Thursday, December 16, 2010

Governor’s rants about public employees don’t stand up to scrutiny
By Jim Miller

It’s trendy these days to blame public employees for being a primary source of our economic woes and, here in Minnesota, Governor Tim Pawlenty is driving that train for political advantage. In a recent Star Tribune commentary, the Governor rants that there are too many public employees, they make too much money, and they contribute little to our national and state economies. Additionally, he would have us believe the work done by public employees is of marginal value. The reality, as a week of blizzards and house fires and closed schools reminds us all, is that public sector jobs are necessary, and it matters when they go away.

In making his accusations, Governor Pawlenty does a disservice by singling out the public sector and its employees, union and non-union alike—including cops, firefighters, teachers, and snowplow drivers, as well as administrators—as the root of our problems. These women and men perform valuable work that is needed and demanded by constituents. They also pay taxes and buy goods and services from the private sector just like their neighbors. The money a public employee spends at a local diner, hardware store, or department store has the same economic effect as that spent by private and non-profit sector employees. Likewise, as the nonpartisan Congressional Budget Office notes, to the extent that state and local governments address budget gaps by reducing spending or raising taxes, such changes will partially counteract the federal government’s fiscal support for the economy.

The evidence Governor Pawlenty offers to support his rhetoric does not stand scrutiny. For example, he lumps state and local governments together with the federal government to deliberately create an incomplete and inaccurate picture of government jobs “added” during the recent economic downturn. The Congressional Budget Office, though, notes that in the United States there are actually 241,000 fewer local government employees in November 2010 than there were at the start of the recession in December 2007.

In our own state, a recent study commissioned by no less than the Minnesota Chamber of Commerce found that the state workforce grew by 5% from 2001 to 2009 (a period that encompasses Pawlenty’s two terms as Governor), and declined by .7% when measured against population growth. The same study also found that the Minnesota local government workforce declined by 1.3% in actual numbers and 6.7% relative to population during that same period. This demonstrates that local governments are already doing more with less (declining state aid and other diminished revenue), including making workforce reductions.

On the federal side, Governor Pawlenty makes the misleading claim that those employees “… receive an average of $123,049 annually in pay and benefits, twice the average of the private sector.” He conveniently fails to mention, though, that by the nature of the work they perform, the federal civilian workforce does not have the same proportion of lower paying jobs as say the service industry. A more meaningful comparison is to look at similar types of jobs in the private and public sectors. Doing so would paint a more truthful picture.

The same Chamber of Commerce study referenced earlier found that state employee wages are typically higher for positions requiring less education than for similar positions in the private sector. By contrast, those positions requiring higher levels of education are relatively underpaid. We know from other studies that this is particularly true for the most senior management positions. The study found the same relationship for local government positions and their private sector counterparts.

All this being said, there is certainly room for reform. The public sector lives with stringent and constraining labor relations laws that undoubtedly contribute, sometimes unnecessarily, to the cost of providing government services. Likewise, public sector pensions in their current form may not be sustainable in the long term; these are subjects that must be addresses by policymakers going forward.

Making public employees scapegoats for our nation’s—and our state’s—fiscal problems may make great fodder for self-interested politicians, but such rhetoric offers nothing in the way of a constructive solution. In 2011 and beyond, Minnesota’s new Governor and legislative leadership face daunting tasks in how to responsibly balance the state budget. How well that happens will be in large part determined by their willingness to minimize partisanship, dispense with one-upsmanship and look for real solutions without pointing fingers at an important and sizable segment of our state’s workforce. Solving a $6 billion deficit without fully understanding the underlying facts or the implications of potential actions does not serve our residents well. How we will spend increasingly precious public sector dollars may, of necessity, be very different in coming years, but those choices must be made based on what makes the most sense for the most people, and not simply on what makes good sound bites for political gain.

Jim Miller is Executive Director of the League of Minnesota Cities.

Monday, November 8, 2010

2011 Minnesota State Legislature to feature dozens with city government experience
by Brian Strub, League of Minnesota Cities

The new State Legislature that will convene in St. Paul in January 2011 will continue the Minnesota tradition of including many women and men who also have served as elected city officials. Pending official certification of the 2010 election results, there will be 37 members of the 2011 legislature who have previously served as either mayor, city councilmember, or both.

The 2011 Minnesota Senate will have 12 members (18% of the 67 members) who at one time served as elected city officials. There will be 25 members of the 2011 Minnesota House of Representatives (19% of the 134 members) who served as elected city officials at one time. During the 2010 session, 10 members of the Minnesota Senate and 26 members of the Minnesota House of Representatives previously held city elected offices.

In addition to legislative elections, there are also those who leave the legislative arena for the chance to return home and seek local election in their hometown. For example, current League Board member and Paynesville city councilmember Jeff Bertram is a former member of the Minnesota House of Representatives; former state Rep. K.J. McDonald serves as mayor of Watertown; former state Rep. Char Samuelson serves on the New Brighton City Council; and former state Sen. Dave Kleis is the mayor of St. Cloud.

