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.