Republican legislators are targeting local government aid as they attempt to erase the state's $5 billion deficit.
Minneapolis Mayor R.T. Rybak defended the program on his blog, arguing against the contention that state aid is a handout.
"Minneapolis helps keep the state afloat," Rybak wrote. "This year alone, we will send $367.5 million more to the state in sales and property taxes than the state has promised us back in LGA."
Rybak's numbers are on point.
LGA is given to Minnesota communities that would have a hard time paying for services with property taxes alone. Both the House and Senate are debating bills that would cut LGA; the House bill would phase out aid for Minneapolis, St. Paul and Duluth.
Rybak lays out a lot of reasons why he thinks cutting LGA is a bad idea, pointing out that Minneapolis puts more in the state coffers than it takes out in state aid.
City budgeters estimate that the state will collect roughly $380 million in sales taxes and roughly $75 million in commercial property taxes from Minneapolis.
Minus the $87.5 million in LGA Minneapolis is slated to get in 2011, the city is expected to provide the state with $367.5 million this year.
For his first PoliGraph test, Rybak earns an Accurate.
The Mayor's Blog, Urgent: Need your help today to hold the line on property taxes, by Mayor R.T. Rybak, March 18, 2011
Minnesota State Legislature, House Research: The City LGA Program, by Pat Dalton, January 2009
Minnesota Public Radio News, Senate GOP bill slashes local government aid, by Tim Pugmire, March 23, 2011
The City of Minneapolis, 2011 Budget, accessed March 23, 2011
The Minnesota Department of Revenue, Minnesota Sales and Use Tax: Instruction Booklet, accessed March 23, 2011
Interview, John Stiles, spokesman, Mayor R.T. Rybak, March 22, 2011
The Humphrey School
Well, this net figure would be significant if the city didn't draw on the state to help maintain Interstate 35W and 94, subsidize light-rail transit, fund much of the cost of city schools, and pay for welfare benefits to city residents. But since it does, this is hardly conclusive about who subsidizes whom.
I don't understand the point: Who's disputing Rybak's figures? I'm left to wonder who "promised" the LGA aid, with such specificity, to Minneapolis.
None of this is surprising. The broader fact is that urban areas always subsidize non urban areas because of the density and population numbers they have. In fact the numbers would likely grow if one counted all taxes collected from inside the city limits. Like most major cities, Minneapolis pays more in all taxes than the state spends inside the city limits. Since LGA is determined by a formula set by the state, it's that formula (prior to changes proposed this year) that promised such a specific number.
All cities send more money to the state than they get back. Where you think the money comes from for the DNR, MPCA, MDOT State aids to schools, attorney general, legislative salaries etc.