City Officials turned 2011 Legislators: UPDATED (11/03/2010)

Senate District 3 – Sen. Tom Saxhaug, former Grand Rapids councilmember, incumbent
[NEW-D] SD7 - Rep. Roger Reinert, former Duluth councilmember, open seat
SD14 – Sen. Michelle Fischbach, former Paynesville councilmember, incumbent
[NEW-R] SD15 – John Pederson, St. Cloud councilmember, open seat
SD23 – Sen. Kathy Sheran, former Mankato councilmember, incumbent
SD26 – Sen. Mike Parry, former Waseca councilmember, incumbent
[NEW-R] SD28 – John Howe, Red Wing mayor, open seat
SD29 – Sen. David Senjem, former Rochester councilmember, incumbent
SD33 – Sen. Gen Olson, former Minnetrista mayor, incumbent
SD39 – Sen. James Metzen, former South St. Paul councilmember, incumbent
SD44 – Sen. Ron Latz, former St. Louis Park councilmember, incumbent
SD48 – Sen. Mike Jungbauer, former East Bethel mayor, incumbent

House District 7A – Rep. Thomas Huntley, former Duluth councilmember, incumbent
[NEW-D] HD 7B – Mr. Kerry Gauthier, Duluth councilmember, open seat
[NEW-R] HD 8B – Roger Crawford, former Mora mayor & councilmember, defeated incumbent
HD 9A – Rep. Morrie Lanning, former Moorhead mayor, incumbent
HD 9B – Rep. Paul Marquart, former Dilworth mayor, incumbent
HD 12A – Rep. John Ward, former Proctor mayor, incumbent
[NEW-R] HD 12B – Mike LeMieur, Little Falls councilmember, defeated incumbent
[NEW-R] HD 14A – Tim O’Driscoll, Sartell mayor, open seat
HD 14B – Rep. Larry Hosch, former St. Joseph mayor, incumbent
HD 15A – Rep. Steve Gottwalt, former St. Cloud councilmember, incumbent
[NEW-R] HD 19B – Joe McDonald, Delano mayor, open seat
HD 27B – Rep. Jeanne Poppe, former Austin councilmember, incumbent
HD 31B – Rep. Gregory Davids, former Preston mayor, incumbent
HD 33A – Rep. Steve Smith, former Mound mayor, incumbent
HD 35A – Rep. Michael Beard, former Shakopee councilmember, incumbent
HD 35B – Rep. Mark Buesgens, former Jordan councilmember, incumbent
HD 36A – Rep. Mary Liz Holberg, former Lakeville councilmember, incumbent
[NEW-R] HD 37B – Kurt Bills, Rosemount councilmember, defeated incumbent
HD 39B – Rep. Joe Atkins, former Inver Grove Heights mayor, incumbent
HD 40B – Rep. Ann Lenczewski, former Bloomington councilmember, incumbent
HD 46B – Rep. Debra Hilstrom, former Brooklyn Center councilmember, incumbent
[NEW-R] HD 53A – Linda Runbeck, former Circle Pines councilmember, defeated incumbent
HD 54B – Rep. Bev Scalze, former Little Canada councilmember, incumbent
HD 55A – Rep. Leon Lillie, former North St. Paul councilmember, incumbent
HD 64B – Rep. Michael Paymar, former Duluth councilmember, incumbent

The League of Minnesota Cities maintains a list of the current and past state legislators, constitutional officers, and federal officials who have served as elected city officials.

Tuesday, October 26, 2010

Gubernatorial and OSA candidates answer questions from city officials

The League of Minnesota Cities has now completed a series of webinars with the Office of the Minnesota State Auditor (OSA) candidates Pat Anderson and Rebecca Otto, and with gubernatorial candidates Mark Dayton and Tom Horner. The webinars were designed as online discussions for League members to learn more about where candidates stand on issues affecting city government, like local government aid, unfunded mandates, the state budget deficit, and the state-local fiscal partnership. Despite several requests, candidate Tom Emmer declined to participate in the webinars. In addition to posting recordings and slides from each webinar on its web site, the League has also posted summary articles that highlight comments made by each gubernatorial and OSA candidate.

Friday, September 24, 2010

City officials in western Minnesota gather to talk about budget-balancing solutions
A combined total of 100+ city officials from the Crookston and Dalton areas gathered earlier this week for the first in a series of League of Minnesota Cities Regional Meetings for 2010. City officials discussed a variety of cost-cutting measures to offset revenue shortages brought on by a slumping economy and dramatic cuts to state aids for cities. As the Grand Forks Herald noted, city leaders in western Minnesota have been very creative with budget-balancing tactics for years, and have more good ideas for upcoming budget cycles, as well. And, as Minnesota Public Radio notes, this creativity has been shown in other regions of the state, as well. The League will resume Regional Meetings next week in the cities of Mountain Iron and Walker, and host October meetings in the cities of Eyota, Montgomery, Walnut Grove, aand Grove City.

