A new plan from the Minnesota House would decimate state funding for cities and counties, leaving the state's local governments to largely fend for themselves.
The plan, from the House Property Tax and Local Sales Tax Division, would cut nearly $300 million from the local government aid by slashing half of metro suburbs' state help and a quarter of big cities' aid from the state immediately. By 2013, the plan would completely eliminate all state aid to metro suburbs and by 2015, city funding would be gone.
Under the plan, county aid from the state and Market Value Credits would also be slashed or eliminated.
The proposal from House Republicans severs a long standing fiscal relationship between the state and local governments that mayors and county officials say keeps the municipalities alive. With nearly $900 million in cuts, it also helps Republicans close a $5 billion without raising statewide taxes.
The plan likely has little chance of becoming law. Democratic Gov. Mark Dayton has been an ardent backer of state aid to local governments, sparing it in his budget plan, meeting with mayors to underscore his support and saying those who cut it are responsible for property tax hikes.
The House plan, which largely spares outstate cities according to a spreadsheet, pits suburbs and the urban core against smaller cities. Last week, mayors from places big and small said they would not tolerate such a divide and conquer approach.
The proposal also cuts $118 million from a renters credit program, which gives renters with low and moderate incomes a tax refund to off set property taxes. Read more about the credit program here.
