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City already braced for proposed aid cuts

By Tom Larson

Sun Tribune

The City of Morris will see its Local Government Aid and Market Value Homestead Credit reduced under a Senate bill introduced in the Minnesota Legislature on Tuesday, but City Manager Blaine Hill said the city's 2011 budget was produced based on the assumption the money wouldn't be there.

"We were smart enough to know we'd probably never see it," Hill said.

The bill continues many of the unallotments and other budget cuts made in 2010. The bill would reduce the state's projected $6.2 billion budget deficit by about $1 billion.

Morris would see its LGA reduced by about $255,000 and also would not see about $105,000 in MVHC. The city expected those reductions would be coming when the Legislature convened and its 2011 budget didn't include about $360,000 that was certified, Hill said.

"We're prepared for that," he said. "But that's just the first shot. We don't know if (the Legislature) will go deeper. If they decide they need to come back and cut more, we'll be in serious trouble."

Hill said it's likely the Legislature will propose delaying repayment of about $1.3 billion payment shift to schools into the next biennium. But even with that move, the state still will need to address a remaining deficit of about $3.9 billion.

While the city has prepared for continuing aid reductions, the trend is becoming difficult. Since 2008, the city's aid payments have been reduced by about $500,000. About two-thirds of the city's $3 million General Fund is aid payments.

"It's the first shot," Hill said, "but we're not sure if it's the last shot."