Thursday, September 9, 2010

Ideas, Opinions & Common Sense
The League of Minnesota Cities has posted a new video to engage Minnesota residents in a discussion of the League’s Cities, Services & Funding effort. The video ("Ideas, Opinions & Common Sense") is the second one released by the League in recent weeks. Nearly 15,000 State Fair attendees stopped by the League's Cities Matter booth during the 12 days of the Fair to view the video, pick-up a state map, or play the Cities Matter plinko game to learn more about city services. Those who have not yet visited the Outside the Ox web site are encouraged to watch the video there, and weigh-in with their thoughts about city services like police and fire protection, parks and recreation centers, street maintenance, and libraries, among others. The League hopes to gather ideas from residents of Minnesota cities about how those services should be funded in the future given new economic realities.

Wednesday, August 18, 2010

Cities Matter/OTO booth at the Minnesota State Fair
Since the League of Minnesota Cities launched the "Outside the Ox" campaign earlier this summer, more than 3,500 people have viewed the OTO video and several dozen have written their thoughts and ideas about the future of city services and funding. Now, the League is bringing the Cities Matter and Outside the Ox campaigns to the Minnesota State Fair beginning next week. Fairgoers are urged to top by the booth, located in the lower level of the Grandstand Building, play a game, and learn more about city services.

Friday, July 30, 2010

Should Minnesota end LGA funding for cities?
Minnesota Public Radio will host an online discussion about the future of local government aid today at noon. Panelists include Don Reeder from the League of Minnesota Cities and Chuck Marohn from Strong Towns. The discussion is the first in a series of MPR's "In Context" debates, that will examine important public policy issues and give online viewers opportunities for comments and questions. MPR's Michael Caputo posted a YouTube video yesterday explaining how to participate in Friday's discussion.

Wednesday, July 14, 2010

Update on Oakland police item
The San Francisco Chronicle reported late last night that last-minute negotiation efforts on Tuesday between Oakland city officials and police union leaders failed, and 80 officers were laid-off. According to the report:
Oakland Council President Jane Brunner said the city had little choice but to order the layoffs."We all agree we need more police, but we can't afford it," she said. The police had agreed to several council requests: paying 9 percent of their salaries into their pension plans and agreeing to a later retirement age for new hires. But in return, they wanted a three-year moratorium on officer layoffs.

Tuesday, July 13, 2010

What happens when public safety is the only service left on the chopping block?
The City of Oakland, CA is about to find out. According to a local television station there, the city's police chief there has released a list of "situations" that officers will no longer be able to immediately respond to due to department layoffs driven by budget cuts. The city and the police union have until 5 p.m. CDT today to strike a contract deal that would minimize layoffs needed, but it appears that an impasse in negotiations persists. So, barring a last minute deal, those "situations" will include:
•burglary
•theft
•embezzlement
•grand theft
•grand theft:dog
•identity theft
•false information to peace officer
•required to register as sex or arson offender
•dump waste or offensive matter
•discard appliance with lock
•loud music
•possess forged notes
•pass fictitious check
•obtain money by false voucher
•fraudulent use of access cards
•stolen license plate
•embezzlement by an employee (over $ 400)
•extortion
•attempted extortion
•false personification of other
•injure telephone/ power line
•interfere with power line
•unauthorized cable tv connection
•vandalism
•administer/expose poison to another's

As the report notes, "The problem is money. In the last five years, the police budget -- along with the fire department budget -- have amount(ed) to 75 percent of the general fund. After years of largely sparing those departments the budget ax, now it appears there are few other places to cut."

Though there is no indication that any Minnesota cities have plans for such draconian public safety cuts in the near future, cities here are perilously close to a fiscal breaking point that is already forcing tough funding decisions. To avoid an Oakland-like consequence will certainly require a fundamental rethinking of how we provide core city services in our state.

Thursday, June 24, 2010

Projection: Minnesota Cities Will Be Broke by 2015
If current revenue and spending trends continue and no policy changes are made, Minnesota cities of all sizes in all regions of the state will be broke by the year 2015. That is the startling finding of a recently completed projection prepared for the League of Minnesota Cities by the Hubert H. Humphrey Institute at the University of Minnesota, and released today at the League’s Annual Conference in St. Cloud.

According to this projection, cities overall would see a deficit of 35 percent of city revenues by the year 2025. The projection found that it makes no difference where a city is located geographically, how large or small its population, what its tax base is, what the local economy looks like, or what its unique mix of revenue sources is—all types of Minnesota cities will end up in the red if big changes aren’t made to city services, funding for those services, or both.

