State of MN Financing Local Government in the 1980's

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Special Report of VRT & CO. Page 19 taken) are important indicators of what local government can expect in the future. Actions taken by the State can be easily measured by comparing the State's proposed budget (for the 1981 -83 biennium) with the actual results for the same period. Financial Resources Applied To /For: State Government Local Government Local Taxpayers Reserve Balance (Deficit) Totals 1981 -83 Biennium (in $1,000's) 1/81 Proposed Budget Actual $3,978,725 4,445,923 316,094 (12,483) $8,728,259 $3,994,858 3,776,641 223,615 306,123 $8,301,237 Variance $ 16,133 (669,282) (92,479) 318,606 $(427,022) As illustrated, local government, local taxpayers, plus tax increases (both State and local) "did their part" to help solve the State budget "balancing" situation. What the State did not do was to cut financial resources applied to /for the benefit of State Government. The reduced State financial resources applied to /for the benefit of local government were substantially offset by increased local property taxes. This trend will probably continue unless local government jurisdictions are effective in their lobbying efforts. The above schedule (plus the actions of the State in adopting its budget for the 1983 -85 biennium) clearly illsutrates that the State has reversed its previous commit- ment to local government and local taxpayers. State aid will not be available to local government at the levels existing during the 1970's. Another element influenced this situation during 1983. Individual units of local government (Cities) began competing for larger shares of the limited State aids - pri- marily local government aid. This aspect adds a whole new dimension to the situation. Heretofore, such lobbying efforts (for such aids) were limited to a few Cities on a special - purpose basis (i.e., Minneapolis Pensions and Local Police and Fire Pensions). During 1983, such lobbying and competition occurred for general - purpose local government aid effecting many Cities.