Mayors urge state aid reform

More than a dozen budget-rattled Minnesota mayors spent an hour Monday telling DFL Gov. Mark Dayton how to improve aid to cities and local governments.

One after another, mayors from across the state said years of reductions in aid created chaos in their budgets and hindered them from providing basic services.

"We need it desperately," said Joyce Nyhus, mayor of Buffalo Lake, a city of 733 in Renville County.

The mayors made their case as Dayton and his top staffers are preparing a budget proposal for the next two years. Dayton's new budget plan is likely to include a retooling of the state tax system and tax hikes to help pay for services.

As the economy slid, former Republican Gov. Tim Pawlenty and DFL lawmakers regularly trimmed aid to cities and counties to tame budget deficits. Many Republicans have been skeptical of the aid system for years, particularly as some of the biggest benefactors are communities with strong DFL ties. Lawmakers created the system decades ago to shift tax money from more affluent communities to urban and outstate areas where demand for basic service out-striped the local property tax base. Over time, critics argue, the system has gotten out of whack and encouraged runaway spending in some communities that get the money.

Worthington Mayor Alan Oberloh, who is running for state Senate, said the state needs to come up with a system that is more sustainable.

"It's the least stable thing we can count on," Oberloh said. City officials need a reliable aid system that "not every Legislature will come after with a knife."

Northfield Mayor Mary Rossing said the system is like "a bad screwdriver that no longer works."

The mayors are part of a task force established by Revenue Commissioner Myron Frans to look at ways to improve the state aid system.

After the meeting, Dayton renewed his call for a DFL-controlled Legislature to allow him to implement changes. The governor has been a strong defender of aid to local governments, but so far there hasn't been any new money in the budget to boost aid. His proposals to increase taxes on high earners have gotten an icy reception from the GOP-controlled Legislature.

"Having a DFL majority in both bodies is really important because one body can block progress from happening," Dayton said. "We will trade gridlock for progress."

Minneapolis Mayor R.T. Rybak said city leaders realize they need to figure out ways to become more efficient, offering a proposal for a metrowide fire department as an example. But he said city leaders around the state will get behind Dayton's reforms, which could make for a testy budget fight.