Regional centers and first ring suburbs across Minnesota could see an increase in state aid if legislation simplifying and increasing distribution of Local Government Aid passes this session.Senator Roger Reinert, DFL-Duluth, is chief author of the LGA formula and appropriation modifications bill heard in the Tax Reform committee today. The bill creates a new, three-tiered system for distributing LGA, and increases the statewide appropriation by $80 million for 2014.
“One of the main reasons I ran for the Legislature was to stabilize the state/local partnership,” said Reinert. “During the five years I served on the Duluth City Council, I saw first-hand the disconnect between our city’s need and the aid the state provided. This instability created serious problems for our budget, and left us with very few tools with which to balance our city budget.”
Minnesota’s LGA formula was last changed in 2002, and since then many have criticized it for being complicated, unpredictable, and an inaccurate measure of need. The approach heard today is need-driven. Those cities with the largest unmet needs under the current aid formula receive precedence. Appropriating an additional $80 million to LGA statewide in 2014, and allowing that appropriation to increase based on inflation and population growth, will also ensure cities with unmet need receive aid.
The new formula is based on age of infrastructure, city size, and emphasizes regional centers, core cities, and first ring suburbs. A three-tiered system of city size rather than the current two allows the state to respond better to the diversity of all cities.
“I think it’s a strong proposal,” said Reinert. “The formula is easy to understand, and Minnesotans are more likely to support a system where they see and understand how the revenue is being used.”