Northfield City Council to DFLers on Fact-Finding Tour: Give Us More Tools

Is cutting state aid to cities necessary to balance the budget? Or does it cripple local services and spike property tax rates?

State House Democrats say the latter.

Their nine-city fact-gathering tour to support that argument came through Northfield on Saturday, where minority leaders asked questions of residents and city councilors at the .

"It's been devastating," said Mayor Mary Rossing when asked how the city was affected by $1 million of local government aid cuts in 2010.

The city plans to eliminate its dependence on LGA within three years. 

"We know it's going away at some point," she said. "But in the meantime, we really depend on it."

Rossing said to fill the gap left by state aid, which made up 25.7 percent of its revenues in 2009, the city has cut, furloughed and negotiated early retirement for staff and has cut services including library hours and the former Welcome Center.

"And we're really just getting started," she added.

The city needs other tools to meet budget needs, she said, joined by councilors Patrick Ganey and Betsey Buckheit.

They told minority leader Paul Thissen (D-District 63A), deputy minority leader Debra Hilstrom (D-District 46B) and assistant minority leader Rick Hansen (D-District 39A) the state could help Northfield by exempting the city from paying state sales tax—which costs it about $200,000 yearly—and giving it the power to levy its own sales tax.

State Sen. Al DeKruif (R-District 25) of Madison Lake last month introduced a bill that would from paying a state sales tax. Last week, Rossing testified in support of the bill (SF0371). If approved, the law would take effect June 30.

Buckheit said the state’s pinch on the city at both sides “seems like bad faith." She added that more leadership was needed from the state on reducing congestion and expanding alternative transit instead of expanding roadways.

Rossing also said she was strongly against proposed legislation that would cap property tax rates, calling the potential impact “devastating.” She said the city would have to scrap a planned replacement of its if it couldn't raise more revenue.

Scrap at the state

Gov. Mark Dayton and the Republican-controlled Legislature have repeatedly clashed on the policy and philosophy of LGA.

Last month Dayton vetoed a GOP budget bill that would cut LGA, which is funded by a progressive state income tax.

Republicans have continued to push for cuts, saying that the program is outdated and benefits Minneapolis and St. Paul at the expense of out-state communities, downplaying potential property tax hikes that cities might raise to make up for lost funds.  

The DFL legislators in Northfield on Saturday sought to highlight the potential gap. Hilstrom said property taxes have to rise 50 to 67 cents for every dollar cut from LGA.

Hansen took a similar tack.

“Those cuts in LGA are really cuts in property tax relief,” he said.

Business owners paid 46 percent more property taxes last year than they did in 2002, according to nonpartisan research handed out at the discussion. Homeowners were hit even harder, paying $1.7 billion more than they did eight years earlier—an 85-percent increase.

Ganey closed the meeting by urging the legislators to develop a more aggressive approach to selling their policies.

“[We have a] culture that doesn’t want to pay for things,” he said. “Unless you can clearly articulate [that], then it’s just going to continue to be a fistfight.”