Caledonia Argus

Local government officials share concerns with legislators

Posted: 1/22/02

by Jane Palen
Managing editor

About 150 people attended a meeting last Wednesday night to hear state legislators and local government officials discuss the stateís shortfall of nearly $2 billion and how that might affect townships, cities, and county government.

County commissioner Kevin Kelleher began the meeting by talking about the losses that can be expected in the coming year. Townships, which effectively had all local government aid cut, will lose $604,000, and cities in the county will experience a net loss of $105,000.

State Senator Bob Kierlin (R-Winona) told the group that the current recession was predicted by people in the ìnuts and boltsî business long before it became apparent in any other industry. On the other hand, said Kierlin, he feels that economists are ìoverly pessimisticî about the current state of affairs. He said that the legislature should not take precipitous action before knowing the true extent of the situation. Personally, he said, he feels the forecasts are off by about $200 million.

The formula for Local Government Aid (LGA) will be one that is looked at in the upcoming session, said Kierlin.

ìIn the governorís proposal, those that were hit by the loss of LGA will be hit again,î he said, adding that a suitable formula for LGA has not yet been found.

Currently, local governments receive their state aid payments only twice a year-in July and December. Kierlin proposed that instead, 25 percent of the money be distributed in March, 25 percent in July and 50 percent in December.

Kierlin also suggested that the gasoline tax be looked at as a source to provide additional revenue.

ìIt hasnít been raised in a number of years,î noted Kierlin.

Another possibility, he said, is to impose a sales tax on new clothing. He said that sales tax doesnít seem to deter people in this area from shopping in Wisconsin.

ìWe are all looking for ideas,î said Kierlin.

The idea of making cuts in the county extension services throughout the state is not playing well in rural Minnesota, said Kierlin, The extension service is funded through the same bill as the University of Minnesota.

ìWe will do everything we can to retain those funds,î Kierlin pledged.

State representative Michelle Rifenberg said that Minnesotaís deficit is not unique. There are 45 states in similar situations, she noted, adding that the state needs to tighten its belt to weather the current economy.

ìItís hard to cut,î said Rifenberg. ìWe need to go through the budgets and get rid of things we should not be doing.î

She mentioned the $650 million currently in the ìrainy dayî fund, and also reminded those present that the state is still sitting on money from its tobacco settlement. She said she didnít know offhand how much money was in the fund.

In response to criticism that the state sent out rebates for two years and now is in a deficit situation, Rifenberg commented that ìYou canít let $1 billion sit in St. Paul.î The money,she said, would have been spent elsewhere.

The governorís proposed budget is heavily favored towards the metroís transit needs, said Rifenberg, with about $100 million earmarked for light rail, $50 million for metro buses but only $30-32 million for local roads and bridges.

Rifenberg said she advocates a simplification of the stateís tax system.

ìWe have the most complicated system in the country,î she said.

Representing local governments at the meeting were Glenn Meiners of the Houston County Township Association; Kevin Kelleher, Houston County commissioner; Allen Henke, county engineer; Geoff Dawes, representing the city of La Crescent; and Tom Dybing, county assessor.

Engineer Henke said that the state is about $250 million short in funds for the state aid highway system, which means that Houston County will be about $1.6 million short. To deal with the shortfall, he said, paved roads will stay paved and gravel roads will stay gravel, but there will be no expansion of the system.

Meiners brought up the stateís lack of assistance for E-911, which was mandated by the state but for which the state offered no financial help. The state township association has passed a resolution asking for the stateís assistance.

Meiners also noted that only 23 percent of the stateís residents live in townships, but they pay for 43 percent of the roads in the state.

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