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City prepared for losses in state aid [UPDATED]

Published 9:44am Thursday, July 21, 2011 Updated 11:45am Thursday, July 21, 2011

As part of the state budget deal, many Minnesota cities are getting a cut in their state funding, but it’s nothing unexpected for Fergus Falls city staff.

Fergus Falls was set to get about $4.05 million in local government aid (LGA) this year. However, the budget deal requires that, for the next two years, cities receive the lesser amount of their 2010 or 2011 LGA totals. Since Fergus Falls received $3.56 million in 2010, that’s how much they will receive this year and in 2012.

“That’s what we planned for in the 2011 budget,” said Finance Director Bill Sonmor.

Since LGA cuts have been part of budget-balancing for several years in Minnesota, the city kept its eye on the Capitol and decided to only budget for 2010 LGA numbers. Now that the LGA amount is set, the city will not have to change its budget.

“It’s kind of come out kind of the way we planned for,” Sonmor said.

The city also has a relatively solid number to plan for next year, but, Sonmor added, “The Legislature or the governor could always decrease it via unallotments as they have in the past.”

The city also had its market value homestead credit, another state aid source, reduced from a promised $371,127 to last year’s total of $89,517. This was also expected, and last year’s numbers were used in budget planning.

Overall, the city lost (and planned for) over $770,000 in promised state aid.

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