Friday, May 22, 2009

No city services sacred in unallotment scenario
As Governor Pawlenty continues to again ponder unallotment, cuts to city aid of up to $282 million in the next 18 months means cities will likely be faced with making significant service reductions that are highly visible to residents. After Governor Pawlenty chose to unallot December LGA and MVHC payments for the end of calendar year 2008, the League of Minnesota Cities undertook an informal tally of city budget-balancing actions and strategies in response to that unallotment, and in anticipation of further cuts in the next biennium.

Cities have reported since December 2008 that no service is sacred, and are looking to make additional budget cuts to public safety, park and recreation services, public works, and city library services among others. These cuts will result in significant job losses, as well. The numbers tallied by the League reveal that such reductions are already underway.

Please note that the list below was assembled through analysis of newspaper clips and collection of anecdotes provided by city members (only 201 cities are currently represented on the list)—it is not meant to be a formal survey and doesn't take into account cities throughout the state whose efforts may have not been recently featured in a news clip. Additionally, the list shown below is partical and reflects only a few of the top mentions. The actual list is much, much longer. Nevertheless, it provides insight regarding how cities are already coping, and plan to cope moving forward.

Action/strategy followed by No. of actions cities that have done, or are considering:
Reductions in service-- 94
Delay or cancel projects/major services-- 90
Cuts to public safety/reductions in hours & personnel/disband dept.-- 82
Spending reductions/reduction of contributions & transfers to other funds-- 80
Cut employees/layoffs/reduce FTEs/combine departments-- 69
Decrease salary/lower increases/furloughs-- 69
Leave positions open/don’t fill planned positions-- 48

From all of the personnel-related actions and strategies listed we can see that if LGA/MVHC is unallotted or cut at the maximum levels expected, then it’s a sure bet that Minnesota’s unemployment rate of 8.1 percent could be upticking in the very near future.