The projection serves as a foundational piece for a new League effort titled “Cities, Services & Funding: Broader Thinking, Better Solutions”—an initiative designed to spur a statewide dialogue about city services and how those services are paid for. As part of the dialogue, the League plans to launch a series of community conversations throughout the state over the next 18-24 months. The first of those conversations is scheduled to take place tomorrow (June 25) among League members attending the Annual Conference. Conference attendees will also hear a verbal summary of the projection presented by the Humphrey Institute’s Jay Kiedrowski.

To develop the projection, the Humphrey Institute relied primarily on data from the Minnesota Department of Revenue and the Office of the State Auditor. Researchers analyzed 11 years worth of historical city revenue and expenditure data, as well as state aid and property tax data. Based on those historical trends, they projected what overall city revenues and expenditures would look like through the year 2025 assuming no policy changes.

The League has already begun to grow public awareness of the problem through release of an animated video and to collect citizen perspectives on city services and funding through a new blog site called Outside the Ox. The thoughts and ideas gathered from contributors will form the basis for policy proposals and possible legislative action.

Wednesday, June 23, 2010

Day 1 of LMC Annual Conference--focus on budget crisis
More than 300 city officials are convening at the St. Cloud Civic Center today for the first day of the League of Minnesota Cities Annual Conference and Marketplace. This year's event offers a greater number than usual of breakout sessions devoted to handling city budget challenges in the wake of shrinking revenues and rising expenses. On Thursday, look for the League to release results from a startling projection of what city finances could look like in Minnesota over the next 5 to 15 years.

Friday, June 11, 2010

Time for thinking "outside the ox"
The League of Minnesota Cities has produced a new video that takes the complex issue of the future of city funding and presents it in an entertaining and surprising way. Additionally, those wishing to weigh-in with suggested funding solutions are invited to contribute at a dedicated web site.

Wednesday, May 26, 2010

Survey of Minnesota city officials shows growing concerns about facing financial challenges, meeting service needs
Only 17 percent of Minnesota cities reported being able to better meet service needs in 2009 than in the previous year according to survey data from the 2010 State of the Cities Report, released today by the League of Minnesota Cities. City officials from 463 cities participated in the 7th annual fiscal conditions survey.

This is the third consecutive year that the share of cities reporting improved fiscal conditions dropped. In 2008 slightly more than one-quarter of cities reported being better able to meet needs. Some of the budget factors that respondents identified as areas of concern for 2009 included increasing employee pension costs, infrastructure needs, uncertainty surrounding local government aid, and the continued economic recession. The share of cities predicting favorable financial circumstances in 2010 is only 18 percent.

Almost two-thirds of cities responding reported shortfalls in property taxes for 2009, more than double the share of cities with property tax shortfalls in 2003. Frequent reductions to market value homestead credit (MVHC) reimbursements and effects of the economic recession on property owners contribute to this trend. Additionally, more than half of cities reported an increase in delinquent property tax payments in 2009 and reports of fee revenue shortfalls grew from 17 percent in 2003 to 57 percent. Survey results also indicated that home and business owners are finding it much more difficult to pay their utility fees and other charges, as 70 percent of cities experienced an increase in unpaid utility bills for 2009.

Despite the gloomy economic environment, there is room for optimism. The majority of cities expect to recover from the economic recession in two to five years, while only four percent don’t believe they will ever recover. There is greater variability in expected recovery times among Greater Minnesota cities and small cities.

The survey was sent to the chief administrative official in each League member city. Officials had from December 16, 2009 until February 16, 2010 to respond to the survey, and the response rate was 56 percent.

Monday, May 17, 2010

Special Session needed to complete budget work
No third round of cuts for cities

This morning, the House and Senate reconvened a brief special session and approved HF 1, the omnibus budget balancing bill. The bill is now on its way to the governor for his expected approval. The special session adjourned Sine Die late this morning.

For cities, the bill includes no additional cuts in local government aid (LGA) and market value homestead credit (MVHC) distributions for 2010 or future years.

The bill does ratify the governor’s 2009 and 2010 city LGA and MVHC unallotments at the identical levels originally announced by the governor in July, 2009. The ratification of the unallotments was necessary due to the May 5 Supreme Court ruling that called into question the validity of the governor’s 2009 unallotment actions.

The only other major fiscal impact of the 2010 legislative session was the supplemental budget passed in March that included $52.5 million in city cuts. Estimates of the ratified unallotment cuts and the cuts approved in March can be found on the League of Minnesota Cities website.

Wednesday, May 5, 2010

Supreme Court Rules Against Governor in Unallotment Lawsuit
(Statement published today by the League of Minnesota Cities)
In a divided decision, the Minnesota Supreme Court ruled against the Governor today in the Brayton et al. v. Tim Pawlenty et al unallotment lawsuit. The Court found that the Governor exceeded his budget unallotment authority last summer when he made cuts to the Minnesota Supplemental Aid – Special Diet program. A majority of the Court concluded that the manner in which the Governor exercised the unallotment authority was not permitted by the statute.

