ST. PAUL -- The Pawlenty administration unveiled its proposal to divide state aid among Minnesota cities Wednesday, and rural lawmakers immediately declared it will not pass.
A Revenue Department report shows that, overall, the formula helps cities outside the Twin Cities, while slightly hurting the metropolitan area. Cities smaller than 2,500 would benefit the most.
Revenue Commissioner Dan Salomone told reporters and a Senate committee that he followed Pawlenty's orders in drawing up the plan.
"It is a good, clean, nonpolitical formula," Salomone said.
Gov. Tim Pawlenty, following an earlier announcement that he wanted to cut local government aid, set the spending at $352 million, a 40 percent cut from what cities had expected. Wednesday's announcement was how that money would be split up.
ADVERTISEMENT
"The goal of our new city aid formula is to help cities provide average-level services at a reasonable tax rate," Salomone said.
Legislators launched the local government aid formula in 1971 to help cities that could not provide adequate services with property taxes. However, some cities continued to receive state aid even if they didn't need it, or need as much, Pawlenty said.
Salomone said the proposed formula is based on cities' abilities to pay, using factors such as the age of housing, how fast the population is declining and household size.
The impact on cities across the state varies widely.
Moorhead would be affected by both Pawlenty's suggested lower funding level and his proposed formula.
If no changes were made in either the total statewide spending or the formula, Moorhead would receive $8.7 million, according to Revenue Department figures. If the formula does not change, but legislators adopt Pawlenty's lower overall spending, the city would get $5 million in 2005. If lawmakers agreed both to the governor's formula and lower spending, $4.3 million would be sent to the city.
"It's another devastating blow to Greater Minnesota," Moorhead City Manager Bruce Messelt said.
The proposed formula took lawmakers and city officials by surprise. They knew a plan was coming, but most had no inkling what it would contain or that it was being announced Wednesday.
ADVERTISEMENT
Rep. Morrie Lanning, who has been working on local government aid with Pawlenty's office and other rural lawmakers, didn't see the figures until Wednesday afternoon.
He didn't like the fact that only one form of city aid was included in the formula.
Rural lawmakers generally agree with Lanning, a Moorhead Republican, that other kinds of city aid must be included in deciding how much cities receive.
The problem is not so much the formula, said Sen. Keith Langseth, DFL-Glyndon. It is that Pawlenty wants to cut a third of local government aid while barely touching that of most suburbs.
"This in no way corrects the problem," Langseth said. "It's dead on arrival."
Forum reporter Joy Anderson contributed to this story.
Readers can reach Forum reporter Don Davis at (651) 290-0707
