State cuts $320,000 in city aid

Other county cities impacted

By Lauren Radomski | The Daily Journal

Published 12:00 p.m., December 22, 2008

The city of Fergus Falls will lose over $320,000 in local government aid (LGA) when the Department of Revenue doles out payments to Minnesota cities this week.

The cut was announced late last week as Gov. Tim Pawlenty unalloted $110 million in anticipated aid to cities and counties.

“It’s not a surprise,” said City Administrator Mark Sievert, “because we knew we were going to get cut and we knew it was probably going to be a significant amount.”

Residents will not see any cuts to city services as a direct result of the unallotment, Sievert said, because there is no time to cut anything between now and the end of the budget year Dec. 31. Instead, the city will absorb the unallotment using some of the $2.7 million in general fund dollars set aside for cash flow purposes. The general fund contains an excess of $4 million.

But not all cities have that kind of money to fall back on. Mayor Wayne Runningen said he’s not sure how Pelican Rapids will deal with its roughly $57,000 cut.

“The money’s been spent already so it makes it difficult for any city to recoup that money,” he said.

Pelican Rapids may use a combination of reserves and cuts to next year’s budget to make up for the loss, Runningen said.

Cities with populations under 1,000 did not receive cuts to LGA payments, which will be dispersed Friday. These cities include Ashby, Battle Lake, Clitherall, Dalton, Dent, Elizabeth, Erhard, Foxhome, Ottertail, Rothsay, Underwood, Vergas and Vining.

In Fergus Falls, city staff are already anticipating future LGA losses as a result of the state’s $4.85 billion deficit over the next two years. Future cuts could be so severe as to affect all departments, Sievert said last week. The city council will meet in a special session at 5:30 p.m. tonight to begin discussions of where future cuts may fall.

Local lawmakers stressed the seriousness of the burgeoning deficit.

“Tuesday was the first night since I was elected that I did not sleep,” Sen. Dan Skogen (DFL-Hewitt) said Friday.

He predicted the next 18-plus months will be “painful” and said lawmakers will need to separate the state’s wants from its needs.

“Needs” have typically included education and health and human services, but even those areas did not escape the governor’s cuts last week. The University of Minnesota and the Minnesota State Colleges and Universities system will each lose $20 million. Human services is out $73 million for programs including chemical dependency, mental health and adoption assistance.

“I think we have to take — and will take — a really broad approach to this,” said Rep. Bud Nornes (R-Dist. 10A). “Everyone is going to start from the beginning and build a budget based on need.”

Both Skogen and Nornes said they were optimistic lawmakers would find a solution before the end of the session, which begins Jan. 6.

Otter Tail County communities are being hit by Gov. Tim Pawlenty’s cuts in state aid. Here are some figures:

Fergus Falls $320,315

Elbow Lake $45,447

Parkers Prairie $27,086

Pelican Rapids $57,259

Perham $64,287

---

WOULD YOU LIKE TO SHARE THIS STORY?

---

The Associated Press contributed to this report.