House GOP targets metro cities for heavy LGA cuts

Republicans in the Minnesota House are proposing to dramatically cut state aid to metro cities and counties. The proposal, released by House Property Tax Committee Chair Linda Runbeck, cuts $300 million in Local Government Aid. It proposes to phase out LGA to metro suburban cities that receive Local Government Aid by the end of the biennium. It also proposes eliminating LGA for Minneapolis, St. Paul and Duluth by the end of 2015.

Rural cities will mostly be spared from the LGA cuts. That’s a key signal that House GOP leadership is working to insulate rural members from heavy criticism over LGA cuts. City officials across Minnesota are taking a Three Musketeers strategy when it comes to LGA (“All for one, one for all”). Rural mayors say they won’t support LGA cuts to metro cities.

State aid to counties, in the form of County Program aid and the Market Value Credit, would also be eliminated in some cases.

The proposal also cuts a tax credit for renters and eliminates the political contribution refund.

The total cuts in state aids and credits are nearly $800 million over the next two years. The plan is the first specific glimpse that shows how Republicans in the House intend to erase the state’s projected $5 billion budget through spending cuts.

House Republicans intend to release the omnibus tax bill later today. It will include $300 million in tax cuts for low and middle income earners.

City and county officials and Governor Dayton are sure to criticize the measure. They have long argued that cuts in state aid will dramatically increase property taxes. Dayton is proposing to raise income taxes on Minnesota’s top earners to balance the state’s budget.

You can read the full House Property Tax spreadsheet here.

  • John O.

    Hi Tom, the link does not get you to the spreadsheet, but I suspect it is at their end.

    On a general note, do they really think that releasing something like this on a Saturday is going to get overlooked? It leaves the impression that they are trying to sneak it through when nobody is looking.

  • tom scheck

    Let me check the link. I think it has less to do with sneaking through and more to do with the aggressive set of deadlines put forward by the House and Senate GOP. Democrats, however, are alleging that Republicans aren’t going to allow for enough public input into this plan.

  • Tom M

    After Dayton’s top wage earners..the only other place to look for real money …is the suburbs?

  • Wayne Cox/MN Citizens for Tax Justice

    It’s official. MN Republicans are in Overreach.

    Sensing the revolt against them in a rural Minnesota up in arms after years of Pawlenty and his wingmen planting their property tax-raising guns at the rural crime scene, Republican mayors had said enough. If rural MN turns against the Republicans, kiss the gavel goodbye.

    So they craft a budget that nominally holds rural cities harmless, but throws counties under the bus. O course they don’t have the money to hold anything harmless, so they throw the suburbs and the big cities under the bus. To keep schools whole, no problem: They will just eliminate 55% of state government.

    But here’s today’s real news of the document dump: Minnesota can’t pay its bills. The Republican legislature is too lazy to get out of the house and get some income. So what do we do? Road trip? No. More income tax cuts for the rich!

    The proposal is to lower the first two rates of the income tax. But folks at median incomes and below have hardly any income that reaches up into the second rate, so they only pick up pennies from reducing the second rate.

    So who gets the tax cut money from a second-tier rate reduction on the income tax? Predominantly those with very, very high incomes. One would have to run the exact numbers, but here’s an approximation of roughly how it works: A family earning $40,000 a year would get a Zellers rate reduction on about $10,000 of income, while high earners would get a total rate reduction on around $125,000 of income. Now if you are in the top one percent in income in MN, you just got a sweet $50,000 a year federal tax cut, thanks to the federal Hold the Middle Class Tax Cut Hostage Act of December 2010. But Zellers figures you’re still hurting, so he’s topping it off. And you don’t even need to buy a Powerball ticket. Money from the Minnesota Lottery helps conservation. Call this the anti-lottery because the GOP plan to take $38 million out of the Sustainable Forest Fund to keep these new tax cuts to the top flowing. Modest-income renters get to kick in to the help-the-rich fund too with a $121 million net tax hike.

  • Kevin Shannon

    Nothing less than what playground children’s bullying groups would do….steal things from people they don’t like (political opponents) and give it to who they do….regardless of any other measure of justice or fairness