MPR News reporter Jennifer Vogel writes:
Just as the Legislature is about to begin a special session to settle the state's budget, the revenue department has issued a release stating that Local Government Aid checks -- scheduled to be issued tomorrow -- will be delayed until at least July 27.
Perhaps more unsettling for some cities, the release suggests that the payments "will be revised to reflect the new 2011 levels." The LGA payment amounts that will be approved by the Legislature and governor are unknown at this point.
MPR News reporter Laura Yuen adds:
Gary Carlson of the League of Minnesota Cities says the department apparently needs time to compute the new amounts based on the pending passage of a tax bill as part of a state budget deal.
"We were wondering over the last several days if the delay in the special session was going to create a problem for the administration of LGA, and sure enough, now we get the official word that the tax bill will contain language that will delay by one week the requirement for the payment of LGA."
The League is anticipating that the amounts will reflect those included in a GOP bill vetoed by Governor Dayton earlier this year. That would mean most cities would receive less than they were promised for 2011, and likely the same as they received in 2010.
This article in the Des Moines Register caught my eye.
According to the story, lottery ticket sales at stores along the Iowa-Minnesota boarder are getting a boost. The Minnesota Lottery has been shuttered during the shutdown.
The story quotes Iowa Lottery Vice President Mary Neubauer:
"We have checked with locations in a few different communities that are along the major highways that run between Iowa and Minnesota, and stores there are seeing an increase in Iowa Lottery sales."
The Jo Stop convenience store along Interstate Highway 35 near Northwood, which is just south of Albert Lea, Minn., has seen lottery sales running at two to three times normal. The North Star Express, another Northwood-area convenience store, reports lottery sales up 25 percent, Neubauer said.
Speaking of lost revenue, MPR's Annie Baxter takes a look at how Canterbury Park, a horse racing track in Shakopee, MN, is faring during the shutdown. The facility must remain closed because the Minnesota Racing Commission, which oversees Canterbury, is not considered a core government function.
Already, the park has been forced to lay off 1,000 of it's 1,300 employees. But Baxter reports that the shutdown is having a ripple effect on businesses in the surrounding area.
Worker layoffs mean lost tourism and decreased spending for places like Canterbury. Lost revenue is one of the biggest costs of the shutdown, according to the economic forecasting firm Moody's Analytics. It estimates that the shutdown will siphon between $60 million and $75 million out of the Minnesota economy over a two-week period.
Read the rest of Baxter's story here.
The short story: so far, OK.
According to Olson's report, neither county has been forced to let workers go, though Hennepin County did notify about 1,200 of its 7,500 employees that they may be laid off at some point.
In both counties, road construction continues, including the Central Corridor rail line between Minneapolis and St. Paul, as do county-administered services including child protection.
Still, city and county officials are most concerned about getting a state aid payment due this month that will allow them to continue offering many services without tapping reserves.
Many county services are mandated by state laws and regulations. Counties rely on two checks a year from the state, called county program aid, to help pay the costs, according to Mark Stenglein, vice chairman of the Hennepin County Board.
Stenglein says it appears likely -- but not certain -- at this point that Hennepin County's next program aid check will arrive next week. It should amount to between $10 million and 14 million, depending on budget negotiations.
"Probationary services to watch offenders, or mental health services the state mandates we have to do, and they pay for it, but it's in question now and our check is due from the state," Stenglein said. "Minus that, that leaves us only to backfill it from our own property taxes."
Read Olson's entire story here.
Big lineup of talkers on the #mnshutdown on MPR News today. Here's a preview of the next few hours (subject to change):
-At 7:20 on Morning Edition, we expect to hear from a top GOP leader, either Amy Koch or Kurt Zellers
-At 7:30 we'll hear from the director of the Minnesota Zoo
-MPR News political editor Mike Mulcahy at 7:40, followed by another reporter, either Catherine Richert or Brandt Williams
-At 8:00 we will be recording an interview with a state employee laid off from her job in the Revenue Department for airing later during the hour
-Also during the 8:00 hour we expect a preview of the special master hearings from reporter Laura Yuen, and we'll hear about effects of the shutdown from reporter Dan Olson
-On Midmorning starting at 9, we'll hear from reporters Tim Pugmire, Catherine Richert, Hennepin County board commissioner Mike Opat, Duluth Mayor Don Ness, St, Cloud Mayor Dave Kleis, Senate Minority Leader Tom Bakk and former state representative Marty Seifert.
-Then on Midday, starting at 11: former Finance Commissioner Pam Wheelock, reporters Mulachy, Yuen and Olson, and House Minority Leader Thissen. Midday has also invited Governor Dayton and GOP legislative leaders to appear on the show.
Transportation Commissioner Tom Sorel says the Bren Road/Highway 169 project in Minnetonka can't continue during a shutdown, despite the city's argument that it is fully managing and inspecting the project.
Minnetonka City Manager John Gunyou had asked MnDOT to allow the project to continue, saying all state money going into the project had already been paid and that the city had taken full responsibility for the project.
Gunyou said delaying the project could cost taxpayers up to $3 million.
But in a letter, Sorel cited the signed agreement between MnDOT and the city, saying the state has the authority to stop a construction project within the state's right-of-way "at any time, with or without cause."
He said MnDOT won't be able to conduct oversight or authorize changes to the project. The state also won't be able to assure the federal government that construction activities on part of the National Highway System comply with federal requirements.
"MnDOT still has substantial authority and responsibility related to the construction of this project that it will be unable to exercise in the event of a shutdown," Sorel wrote.
Gunyou said in a written statement that the city is disappointed with the decision.
"We continue to believe there are no real financial, engineering or administrative reasons why this important project should not proceed, with or without a state shutdown," Gunyou said.
"We remain hopeful that the governor and legislature will reach an agreement to avert a shutdown, and will continue to evaluate our options on a day-by-day basis, with our primary focus on how best to minimize any unnecessary additional expense to our taxpayers," he said.
Minnesota local governments are breathing a huge sigh of relief this morning after reading a judge's order that the state of Minnesota must continue to make Local Government Aid payments even if the government shuts down on Friday.
As we reported this morning, Ramsey County Judge Kathleen Gearin ordered LGA payments made even if Gov. Mark Dayton and legislative Republicans can't reach a budget deal in the next couple days.
The state is scheduled to make $265 million in aid payments to cities on July 20. That was in jeopardy before Gearin's decision.
"There is no doubt that cities dodged a major bullet this morning that may have crippled communities," Nancy Carroll, mayor of Park Rapids and president of the Coalition of Greater Minnesota Cities, said in a prepared statement.
"It is just as important that the final budget compromise does not impose yet another round of cuts to cities that will result in higher property taxes for families and businesses and make communities less competitive for retaining and growing jobs."
Said St. Paul Mayor Chris Coleman: "Judge Gearin's finding confirms what we have always known: that funding for public safety--police officers and firefighters--is essential to our city and our state.
"This resolution provides a level of certainty that police, firefighters, parks and libraries in Saint Paul will remain operating in the event of a state government shutdown."
MPR News reporter Mark Steil writes:
City Administrator Todd Prafke in St. Peter says the Judge's ruling was good news. He says the southern Minnesota community is scheduled to get an LGA payment of over one million dollars in late July. Prafke says most communities are counting on the money.
"That's a substantial part of their budget and is very important to them to get those dollars," says Prafke.
Prafke says the current LGA funding formula could still change under a final budget agreement between the legislature and the governor. The city got some other good news. Many operations at the St. Peter Regional treatment center will continue under the ruling. Nicollet county has the greatest share of state government jobs of all Minnesota counties.