Bill would retool local aid formula

Legislation introduced today in the Minnesota House would change the way state funding is doled out to cities.

The proposed simplification of the Local Government Aid (LGA) distribution formula is supported by leaders in the Twin Cities metropolitan area and in rural Minnesota. Rep. Ben Lien, DFL-Moorhead, is the bill’s chief author. Lien said cities of all sizes are backing the proposal because it would make LGA more predictable from year to year by factoring in inflation.

“It’s not just a one-size-fits-all formula for LGA,” Lien said. “It takes into account different need factors based on different size cities. So it’s going to be much more customizable, I guess, to different size cities.”

Lien said his bill is scheduled for a hearing Wednesday in the House Property Tax Division.

The Coalition of Greater Minnesota Cities said the bill ensures that more money goes to the communities with the greatest needs for property tax relief.

Rep. Greg Davids, R-Preston, said he signed on as a co-author to the bill because he believes it will begin a much needed debate.

“The way the bill is written right now, is that the way it stays? I really don’t know,” Davids said. “But I do think we need this debate, and having metro Democrats, rural Republicans, I think, is very significant. Because everyone that looks at the LGA formula, as I did as tax chair the last two years, knows that we need to try and update it, modernize it and make it more efficient for today’s use.”

Gov. Mark Dayton is proposing to increase LGA funding by $80 million.