Minneapolis and St. Paul will get their first state aid increases in five years under the tax bill that passed the Legislature this week.
Both cities will receive about a 20 percent boost in their local government aid (LGA) payments next year, which could have a significant impact on their budgets. LGA accounted for about 13 percent of Minneapolis' general fund revenue in 2013.
The total LGA payment to Minneapolis will be $76 million, while aid to St. Paul will be $60.4 million. Aid to both cities has been cut dramatically in recent years as legislators grappled with perennial deficits -- Minneapolis LGA was once $111 million.
LGA is distributed to cities across the state based on a formula determined by the Legislature. Lawmakers this year lowered the number of variables from 17 to seven, giving Twin Cities suburbs a larger slice of the total pie.
Minneapolis leaders have blamed LGA cuts for rising property taxes. But whether the increases translate into property tax relief depends on the mayor and City Council not spending the money elsewhere.
A number of suburbs that do not currently get state aid will begin receiving it under the bill, including Maplewood, Oakdale, Roseville, Bloomington, and St. Louis Park. See the full breakdown by city here.
