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Area cities take LGA hits, brace for the the worst

Cities across Minnesota are still feeling the sting of a pre-holiday announcement from Governor Tim Pawlenty that, on average, their final December aid payments of the year will be cut by 22 percent.

As reported earlier this week, Detroit Lakes is among those affected, with a $142,000 cut that will have to be taken from its general fund reserves.

Other area cities that will take a substantial hit include Park Rapids, which will lose $86,000; Perham, $64,000; Pelican Rapids, $57,000; Hawley, $33,000; and Frazee, which stands to lose a little under $26,000.

Smaller cities including Audubon, Lake Park and Ogema are not expected to lose aid in this round of cuts; however, with a $4.6 billion state budget hole to fill, more cuts may be coming.

With just two weeks left in their budget year at the time the announcement was made, city officials were not only disappointed that the final aid payment from the state was reduced with little time to recover, but frustrated by the narrow approach the governor and DFL House leadership took in addressing a statewide problem.

To close the budget deficit for the current biennium, the governor and DFL House leadership pushed to protect a handful of programs, including K-12 education, which comprises 40 percent of the state's budget. The DFL Senate leadership favored a smaller across-the-board cut for all programs.

"Having the rug pulled out from under cities at the last minute is upsetting, especially when we are willing to partner with the state to find a fair, long-term solution," said Wadena Mayor Wayne Wolden, president of the Coalition of Greater Minnesota Cities.

"But by exempting other programs from the cuts, the real losers in this bargain are the middle class taxpayers."

If the fallout of the 2003 LGA cuts is any indicator, cities argue, those affected most by Pawlenty's announcement will be middle class property taxpayers in cities with lower property wealth or higher need.

Officials also worry that, because their economic health was stronger in 2003, the burden shifted to property taxpayers in the upcoming years will be more painful and the recovery process will be more drawn out.

"Cities believe the Senate DFL had the right approach," said Wolden. "At this late in the game -- when prioritizing one program over others is not the most responsible thing to do -- it would have been better for everyone to sacrifice a little, than to pass the problem onto middle class property taxpayers."

As the governor and legislative leadership have indicated that solving the next biennium's budget deficit will require prioritizing programs, cities are urging the state to make this process more transparent and open to public input.

Cities are also encouraging the state to take a fairer approach to their negotiations, and to explore both budget cuts and revenue increases for those most able to absorb the costs.