The Minnesota House GOP majority’s big proposed cuts in state aid to Minneapolis, St. Paul and Duluth — and no other city — smack of partisanship blatant enough to be laughable, were not their consequences so negative.
The House tax bill would make deeper cuts in state aid to those three cities than any blow dealt them during the last decade of state budget deficits. The hit in 2016 would total $85 million — $34.4 million to Minneapolis, $30.3 million to St. Paul, $19.9 million to Duluth. In Minneapolis, that’s 44 percent of today’s state aid; in St. Paul, it’s 50 percent. (The bill would shrink Minneapolis aid allotments $5.8 million more, but in exchange the city could tap sales tax proceeds that now go to the Minnesota Sports Facilities Authority.)
Those three cities and one other — Rochester — are deemed “cities of the first class” in state law. But Rochester is spared the proposed cut. The justification by the sponsor, Rochester-area Rep. Duane Quam: The other three cities’ allotments under the local government aid (LGA) program are considerably larger on a per-capita basis than Rochester’s. His proposal would cap LGA allotments for cities of the first class at 112.5 percent of the per-capita statewide average.
The flaw in that argument is that LGA’s distribution has never been based on population alone. A new formula devised in 2013 reaffirmed the 44-year-old program’s aim to equalize the taxpayer cost of municipal services throughout the state by adjusting for factors other than population that drive up those costs.
A major factor is the number of people who work in a city while living elsewhere. In Minneapolis, that’s 110,000 per day. In St. Paul, Mayor Chris Coleman notes: “When a legislator has a medical incident at the Capitol, we don’t say, ‘Sorry, we’re not going to serve you because you don’t pay property taxes here.’ ” Minneapolis, St. Paul and Duluth provide city services to all comers, and they rely on help from the state to keep those services affordable.
Many Greater Minnesota cities receive LGA amounts that are larger per capita than the sums that flow to Minneapolis, St. Paul and Duluth. But those cities’ LGA awards aren’t on the chopping block in the House bill. Why not? “The only thing I can come up with is that Republicans don’t like Democrats,” said Rep. Eric Simonson, DFL-Duluth. Every legislator from Minneapolis, St. Paul and Duluth is a DFLer.
Moves like this one will only reinforce that partisan tilt. “This is my re-election bill,” said Minneapolis DFL Rep. Jim Davnie of the GOP-designed bill, which also contains elimination of $3.7 million per year in promised state help for city debt service on the county-run Minneapolis Central Library. Higher property taxes would be the consequence for Davnie’s constituents. Simonson said that in Duluth, property taxes would need to double to offset the cut.
As St. Paul’s Coleman noted, city property taxpayers aren’t the only Minnesotans who would suffer. Big property tax increases in those cities would slow their growth, which in turn would reduce their contribution to the whole state’s economy and to its state budget. No Minnesotan wins if the state’s biggest cities suffer.
It might be that these cuts are mere trading chips for the conference committee negotiations that lie just ahead at the Capitol. If that’s so, we hope they come off the bargaining table early. They aren’t worthy of a political party that seeks to be entrusted with the governance of the whole state.