While the decision only directly affects the cuts to dietary aid program, it certainly leaves in political and legal limbo the validity of the remainder of last summer’s unallotment decision – including the $192 million of local government aid and market value homestead cuts effectuated last July and this January. The League of Minnesota Cities participated in the case by filing a joint amicus curiae brief with the cities of Minneapolis and St. Paul, the Coalition of Greater Minnesota Cities, Metro Cities and the Minnesota Association of Small Cities; however, the League Board of Directors had previously declined to initiate direct legal challenging the local government aid and market valued homestead credit cuts. In light of today's Supreme Court decision, there will be further discussions with the Board about the ruling and its implications for cities.

A copy of the decision can be viewed at the attached link. http://www.mncourts.gov/opinions/sc/current/OPA100064-0505.pdf

Friday, April 23, 2010

Maps that illustrates city budget cuts, Part III -- City streets
Third and final in a League of Minnesota Cities series - This particular map provides a visual representation of the magnitude of recent budget-cutting actions specifically in the service area related to city streets (construction and maintenance). Actions taken may be in response to cuts made in state aid, as well as to other economic factors currently putting stress on city budgets. Again, as with the first two maps, note that some areas of the state may appear underrepresented because of lack of online news content available in those areas, among other factors. Frequent “streets” actions may include delay of reconstruction projects and routine maintenance (crack fillings, seal coating); and change snow removal policy (raise threshold, eliminate overtime so plowing wont’ happen on weekends/at night) among others. Taxpayers should note that, without ongoing maintenance, the average life expectancy of local streets is approximately 25-30 years. With appropriate maintenance, the significant investment in this infrastructure can be extended to 50-60 years. Maintenance costs increase as road systems age. Thus, timely maintenance is not only effective in improving roadway surfaces, but also saves money over the long run. Poor street conditions can cause wear and tear on vehicles, causing additional maintenance and repair issues for taxpayers.

Wednesday, April 14, 2010

Maps that illustrates city budget cuts, Part II -- Parks and recreation services
Second in a League of Minnesota Cities series - This particular map provides a visual representation of the magnitude of cuts specifically in the area of city parks and recreation. Again, as with the public safety cuts map, note that some areas of the state may appear underrepresented because of lack of online news content available in those areas, among other factors. Park and rec budget-cutting actions may include reducing mowing in city parks, shortened pool season or hours, cuts in summer recreation programs offered, the use of volunteers to plant and maintain flowers along main street, and more. With warm seasonal weather in Minnesota on the horizon, park and rec becomes an even more visible and valued public service. Will your city be forced to make budget cuts that could affect outdoor recreational activities this summer?

Wednesday, April 7, 2010

Map shows Minnesota cities that have cut public safety budgets
Over the past 15 months, Minnesota cities have absorbed more than $250 million in cuts to Local Government Aid and Market Value Homestead Credits – funding used to pay for a variety of city services, including police and fire protection, street maintenance, park and recreation services, and others. Additional cuts have been proposed during the 2010 Legislative Session, as well. Immediately prior to the initial cuts through unallotment in December 2008, the League of Minnesota Cities began informally compiling city budget-balancing “actions taken” and “actions considered” by tracking news clips from throughout the state, collecting anecdotes from member cities during a series of regional meetings, communicating with member cities via e-mail, and extracting data from member surveys. Though current statuses of considered actions are not known and some actions may be represented more than once, the spreadsheet includes over 4,000 budget-balancing actions made or considered (primarily due to state aid cuts) by 427 cities. This particular map provides a visual representation of the magnitude of cuts specifically in the area of public safety (police, fire departments), alone. Note that some areas of the state may appear underrepresented because of lack of online news content available in those areas, among other factors. These public safety cuts may include the elimination of positions, reduced coverage, fewer training dollars, delays in the replacement of vehicles and equipment, or dissolution of the department altogether. We’ll take a look at additional city service cuts in the coming days.

Thursday, April 1, 2010

Ice Arena Air Quality Bill Skates On
by Brian Strub, League of Minnesota Cities
In a case that proves that good intentions can have unanticipated consequences, legislation to improve air quality inside Minnesota’s indoor ice arenas could end up costing skaters, hockey players, and entities that operate arenas thousands of dollars in unproven equipment and training. The bill would mandate installation of an electronic air monitoring device in every indoor ice arena in the state and it is moving quickly through committees in the House and Senate.

Under the bill, HF 3512 (Rep. Rick Hansen, DFL-South St. Paul)/SF 3175 (Sen. Ellen Anderson, DFL-St. Paul), the monitoring device must be equipped with an alarm that sounds when the carbon monoxide level in the facility is elevated. The monitor must then activate an exhaust system. Ice arena personnel would be required to have training in operating and maintaining the device. The effective date of the bill in its current form is Jan. 1, 2011.

