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Insight Now: July 29, 2010 Archive

Should Minnesota end LGA funding now?

Posted at 1:36 PM on July 29, 2010 by Michael Caputo

We debated city financial survival, trying to put the issue of state funding for cities InContext. The proposal on the table: Minnesota should end its method for giving aid to cities - the Local Government Aid program or LGA.

Our two debaters set the stage for the July 30 online discussion. Chuck Marohn, president of Community Growth Institute in Baxter, said LGA just doesn't work and is an unstable source of income. Don Reeder, public affairs manager for the League of Minnesota Cities, said it's the state's implementation of LGA that doesn't work. Don't scrap the system because the execution is failing.

We heard plenty about the flipside of cities getting aid from the state - that cities are prevented from raising revenue by any means other than property taxes (and even that has been capped by the state). Worthington City Administrator Craig Clark said:

"Is the state willing to renegotiate those parts of the bargain? Let's be candid, the State wants the local government to provide a heavy amount of the solution without letting go of their control over us."

There is the notion that LGA should stop being an entitlement. Joel Hanson, Little Canada city administrator:

" I don't need LGA to maintain infrastructure. LGA should be needs-based (using) core operating costs to determine 'need'."

In the end there was some agreement about the need to reform LGA, and certainly people approached the idea that cities are going to have to make prioritization of services a priority.

Others who participated in the debate:
** Mike Gamache - Andover mayor and President of North Metro Mayors
** Jeff Van Wychen - policy analyst for Minnesota 2020
** Ronda Allis - Region Nine Economic Development director and transportation planner in Mankato
**Jason Benzing, a city council member in Dansell

For background on the conversation, click here. And for an explanation of the InContext debate format go here.

InContext transcript:

Minnesota's unique way of giving state aid to cities - the Local Government Aid or LGA program - has been dwindling. Should LGA just end?

State leaders developed LGA back in the 1960s to keep local property taxes down and provide essential funding for cities (a good history can be found here).

But over the last two years, state budgets have cut LGA to cities. The state faces a deficit in the coming budget cycle of $5.8 billion. LGA seems poised to be slashed again. Meanwhile, cities shut off street lights or reach out to citizens for help balancing budgets. A League of Minnesota Cities report talks about the dire financial circumstances facing cities. And we've discussed this at Insight Now.

Arguing for this position is Chuck Marohn, planner and president of Community Growth Institute in Baxter and author of the Strong Towns blog. Arguing against the position is Don Reeder, communications manager for the League of Minnesota Cities and co-author of the Cities Matter blog.

Explaining the online debate format - InContext

Insight Now has experimented with its space to hold live online discussions. Now we have a new experiment to try - we call it InContext.The concept is simple we start with an extreme position. We invited two people to argue for and against that position. Then we invite all of you to help put that position in better context. By finding some common ground, we can move this discussion forward. Here's more on the format:

These debates can be held on any number of issues discussed here. And the goal is to put them InContext.

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