Mankato Budget Information

As announced, Governor Pawlenty proposed additional cuts to local government aid (LGA). In Mankato’s case, this amounts to another $1.7 million dollar reduction in LGA. This is in addition to the $3 million dollars worth of cuts that have been absorbed over the last two years. The new cut comes at an inopportune time as the 2010 budget has been established for the year. It is likely that the $4.7 million dollar total loss in aid would be required to be carried forward into 2011.

The proposed budget cuts, by the Governor, disproportionately affect greater Minnesota cities, and inter-cities of Minneapolis and St. Paul more so than the tax base rich suburbs. The proposed cuts threaten vitality and livability of greater Minnesota cities, and of course the core cities of Minneapolis and St. Paul. The LGA Program was established to assure property tax equity and public service equity between cities with lower tax wealth compared to wealthier communities that have significantly higher wealth in terms of tax base. The formula favors communities with older housing stock and infrastructure, lower household incomes, higher property tax rates, and of course lower overall tax base. It helps in delivering fair and uniform basic services, such as, police, fire, snow plowing, street maintenance, parks and libraries.

A list of the attachments are as follows:

• Attachment 1: identifies the budget adjustments that would be necessary should the Governor unallot an additional $1.7 million dollars sometime in FY 2010.
• Attachment 2: identifies three scenarios should the total reductions carry forward into FY 2010 (Scenario 1 – taxing back most of the LGA cuts allowing for the 2009 cuts in service to be reinstated; Scenario 2 – a tax levy increase of $1.6 million dollars, along with a series of cuts; and Scenario 3 – cutting $2.27 million dollars of expenditures, and additional service reductions.)
• Attachment 3: represents a comparison of Mankato’s spending and revenues with that of Edina and Cottage Grove (cities that receive much less state aid, but benefit from significant tax breaks, mass transit aid, and school aid changes; thus, reducing their overall tax burden on citizens). Also, Edina like many twin cities tax wealthy suburbs have lower per capita taxes because they have higher per capita tax capacity.
• Attachment 4: shows a comparison of the tax base, aid, levy, and market value data in comparison to the average metro city with a population over 25,000.

2010 Budget Overview (Power Point 1.3MB)
2010 Budget (PDF 5.4MB)

The FY 2010 budget reflects the diligent efforts of staff at all levels of the organization. Economic pressures, including a $1.3 million reduction in Local Governmental Aid (LGA) and slowing tax base growth (5%), forced our organization to redefine service levels to reduce expenditures by approximately $3 million. Through budget work groups, we have identified, defined, and redefined core, secondary, and livability services. The budget outlines service levels which are aimed to balance the needs of a thriving regional center and address our unprecedented budget challenges. The budget also includes adjustments and organizational realignment to promote efficiency and quality customer service. It is designed to be a continuation of quality public services while providing a continued stable and secure financial position for our community.

Mankato preliminary budget 2011