In meetings with stakeholders, the League has acknowledged safety considerations are the top priority for arena staff and managers, but also raised concerns about the potential cost of implementing this legislation at a time when budget challenges are prevalent. The League would prefer an alternative that improves compliance with air quality safety precautions and monitoring.

Some additional points for consideration:
• The health and safety of ice arena users, visitors, and staff is a priority of the highest order.
• The Minnesota Dept. of Health currently is responsible for indoor ice area air quality (http://www.health.state.mn.us/divs/eh/indoorair/arenas/index.html).
• The proposed action levels for operation of the exhaust systems do not seem to be rooted in any scientific research on the subject of indoor air quality.
• The time line for implementation of the proposed monitoring system does not allow for proper budgeting and installation of the unit. The effective date of the bill is Jan. 1, 2011.
• The cost of implementing this legislation would be highly problematic at a time when budget challenges are prevalent and deep cuts from the state are anticipated on a number of fronts.
• Minnesota Ice Arena Managers Association has been working with the Minnesota Department of Health to improve the current standards, education, and testing. These subject experts should be allowed to devise a plan that will protect their customers and stand the test of time.
• The League would prefer an alternative to this legislation that improves compliance with air quality safety precautions and monitoring.
• A Senate Committee amended the Senate version of the bill to exempt arenas that use only electric resurfacers and edgers. This equipment does not produce carbon monoxide.
• This is well intended legislation, and also another unfunded mandate.

A hearing has been scheduled for April 7, 2010 before the Cultural and Outdoor Resources Finance Division of the Minnesota House of Representatives.

Tuesday, March 23, 2010

Can you guess what they'll be talking about....?
City officials from throughout Minnesota will be joined by counterparts from counties, school boards, and townships on Thursday (March 25) in St. Paul for a joint legislative conference. It's a good bet that local government fiscal conditions will take center stage in discussions. Highlights include a legislative panel featuring remarks from Senate and House majority and minority party leaders, and a keynote address by David Parkhurst, Director and Legislative Counsel for the Economic Development and Commerce Committee of the National Governors Association. League of Minnesota Cities staffers will live-tweet from the Conference.

Friday, March 12, 2010

Cities making tough budget choices while legislators propose more mandates
Last year, in the wake of financial woes caused to cities by unallotment of state aids, officials from the state legislative and executive branches asked city associations to submit a list of mandates that could be eliminated to help alleviate city budget struggles and promote collaborations with other local governments. The League of Minnesota Cities responded by submitting a 20-page list, and Minnesota cities were rewarded with...elimination of a single, minor mandate.

Fast forward to 2010--with cities again facing brutal cuts in the Governor's proposed budget, legislators have introduced at least three additional bills that would further strain city budgets through the imposition of unfunded mandates. Separate proposals that would expand employee sick leave, require cities to purchase clean products from a state-approved list, and require ice arena managers to install state-approved air monitoring devices certainly are all well-intentioned pieces of legislation. At a time when the state has responded to a budget crisis by slashing city aids and credits and threatening to cut more, though, the introduction of even more unfunded mandates adds even more pressure to city budgets. If state policymakers indeed plan to offer mandate relief to help offset cuts to state aid and credits, then expanding the mandate list is counter-productive, at best.

Wednesday, March 3, 2010

So, what has City Hall done for me lately?
The Waseca County News has published a piece submitted by Waseca City Council member Les Tlougan that lists city service statistics in that city for 2009. Waseca's current population is approximately 9,800. All-in-all, the piece lists stats for the year related to public works, public safety, and general administration and finance. Some examples: 7,205 police calls; 363 building permits issued; 51,500 utility bills generated and mailed; and 500 fire hydrants flushed. Tlougan provides useful food-for-thought for residents of any city who want to know how city tax dollars are typically spent. He also emphatically notes that Waseca will have fewer dollars to deliver these services going forward--according to Tlougan, if Governor Pawlenty's most recent budget proposal is approved the City stands to lose 44.5 percent of its local government aid for 2010 and 2011.

Friday, February 19, 2010

Governor proposes taking funds from dedicated firefighter training account
by Anne Finn, League of Minnesota Cities
A portion of funds dedicated to firefighter training will be diverted to the state’s general fund if Governor Tim Pawlenty has his way. The governor has identified the Fire Safety Account as a source of funds to help balance the state’s ailing budget. Since 2007, under a statute signed into law by Governor Pawlenty, homeowners and commercial property owners have paid a “fire safety surcharge” of 0.65 percent on insurance premiums. The surcharge, which is listed as a line-item on policyholders’ statements, is deposited into the Fire Safety Account. The account is used for firefighter training and state chemical and decontamination response teams, as well as the State Fire Marshall's office.

