Though some no longer count on state aid, others worry about local tax impacts in the years to come
Cities south of the Minnesota River are shaking their heads, counties are nervous and school districts are fuming as they work their way through the effect of last week's shutdown-ending special session of the Legislature.
Some entities lost funding that on paper had been due them. But cities and counties increasingly in recent years have been striving to wean themselves off of state aid, tired of the now-you-see-it, now-you-don't nature of the payments.
"Three years ago, we stopped budgeting for it," said Jordan City Administrator Ed Shukle. "We don't even account for it now," turning state aid into a windfall if it does arrive as promised, but no tragedy if doesn't.
Schools, to which lawmakers turned for a big part of the solution to their problem, are less relaxed.
"We're going to be down $8 million, and that's a big hit," said Burnsville district spokeswoman Ruth Dunn. "What do you do? You borrow and look for more savings. We already had $4 million reduced from the budget for this coming year and now we have to look for more."
For counties, the full effect has not yet emerged, said Scott County Administrator Gary Shelton.
Without a whole lot of time yet to work out the details, one thing his county has not calculated is "the potential impact of the state shifting significant costs for the sex offender program to counties," Shelton said of an issue his Dakota County peers also were tracking closely during the session. "Previously, they shifted 10 percent to the counties and now it appears that has increased to 25 percent -- and this could be a significant impact down the line."
With a 10 percent contribution, Dakota County paid about $500,000 annually toward that program.
Scott County did get an earmark of $1 million to keep improving its public safety training center, as part of a bonding bill pressed for by DFL Gov. Mark Dayton. But Shakopee Republican Rep. Mike Beard said he wasn't pursuing that, and in today's fiscal climate, he won't brag about it.
"They just threw it in," he said. "That's nice, but I'm not going to put it in my campaign literature. If I went to my voters and said, 'Look how much bacon I brought home,' they don't see that as a badge of honor. We're pretty self-sufficient in Scott County. We just want people to stay out of our way."
Some south suburbs get little if any state aid payments. In West St. Paul, a city that does rely on aid, the City Council built its roughly $12 million 2011 budget anticipating getting only $1.2 million of the $2.2 million in local government aid promised by the state. Turns out, it will get $1.6 million.
"The funding source is so unstable," finance director Josh Feldman said. The city has only received its full amount in five of the past nine years. "If we do receive more than we expect, we will use those funds for capital improvement-type expenditures."
Since the city will be getting slightly more than expected, council members may consider proceeding with road maintenance and building projects that had been deferred, he said.
Hastings will receive none of the $498,041 in state aid that was supposed to be allocated this year. Finance director Char Stark said the city didn't include most of that in its budget anyway, but did expect to receive $144,060 it won't get now.
The city will have to make some trims in its $25.5 million budget, she said. It could use some savings from having more staff take unpaid furloughs than was expected. She said the council doesn't expect any state funds next year, either, and is talking about increasing its tax levy to cover the lost aid.
In an informational meeting via the Internet on Friday afternoon with officials from around the state -- with reporters invited to listen in -- League of Minnesota Cities Intergovernmental Relations Director Gary Carlson urged them to continue to exercise caution in budgeting and planning.
"On paper, we have a balanced budget," he said. "I think that's a victory in some respects. Clearly, we had to solve the deficit, we had to get government up and running. But keep in mind that we relied heavily on one-time solutions to solve this deficit."
Shifting payments to schools and borrowing against future tobacco settlements, he said, likely won't be enough to ward off a state deficit the next time budget negotiations come around.
"The future of the state budget does not look particularly rosy," Carlson said.
Staff writer Jim Adams contributed to this report. David Peterson • 952-882-9023 Katie Humphrey • 952-882-9056