Dec 4, 2008 6:49 pm US/Central
Minnesota Cities Prepare For Looming Cuts
(WCCO)
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Karen Bleier/Getty Images
Like most cities, the streets of Chaska, Minn. can always use a little less patching and paving. However, with Thursday's gloomy revenue forecast, our roads just got a little rougher and street maintenance will likely take a hit.
"We're basically going forward with the notion that we're not going to spend more than $170,000 to $180,000 until we have a sense of are those dollars going to come in," said Chaska's City Manager Matt Podhradsky.
In just his first week as the city's top administrator, Podhradsky will have to run a city on less Local Government Aid (LGA), which is money the state returns to cities and counties to "equalize" their property tax revenues.
With the state now facing billions of dollars in projected shortfalls cuts to the LGA program are a sure bet. The city of Chaska, as well as other Minnesota municipalities, will be forced to look at everything from library hours to streets, utilities and snow plowing. The last resort would be cuts in public safety, for things like fire and police protection.
"This isn't the first time the cities have gone through this type of change in LGA," Pohdradsky recalled.
Chaska's Local Government Aid in 2003, the last time the state faced such a dire revenue outlook, was about $1 million. That was eventually cut to just $50,000 last year.
But in the 2009 budget period that will end next June, Chaska should receive more than $360,000; about 7 percent of its budget.
However, it's not just the anticipated loss of LGA that hits cities hard. There's also the loss of revenue from things like housing and construction permits. Chaska has seen that number drop from over 400 to just 40 this year. With growth stalled, that represents the loss of another half million dollars in the city's budget.
"Everything you deliver in a city is important, but unfortunately in tough times you have to make some tough choices," said Minneapolis Mayor R.T. Rybak.
He said while cuts will no doubt come, Minneapolis is better positioned than it was in 2003 when it had to make up $35 million in lost state aid.
Already, the mayor has announced a citywide hiring freeze. Still, everything from parks to public safety will be carefully scrutinized.
"Unfortunately, when you do cuts, the services that are delivered are going to drop. And we'll be really clear with people about that. It's not about scaring people, but really about being direct and open," Rybak said.
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