The average homeowner pays $5.20 into the fund annually. The Governor is proposing to divert $6.9 million from the fund in 2010 and another $3 million in 2011 to the state’s general fund. The proposal would leave about $1 million per year in the account. Since 2007, the Fire Safety Account has provided $2 million to partially reimburse over 400 fire departments for training expenses. According to a representative of the Minnesota State Fire Chiefs Association, the requests for reimbursement from the account total approximately $5 million. Even though the account has the funds to accommodate all requests, the dollars have not be allocated because the Legislature and Governor must first approve the expenditure. The $3 million in requests that have not been reimbursed must then be borne by local property taxpayers.

On Thursday, ironically the same day that two firefighters were injured while responding to a large fire in South Minneapolis, the Minnesota State Fire Department Association and other groups voiced their concerns about their frustration with Governor Tim Pawlenty's proposal Groups representing nearly all of Minnesota's 20,000 firefighters attended the news conference. The League of Minnesota Cities recognizes this proposal as another potential loss of revenue for local units of government and will oppose this diversion of funds.

Monday, February 15, 2010

Statement from League of Minnesota Cities re: Governor Pawlenty's proposed cuts in aids and credits to cities (announced this a.m.)

From Executive Director Jim Miller:

“At a time when Minnesota cities are struggling to make ends meet the Governor’s proposed slashing of state aids and credits is devastating news, especially on the heels of $258 million already cut since December of 2008. As Minnesotans well know, those cuts have already resulted in dramatic escalation of property taxes and reductions in vital city services for hundreds-of-thousands of city residents. The Governor’s proposal will lead to more of the same, on an unprecedented scale.

Minnesota cities have already shouldered a disproportionate burden of the state’s budget cuts over the past couple of years. We understand that solving the state budget crisis involves sacrifice and tough decisions. We gain nothing, though, when those decisions involve simply passing the buck to local governments and jeopardizing health, safety, and quality of life in our state’s communities. As the session continues, we hope that the Governor and the State Legislature involve stakeholders in discussions of solutions that put ALL revenue and expenditure options on the table instead of once again looking to residents of Minnesota cities for a financial bail-out.”

Wednesday, February 10, 2010

Nearly 50 cities promoting health and fitness
The Alexandria Echo Press is reporting that the City of Alexandria has joined the growing list of Governor's Fit City Program participants. The program, administered through the State Department of Health is designed "to recognize Minnesota cities that are committed to creating and maintaining a city environment supportive of active living. A Minnesota city making this commitment is providing opportunities for physical activity to people who live, work and play within the city." The City will participate in the program at no cost. For more information about Fit City, send an e-mail message to health.activeliving@state.mn.us or call 651-201-5494.

Wednesday, February 3, 2010

Governor again downplays link between aid cuts and property tax increases
Last Friday, Governor Tim Pawlenty used his weekly WCCO-AM radio show to once again criticize Minnesota city officials for pointing to cuts in local government aids and credits as a reason for recent increases in city property taxes. The Governor specifically targeted the City of Bemidji referring to it as “a government town, in a lot of ways.”

City officials and others claiming a correlation between aid cuts and property tax increases are doing much more than simply spouting rhetoric—they have facts and statistics on their side. As noted here earlier, the Minnesota Office of the State Auditor (OSA) recently released a report on city finances that confirms state cuts to city aids in recent years have created a greater reliance on city property taxes as a source of revenue to pay for vital city services. According to Auditor Rebecca Otto, that trend will continue “If the Legislature and Governor further cut local government aids.”

The OSA report was consistent with one released late last year by MN2020, a public policy think tank, that showed the same trend dating back to 2002. And, a State Department of Revenue chart adds validity to the correlation by showing that since local government aid was introduced as part of the “Minnesota Revenue” in 1971, property taxes as a share of major taxes collected in the state actually declined from 42.3 percent to just under 30 percent before an initial round of LGA cuts in 2002.

Indeed, there are a number of factors that can ultimately contribute to property tax increases. City officials are justified, though, in their claims that the state continues to use cuts in aids and credits to cities to balance its budget on the backs of local property tax payers.

Thursday, January 28, 2010

Who wants to be a mayor? MMA guide can get you started
The Minnesota Mayors Association, in conjunction with the League of Minnesota Cities (LMC), has published an 80-page handbook that is intended as "a summary resource for practical and legal issues concerning Minnesota city mayors." The handbook is useful for newly-elected mayors, or for those aspiring to serve in that office in the near future. A survey of Minnesotans conducted by LMC a little more than two years ago showed--at the time--that while an overwhelming majority approved of their local mayor's job performance, less than 10 percent of respondents would actually consider running for mayor in their city of residence.

