Legislature needs to get local government aid on track
Local government aid should not be viewed as the state doling out welfare for cities and counties in Minnesota. And we are glad to see the Coalition of Greater Minnesota Cities made increasing LGA its top issue for the 2016 legislative session.
LGA is quite the opposite of welfare. It is the state returning our locally paid state taxes to the local level. What’s more, LGA provides an economic equalizer, with funds from more prosperous regions of Minnesota assisting less prosperous regions.
If you ever have visited neighboring states without that economic tool, you see the difference. Things are starkly rural or urban. There are fewer midsize cities and the rural towns seriously struggle.
As an economic development tool, LGA is great. It is sound to invest in the weaker areas so that they can return a greater amount in taxes to the state. It’s a cycle. Imagine if we took the state revenue generated by the Twin Cities suburbs and put it all back into the needs of the suburbs. What tax revenue Minnesota receives from Greater Minnesota would shrink as a result of the burden of providing services.
In that sense, LGA is a property-tax relief tool. Without it — like in those other states — paying for all the local services, such as library, police, fire, streets, utilities and parks, would fall only on the local taxpayers, even if they must support an influx of workers.
Think about it this way. Fergus Falls has a population of 13,351, according to the 2013 census estimate. But the census says the population swells each day by about 4,000 additional people because of the workforce. We have a city that must provide more services for guests than we have dwellers to pay for it.
Minneapolis and St. Paul are in the same boat but on a much-greater scale, as they support suburban commuters.
The only tax structure that offsets that imbalance is LGA. And with the state sitting on a $1 billion surplus, it makes sense to increase LGA, considering the years of cuts it suffered mostly in the 2000s.
LGA works. Let’s get it back to where it should be. — Fergus Falls Daily Journal