Minnesota’s budget: Local governments deal with the fallout

We’re hearing a lot today from Statehouse leaders scrambling to figure out what’s next following Wednesday’s Minnesota Supreme Court decision that’s thrown the state budget into chaos.

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But local leaders are the ones, ultimately, who’ll have to make it work. Whatever solution is hatched in St. Paul, county and city leaders will still have to find a way to pay the bills. In Aitkin County this Saturday, there’s a “Radiothon” to raise money to keep library branches fully open.

We reached out to local officials in MPR’s Public Insight Network Wednesday after the state Supreme Court rejected Gov. Pawlenty’s use of “unallotment” power to make deep budget cuts.

While it’s good to debate the merits of taxes vs. debt vs. smaller government, local officials are faced with a practical problem of watching the Statehouse and waiting for the fallout and we wanted to hear from them.

“As a 15-year public employee these are probably the most difficult times I’ve seen,” said Stony Hiljus, Coon Rapids city attorney.

“There is a significant level of anxiousness, frustration, and fear in public employment right now and I know of colleagues who are considering transitioning to a private law practice as a result. These fears are shared amongst all sectors of public employees.”

Hiljus made it clear he was speaking only for himself. But it’s a sentiment we’ve heard from other public sector folks the past few months.

Below are responses we got from our Public Insight sources. Take a look and post your thoughts below or contact us directly.

Rick Morris, Waseca County Commissioner

As a county commissioner our county program aid has been cut from over $1 million to just over $300,000 by unallotment. This has caused us to give less to the library and they in turn have reduced their budget by reducing hours and cutting their book and materials budget by 50%.

We have not filled positions left open by retirement in our highway department, Auditor-treasurer’s office, Land fill and recorders’ office. These reductions have caused reduced services in each of these departments.

While the Supreme court ruling is important it doesn’t affect the problem of lost revenue to the State. I am only one commissioner but I suspect we will continue to cut our budget reflecting what we believe will be an end to county program aid in the future. All indications are that the state will have less in the next biennium.

On the other hand we will be looking at other ways to raise revenue short of raising taxes. The cost of Government continues to rise so we need to balance our own budget with user fees, cuts, etc.

Stony Hiljus, Coon Rapids city attorney

Like many local governments we have taken many different actions in response to unallotments and cuts to LGA and MVHC. We eliminated positions, laid people off, held positions open, delayed projects, looked for alternative revenue sources to fill gaps where we felt we couldn’t make employee cuts etc.

I know that here in Coon Rapids we have tried to make our local budget as much “State-Proof” as we can … I can say that despite rhetoric from the State there have been cuts to police and fire and a change in how we provide emergency services. These services cannot withstand further cuts without seriously restructuring emergency response.

I think it is unlikely that you’ll see many cities file a lawsuit against the state over unallotment. There seems to be some thought that doing so will only make things tougher for local governments in the future. I also think the polarization at the state and national level between the dems and reps is starting to filter down to local government politics and we will be in for a difficult election cycle.

Jim Hurm, city administrator, Austin

The City of Austin has lost $2.1 million in LGA (local government aid) over the last 16 months. Our annual budget is about $14 million. Cities were not part of the “unallotment” lawsuit and have taken a significantly harder hit than other areas of the state budget.

Austin’s City employment is down to 138, a drop in jobs of about 2 a year over the last 25 years. We are lean and do well in financial management.

More cuts in LGA … and levy limits will mean even more local government jobs in poor outstate communities. Goodbye “Minnesota Miracle.”

Pat Sharbonda, Supervisor, Crow Wing County Social Services

It’s too early to tell exactly how the ruling will impact the budget for the remainder of 2010 and as we move into 2011.

The greatest fear is that if all the funding that was unallotted is restored that will increase the shortfall which will require deeper cuts then already planned. So it’s kind of a mixed bag… I am glad that they ruled the way they did.

Gord Prickett, Aitken County planning commission

In Aitkin County the very effective “Sentence to Serve” program was threatened when state funding that supported it was cut.

This program puts county prisoners out into the community doing essential work, under close supervision. The County Commissioners will keep the program alive by shifting extremely limited monies around.

We are having to hold a “Radiothon” to raise the $7000 this year to keep the Aitkin and McGregor Libraries open 6 days a week.

County funds were short, with LGA cuts, so Commissioners have made reductions to the East Central Library system. In hard times our public libraries are more important than ever, for job searching and internet use. And family and children’s reading. Plus public meetings and programs

BONUS INFO: Listen today’s Midmorning discussion on the budget featuring Rep. Paul Kohls: R-Victoria, who serves on the House taxes committee, House majority leader Rep. Tony Sertich: DFL-Chisholm and Minneapolis Mayor R. T. Rybak.

Click on the play button to listen:

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