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.