By Tim Krohn

Free Press Staff Writer

Following Gov. Tim Pawlenty’s veto of a tax bill that contained increased aid to cities, area officials are taking out the pencils and erasers to rejigger numbers as they start on their budgets for next year.

“The (proposed) increase in LGA would have helped quite a bit. It will certainly impact our budget discussions,” said North Mankato City Administrator Wendell Sande.

LGA is Local Government Aid, state funds distributed to communities to help them pay for basic city services so they don’t have to rely as heavily on local property taxes.

LGA was cut deeply beginning in 2003, during the state budget crisis, and cities have been calling for restoration of the funds, saying they have been forced to both reduce services and increase property taxes.

The League of Minnesota Cities said the state would need to restore $140 million in LGA to get even. The tax bill passed by the Legislature included $65 million more for LGA. With the governor’s veto of the bill this week, LGA will be based on the current formula.

Lake Crystal was slated to get an increase of $112,000 in LGA under the bill.

“We’re disappointed it

didn’t get passed. I hope there’s some reconsideration,” said City Administrator Bob Hauge.

The governor, who is the only one who can call a special session, said he does not see a reason to call legislators back to St. Paul, but he did not entirely close the door on a special session.

Hague said that without the aid increase and with normal cost increases in the budget, it will be difficult to protect local property owners.

“If we need to increase the budget, we’ll have to take a look at increasing the property-tax levy.”

New Ulm took one of the biggest hits when the bill was vetoed. The city was slated to get an LGA increase of $572,000, second in the area only to Mankato, which was set to get an increase of $880,000.

“Since 2003, we’ve dropped about $1 million (in LGA),” said City Manager Brian Gramentz.