Thursday, January 21, 2010

League of Minnesota Cities to file brief in Brayton appeal
(A statement released earlier today by the League of Minnesota Cities)

After an extensive discussion, the League of Minnesota Cities Board of Directors today voted unanimously to authorize League staff to seek permission to file an amicus curiae (friend of the court) brief in the appeal of the unallotment lawsuit that the State Supreme Court recently agreed to consider. The Board members concluded that the Brayton Case involves important constitutional issues regarding separation of powers that could affect the state’s budget process and could have repercussions for cities.

The League Board also discussed a possible direct legal challenge to the 2009 and 2010 unallotments but ultimately decided to file the amicus brief to assist the Court based on legal principles and the separation of powers.

Today’s consideration by the Board was prompted by a recent Ramsey County District Court decision (Brayton, et al v. Tim Pawlenty, et al) that, while the Governor’s unallotment authority is constitutional, the manner in which the Governor exercised his unallotment power this past summer with respect to the State’s dietary aid program was invalid and unconstitutional. The State Supreme Court will hear the case on March 15.

The League regularly files briefs in appellate court matters affecting the interests of LMC members. Amicus briefs are drafted to provide the court with information that is intended to help the Court reach a decision.

Friday, January 15, 2010

More proof that aid cuts to cities = higher local property tax burdens
Yesterday, the Minnesota Office of the State Auditor (OSA) released a report confirming that state cuts to city aids in recent years have created a greater reliance on city property taxes as a source of revenue to pay for vital city services. According to Auditor Rebecca Otto, that trend will continue “If the Legislature and Governor further cut local government aids.”

The data in the OSA report is for 2008, and highlights budget trends for the past 10 years. The city budget-year 2009 data will likely show an even greater city reliance on property taxes because of the Governor’s massive local government aid and credit unallotment administered at the conclusion of the 2009 State Legislative Session.

So if cities just accept their fate and tighten their belts, wouldn’t it be unnecessary for them to respond to aid cuts with tax increases? The report goes on to note that Minnesota cities are indeed cutting back, and have been doing so for at least a decade. Inflation-adjusted total city revenues AND expenditures decreased seven percent between 1999 and 2008, deflating claims made by local government critics that city spending has been out-of-control and is solely to blame for property tax increases.

The OSA report lends further proof to the fact that policy decisions made at the state level have dramatic impacts at the local level, and that the Legislature and the Governor need to consider renewal of an effective state-local fiscal partnership as a top priority.

Additonally, a fact not mentioned in the report is one that city residents know all-too-well: the reduction in state aids and credits has translated not only into higher property tax burdens, but also in service reductions for hundreds of communities. The League of Minnesota cities recently complied a report that details city budget-cutting measures along with service reductions.

Thursday, January 7, 2010

Should local governments be eliminating jobs?
A recent Bloomberg News syndicated column that was published in the Star Tribune takes state and local governments to task for failure to follow the lead of private sector companies in terminating employees as a response to the slumping economy. There are several things wrong with this critique, though, not the least of which is the fact that it ignores supply and demand realities.

In the current economic recession, consumers are carefully managing their checkbooks. Many of them have lost jobs, or absorbed pay freezes or pay cuts, and have fewer dollars to devote to discretionary spending. For private sector businesses, a reduction in demand of goods and services is likely to affect the supply end and result in reduced profits as well as cuts in expenditures. Along with that come job cuts that, according to the Bloomberg analysis, are occurring at a percentage rate significantly higher than that of the local government sector.

What the analysis fails to mention, though, is that decreased demand for private sector goods and services does not necessarily mean the same for government services. If anything, demand for local government services—especially social services, public health services, and public safety, among others—often increases during times of great economic stress.

When demand increases, delivery of government services--like the delivery of private sector services—sometimes requires stabilization or even increases in levels of staffing. That being said, due to dramatic cuts in state aids and credits, Minnesota cities have already been doing more-with-less for years.

There are many good management strategies that public and private sectors can learn from each other. Assuming a one-size-fits-all approach, though, is ill-advised and can lead to faulty policy decisions. (Thank you to my friends at StrongTowns for flagging the Bloomberg piece on their Facebook page.)

Monday, January 4, 2010

Mayor Kautz to assume USCM presidency
Burnsville Mayor Elizabeth B. Kautz will be inaugurated tomorrow as the 68th President of The United States Conference of Mayors (USCM) during a special inaugural ceremony at the Performing Arts Center in Burnsville.

Mayor Kautz, outgoing USCM Vice President, will serve the balance of former President Greg Nickel’s presidential term through June 2010 before serving a full term of her own as President of the organization until June 2011. She is assuming office now because Nickels was defeated for his re-election bid as Mayor of Seattle last fall.

Mayor Kautz was first elected as Mayor of Burnsville in 1994 and has been re-elected five times since. Her USCM presidential initiative will involve advancing economic development strategies for cities and regions throughout the nation, based on a successful local model utilizing cross-sector partnerships.