Local officials anticipate aid cuts

Aid to local governments is again a target for cuts in 2011 as state lawmakers continue to grapple with a large budget deficit -- now at $6.2 billion.

While Democratic Gov. Mark Dayton has other ideas, Republicans who control the legislature are proposing to slash aid that goes to city and county governments.

Meanwhile, local government officials have expressed disappointment but little surprise.

"We considered the risks with (Local Government Aid)," said Red Wing Finance Director Marshall Hallock. "Who couldn't see the writing on the wall?"

Under a bill introduced this week, the amount of LGA Red Wing is set to receive in 2011 would be cut from $1,746,701 to $924,202.

According to preliminary figures, Goodhue County could see its county program aid cut almost in half, dropping from $1.78 million to about $900,000, said Scott Arneson, county administrator.

Arneson said the county steadily has been reducing the amount of state aid it plans in its budget.

"We're trying to reduce it so it's not as big of an impact," he said. "We pretty much anticipated it."

This year, the county only budgeted $480,000 in expected state aid. Arneson said the county hopes to wean itself off state aid completely within the next few years.

However, Arneson said the proposed budget plan also would cut another aid program, market value aid credits. The county hasn't been budgeting for cuts in that area, he said, so those reductions would have a bigger impact.

Red Wing City Council President Ralph Rauterkus said if the state were to cut aid in the middle of the year it would be difficult on cities because they would have to go back and adjust their budgets.

In anticipation of a cut, Red Wing only budgeted about a third of its scheduled LGA payment -- $644,000 -- into its general fund budget.

If the city receives its full payment, or at least more than a third of it, that money would go toward a special fund. That special fund would be used to help buy right-of-way along Highway 61, Hallock said. The city is looking to buy right of way as part of plan to improve dangerous intersections at and near Spring Creek Avenue.

Arneson said if the county receives more aid than it budgets, the funds would go toward the next year's budget.

Rep. Tim Kelly dropped by a City Council workshop Friday to give a legislative update to city officials.

While he and city officials didn't see exactly eye-to-eye on the aid issue, Kelly did say he's optimistic that at the end of the day cities will end up receiving the same amount of LGA they did last year.

Kelly also said the legislature may decide to adjust the formula under which LGA is distributed during the current session.

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