The Free Press, Mankato, MN

State, national news

December 20, 2013

More aid not cure-all for cities

Levies raised to ease cuts in some cities

The city of Grand Rapids is raising property taxes next year, despite receiving a bump in state aid of more than $300,000.

It's the kind of perceived double dip that has vexed Minnesota lawmakers and Gov. Mark Dayton, who expected state largesse would be reflected in lower city tax levies across the board.

But in the case of Grand Rapids, as with many other outstate cities, budget setters want to make up some ground lost during years of cutting and austerity. The Iron Range city is investing in streets, storm sewers and biking and hiking trails and wants to hire an additional police officer to reduce call response times. The police department went from 21 officers to 17 during the lean years, said City Administrator Tom Pagel. Now the city of nearly 11,000 residents is back up to 19, thanks to federal grant dollars.

"Can we get to 20 next year is the question," he said, noting that the way things are, officer sometimes have to respond to potentially dangerous calls alone. "Officers are saying they don't feel safe."

And yet there is that $307,000 increase in Local Government Aid, which theoretically at least should have more than covered the city's preliminary levy increase of just more than 2 percent.

"It's a struggle for legislators," Pagel said. "They go, 'We increased local government aid and we should see property tax relief.' And they did in a lot of cases."

But in most situations, they didn't.

More than 500 cities in Minnesota set preliminary levies that are above what they were last year. Just over 200 cities said they would hold taxes steady and only 93 planned to lower their levies.

Every city has a different story. In the case of Grand Rapids, an unexpected expense got in the way. The city is being required to pay more into an Iron Range fiscal disparities program, which creates a shared tax base within a multi-county taconite relief area. Grand Rapids' added pay-in is almost equal to the bump it's receiving in state aid, Pagel said.

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