Local leaders warn legislators: major cuts may be needed if more state aid cut

Talk about it

City officials from Cottage Grove, Newport and St. Paul Park painted a bleak budget picture Saturday in a meeting with local legislators, saying the governor’s proposed budget could mean cuts in staffing and services in 2010 and beyond.

Facing what State Rep. Karla Bigham (DFL-Cottage Grove) called a “historically deep budget situation,” representatives from Washington County, School District 833, Cottage Grove, Newport and St. Paul Park met with Bigham and Sen. Katie Sieben (DFL-Cottage Grove) at Cottage Grove City Hall to air local concerns about the state’s efforts to balance a massive $5 billion-plus budget deficit.

The verdict? One way or another, this will hurt.

“Things are going to be very difficult and very ugly,” Sieben told the ten local officials gathered at the legislative listening session. “And I think the governor’s budget is a start, but it’s going to get worse.”

Caught up in a disintegrating national economy, local city, county and school district budgets are already stretched thin — particularly, in the case of south Washington County’s three largest cities, by a stale housing market that has seen property tax revenue stagnate with operating costs continuing to rise.

Now, Minnesota Gov. Tim Pawlenty’s proposed budget strikes a further blow against local budgets, reducing crucial state aid to Cottage Grove, Newport and St. Paul Park by hundreds of thousands of dollars in 2009 and 2010 and slashing aid to Washington County by nearly $6 million over the next two years.

“We don’t have any budge factor in our budget,” Washington County Commissioner Myra Peterson said. “We haven’t had any budge factor in our budget for years.”

She said unfunded mandates from the Legislature have cut “proactive programs that really have a benefit” for reactive programs that don’t pack the same punch. Under the currently proposed budget, Peterson said, that trend would continue.

Cottage Grove already receives zero in Local Government Aid payments and is slated to lose almost $600,000 in property tax credits from the state in Pawlenty’s budget. Mayor Myron Bailey and other city officials were on hand Saturday to lobby local legislators to not propose any further cuts in state aid to Cottage Grove, a city that receives roughly $1.8 million less in government aid per year from the state than nearby South St. Paul.

The disparity in aid received by Cottage Grove and some other Minnesota cities — outstate ones in particular — “irks us,” Bailey said. City administrator Ryan Schroeder called it “an outrage.”

But for the local cities that still receive the intergovernmental aid payments, a reduction in state money may mean the difference between a fully-staffed city hall and painful layoffs.

Painful staff and service cuts may lie ahead

St. Paul Park mayor John Hunziker and Newport mayor Tim Geraghty on Saturday said the numbers in the governor’s proposed budget could mean staff reductions and cuts in city services. Both mayors pointed out budget cuts already made — and Bailey highlighted the nearly $14 million reduction in planned capital improvement projects for 2009 — and said more cuts would mean noticeable reductions in service to residents.

“If we had these (proposed numbers) we would see some reductions in staff and services,” Geraghty told the legislators.

Under the current proposed budget from Pawlenty, Newport would lose $129,000 in state aid in ’09 and nearly $270,000 in ’10. St. Paul Park would see its assistance fall almost $87,000 this year and another $183,000 next year.

“I’m not too concerned about 2009,” Hunziker said. “But 2010, it really scares me.”

A new budget forecast was released Tuesday, after the Bulletin went to press. But the expected shortfall was already in the neighborhood of $5 billion, and only expected to worsen.

The process of filling the colossal gap has been made more difficult by the uncertainty of the actual deficit — a number Pawlenty has said he estimates will be closer to $6 billion or $7 billion — and the continually worsening economy.

“The one thing we know is we won’t be able to close this gap by cuts alone, we won’t be able to close the gap by increasing revenue alone,” Bigham said. “We will have to fundamentally change how we provide services to Minnesotans.”

That may mean neighboring cities share more services, a subject discussed Saturday. Cottage Grove may soon share a building inspector on a contract basis with smaller St. Paul Park, Hunziker and Schroeder said. And Newport’s Geraghty said he wants to sit down with Cottage Grove officials to hash out a similar agreement that could cut some costs.

“I think we should explore (and) talk about it,” Geraghty said.

Geraghty on Saturday also told Sieben and Bigham that the deep cuts staring state and city officials in the face seem to run counter to the intentions of the huge economic stimulus bill passed last month by Congress.

“It’s all about job creation, not job elimination,” Geraghty said. “This will hit cities hard.”

Tags: budget cuts, st paul park, cottage grove, legislature, newport