Mpls could still get LGA funds if shutdown occurs

Without a state budget deal, cities face a halt in local government aid.

John Hageman

The Minneapolis City Council on Monday unanimously OKâÄôd legal action to obtain local government aid funds in the event of a state shutdown.

The city received word last week that the $44 million in LGA funds the state has appropriated for Minneapolis would not be dispersed if a budget deal is not reached by Friday.

Cities use a combination of property taxes and local government aid to pay for basic services like police and firefighters. Many cities are unable to pay for their services using property taxes alone. LGA, which cities receive twice a year from Minnesota, is used to help keep those taxes down. It makes up roughly a quarter of the cityâÄôs general fund.

Minneapolis Mayor R.T. Rybak  said in an interview that heâÄôd prefer a shutdown be avoided, but would rather endure a few days of a shutdown than deal with the âÄúdraconianâÄù cuts to LGA proposed by the Legislature.

Legislators passed a tax plan in May that would cut LGA payments across Minnesota by 26 percent.

âÄúWe can weather a shutdown with some difficulty,âÄù Rybak said. âÄúWe canâÄôt weather the budget that was passed by the Legislature.âÄù

The city will likely use reserve funds to keep things running normally if the payments donâÄôt come, Rybak said.

The city is scheduled to receive half of its $87.5 million in local government aid payments from the state July 26. The rest is meant to come in December.

The League of Minnesota Cities, an organization of more than 800 Minnesota cities including Minneapolis, is prepared to pursue legal action to obtain the funds, according to its website.

The group petitioned Ramsey County District Court  last week to consider LGA a âÄúcore functionâÄù of the state that should continue during a shutdown. The courtâÄôs decision is expected this week.

Neither Minnesota Attorney General Lori Swanson nor Gov. Mark Dayton included LGA payments in their lists of services that should continue in the event of a shutdown.

Gary Carlson, a lobbyist for the League, said because LGA funds are written into state statute, the League may argue the state is legally bound to pay them on time.

Minneapolis has already written the LGA money into this yearâÄôs budget, as the funds were certified last July by the state.