Gov. Tim Pawlenty's budget proposal takes another big swipe at local government aid (LGA), cutting it by 15 percent in the 2009 calendar year and 31 percent in 2010, compared with current law. Last month, Pawlenty sliced the December LGA payment by 22 percent to fix a short-term budget problem.

Local government leaders raised concerns Tuesday that the cuts will require increases in property taxes, loss of public-sector jobs and cuts to essential services. The League of Minnesota Cities estimates the cuts at $77.7 million in 2009 and almost $168 million in 2010. There are other cuts proposed for counties, but Pawlenty said some of those can be offset by combining efforts in areas such as social-service delivery.

Pawlenty said the cuts are structured in a way to allow local governments more time to make adjustments and explore ways to cut costs and institute reforms, such as cooperative purchasing and sharing services.

LGA is essentially property tax relief and is calculated to help cities that have low property wealth and high needs. Officials have warned that further cuts to LGA would mean taking police and firefighters off the streets, but Pawlenty has contended that any government that cuts police and fire because of the reductions has misplaced priorities.

In Wadena during a recent weekend snowfall, the city waited until Monday morning to plow streets rather than pay overtime. With its proposed LGA cut in 2009, the city is likely to close its parks department, said Mayor Wayne Wolden. In the second year, its $230,000 cut would mean plowing streets after every other major snowstorm, he said.

St. Paul has frozen all salaries and instituted a hiring freeze. It has canceled the police academy that was to start in January. "You have to have an honest conversation with the people of Minnesota about what services cost," said St. Paul Mayor Chris Coleman.