01-08-2025 Workshop Packet - Laserfiche WebLink

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MR-5 LOCAL GOVERNMENT AID (LGA) State laws require cities to prepare and submit or publish numerous budget and financial reports. These requirements often create significant costs to cities, and some requirements result in duplication. Additional reporting requirements should have a clearly defined statement of public purpose and need that is not covered under existing requirements and should balance needs for additional information with the costs of compiling and submitting the information. New requirements enacted in 2022 are expansive and have resulted in significant administrative costs for cities. Considering the number of existing reporting requirements, Metro Cities supports reducing the number of mandated reports. Metro Cities supports efforts to consolidate municipal government financial reporting requirements in the Office of the State Auditor, including an electronic submission alternative to any remaining paper filing requirements, and to authorize the use of web publication where newspaper publication is currently required. The state’s prosperity and vitality depend significantly upon the economic strength of the metropolitan region, and cities within the region play critical roles in fostering the economic development, job creation and business expansion that underpin the state’s economic health. Metro Cities supports the city Local Government Aid (LGA) program as a means of ensuring cities remain affordable places to live and work while meeting the public service needs of residents and businesses. Metro Cities supports updates to the LGA formula factors and an increase in the program appropriation consistent with recommendations by a work group of city associations. Recommended updates will ensure the LGA program adequately addresses city needs. To ensure appropriation levels are adequate to meet program objectives, Metro Cities supports increasing the LGA appropriation to address cities’ unmet need as defined by the LGA formula as well as increases in the LGA appropriation to account for inflation. Metro Cities supported the appropriation increase and updates to the LGA program passed by the 2023 Legislature. Many metropolitan cities do not receive LGA. Future reviews of the LGA program should be conducted every five years or earlier and should consider the needs and capacities of cities not receiving aid under the existing LGA program and formula. Metro Cities supports formula-based allocations for increases to the LGA appropriation, and opposes freezes of the LGA appropriation, reductions of LGA for balancing state budget deficits, and diversions of the LGA appropriation to other purposes or entities. Metro Cities opposes artificial limits or reductions that single out specific cities, and further opposes using LGA as financial leverage to influence activities and policy decisions at the local level. MR-4 BUDGET AND FINANCIAL REPORTING REQUIREMENTS 4