxes by nearly 30 percent to make up the difference. Taxes on an $87,000 home, for example, would climb to $285. That's $66 more than the current rate.

David Minke says the Legislature may have balanced the state budget without raising taxes, but that won't hold true at the local level.

"It puts some of the legislators in a good position, where they say, 'Well, we didn't raise taxes. It was your local officials who raised taxes. So complain to them.' But in reality, there aren't a lot of choices,'" says Minke.

Opponents of the government aid cuts say property taxes will go up around the state, by an average of 14 percent this year and at least that much in 2004. Larry Buboltz, president of the Coalition of Greater Minnesota Cities, says he fears the aid cuts could change the face of the state.

"This is going to erode away some of the quality of life that exists in greater Minnesota," Buboltz said. "It's going to force people from these communities -- that are going to now have high tax rates and lower services -- out of these communities to places where, I presume, going to the metro area again. It's going to exacerbate, really, the out-migration of people from greater Minnesota."

The new tax bill and cuts in local government aid were largely driven by Republican lawmakers. Party leaders say the gloomy effects of the cuts have been exaggerated. They say $100 million more was put into government aid funding than Gov. Pawlenty first proposed.

Republicans are also quick to point out that rural cities are seeing higher cuts because they've been the biggest recipients of state aid.

Respond to this story
News Headlines
Related Subjects