Blaine Hill: Local Government Aid is the lifeblood of Morris city funding
Every citizen in Morris should be concerned about LGA. It will be our number one priority in the upcoming legislative session and possibly the fall election. Without an increase, the city of Morris will be faced with some important decisions about taxes and/or service cuts in the next few years. You need to contact our legislators.
LGA is an acronym for Local Government Aid. Its history goes back to 1971 and newly elected Governor Wendell Anderson's vision to implement a new system of funding to help schools and cities with low tax bases and high tax bills. In some respects, it was an attempt to level the playing field between the haves and the have nots. There were cities and schools in Minnesota that could do whatever they wanted and others that could barely provide basic services. An aid system was created to provide needs-based revenue to cities and schools. The new city aid was called Local Government Aid or LGA. The new aid program was dubbed the "Minnesota Miracle."
In 2001, the aid system was updated and the result was a major increase in the LGA the city of Morris received. The city took the additional LGA and reduced the tax levy. The city's 2001 tax levy was $1,241,827 and the next year it dropped to $843,159. This is what was supposed to happen with LGA and Morris has been a very good steward of it. Fifteen years later, our tax levy is $1,374,733, or just slightly over the 2001 tax levy.
I say LGA is the lifeblood of the city of Morris, but how important is it to us? In 2016, we will receive $2,283,161. The money is used in our General Fund and Library Fund. These two funds are considered general expenses of the city. The General Fund pays for administration, finance, elections, police, fire, public works, engineering, economic development, parks, airport, and transit, as well as, capital equipment. The Library Fund pays for the operation and maintenance of the public library. We have other funds for other purposes too, but they are funded by fees and sales. The Public Utility Fund is paid for by utility fees and the Liquor Store Fund is paid for by liquor sales.
In 2016, our General Fund and Library Fund expenditures will be $4,182,665. This means 55 percent of our budgeted expenses are paid for by LGA. In comparison, local property taxes provide 17 percent of the budgets or $697,642. In order to shift from LGA to taxes, we would need to increase our taxes 328 percent. Obviously, we can't do this, so we would need to make severe cuts in services.
Out of fairness to the legislature, they are not proposing to cut LGA, at this time, for us. They have in the past, but for right now they are proposing a freeze. This does us no good. Last year we got a very small increase of $3,688 and the year before $15,703. We cannot keep pace with increasing costs at this rate.
This legislative session we are asking the legislature increase the LGA funding by $45 million. We would get a proportional share of this new funding. It is critical citizens contact their state representatives to let them know we need this increase. It is our number one priority. Number two is the funding for the new $14 million water treatment plant I mentioned in my last blog. I'm very worried and you should be too.
The fastest way in Morris to help taxpayers is to fight for proper funding for LGA and the much needed bonding money for the unfunded mandate for the water treatment plant. If not, then any possible tax relief in other areas will be offset by tax or fee increases for the basic services and the new plant. Or even worse, cuts in those basic services Governor Anderson had in mind with the "Minnesota Miracle" in 1971.
Blaine Hill is the city manager of Morris. Hill blogs at morris.areavoices.com/.